Redefine Properties, the South African Real Estate Investment Trust (REIT), invested in a diverse property asset platform, has announced significant changes affecting several struggling retailers, including Pick n Pay, Game, Ster Kinekor, and Edgars.
Redefine Properties owns prominent malls such as Centurion Mall, Blue Route Mall, Benmore Centre, Centurion Lifestyle Centre, Cradlestone Mall, and East Rand Mall.
Other properties in its portfolio include Kyalami Corner, Goldfields Mall, Golden Walk, Kenilworth Centre, and Horizon Shopping Centre.
During its recent Capital Markets Day presentation, Redefine Properties said it plans to reduce the space rented to these four major retailers:
Pick n Pay: Space will be reduced by 10,000 square meters. Pick n Pay has been underperforming as an anchor tenant, failing to drive as much foot traffic as competitors like Checkers. This reduction aligns with Pick n Pay’s strategy to modernize and downsize its retail footprint.
Edgars: Space has already been reduced by 4,500 square meters, with an additional 3,000 square meters to be cut. The space taken back from Edgars has been relet at higher market rates.
Game: One store has closed, reducing its space by 9,000 square meters. The reclaimed space has also been relet at better rates, improving the overall trading margin and density.
Ster Kinekor: The number of cinemas will be reduced from six to two in the next financial year. This move mitigates rental income risk, as the additional space has already been relet.
Redefine Properties said it is optimising space in its malls to increase trading density and improve financial performance.
For instance, at Mall of the South, space taken from Game was relet to Shoprite and other value-focused retailers, boosting trading margins and density.
The company also pointed to the impact of online shopping on retail behaviour.
Online apparel sales account for 4.5% of the South African retail market, with 60% of these sales through omnichannel retailers. Although pure online sales are still a small percentage of the total market, they are expected to grow significantly.
Redefine Properties said it adapting to these changes by ensuring stores are the right size and offering the right merchandise.
It is focused on attracting omnichannel retailers and experience-based retailers to its shopping centres to capitalise on the growth in online shopping.
Shoprite Group, meanwhile, continues to show strong growth across its range of branded stores. Africa's largest retailer revealed Tuesday (September), that customer visits for the full year period ended 30 June 2024 increased by 3.7% and average basket spend increased by 8.4%.
The Checkers mid-to-upper segment supermarket chain, including its 38 larger format Checkers Hypers, increased its sale of merchandise by 12.3%, contributing 39.9% to the group’s core Supermarkets RSA segment’s sales.
Checkers, inclusive of Checkers Hyper, increased its store base over 12 months by a net of 25 stores to end the period with 321 supermarkets.
In terms of store openings and upgrade activity over the 12-month period under review:
The smaller Checkers Foods neighbourhood format increased by two stores bringing the total in this format to nine stores;
Checkers’ successful FreshX conversion programme continued, ending the period with 115 stores trading in this format (approximately one third of the Checkers store footprint);
In terms of smaller, adjacent stand-alone format stores, 65 were opened during the 12 months:
34 Petshop Science premium pet stores to total 86.
Three Little Me baby stores to total 12.
14 UNIQ clothing by Checkers stores to total 22.
14 Checkers Outdoor stores to total 22.
Shoprite reported 20 net store openings over the 12-month period resulting in Shoprite ending the period with 638 stores.
For Usave, net store openings of 22 stores over the 12-month period resulted in Usave ending the period with 463 stores.
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