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A few weeks ago I promised my grandson we would stop at the coffee shop that over looks the new shopping center building site. He is fascinated with cranes and all machines building related. This was his photograph and I think he did very well. He is not one to miss a trick and knows a crane visit also includes a slice of chocolate cake whilst we sit at the coffee shop. I don't mind this at all and reward smart thinking and find it quite ingenious. His normal tactic is to ask if we can buy something for his sister which he leaves out the part that it includes him until you agree thinking it is him being thoughtful.


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The hill in the back ground is where we live and yet this is not the closest shopping center. South Africa for some reason loves shopping centers and does not have restrictions like they have in the UK. If I remember correctly for planning permission you need a catchment area of 250K people. If there are 500K people in the vicinity then there is allowed to be 2 centers to service the community needs.

We have 2 large shopping malls, a smaller two level mall and 4 of what I would call strip malls/centers. These are all within a 5 minute drive of each other and it is no wonder we had one strip mall closure a few years ago. This new mall is stealing all the big tenants from another mall 3 minutes up the road so that mall will suffer and become a white elephant. This is what happens continuously and would not be allowed in other parts of the world. Maybe the catchment area has 200K maximum
and this is being generous and more like 100K.

The anchor tenants is what covers your risk and why they normally get such a good deal with a fixed rent for 5 or 10 years and no increases. Once the footfall increases due to he anchor tenants then the remaining shops pay premium rental rates.

I used to own a shop in Gateway which is an upmarket mall in Umhlanga Rocks, Natal and the rentals were crazy. Our shop sold birthday cakes and eventually concentrated on samosas instead as that is where the numbers came from. We had employed a team to make them as we could not find enough supply. The numbers went from 5K per weekend up to 40K per weekend. This became a full time job buying the ingredients and we used no filler like soya. Customers could tell the difference and why we became the main outlet.

Unfortunately with landlords we were not offered a renewal of the lease and wee shut down. It turned out two other businesses wanted our business shut down as hey used to sell spices and samosas and now couldn't. They could, but no one wanted theirs. A good business forced to shut down for no apparent reason and we had no legal leg to stand on.

What makes no sense is all these shopping centers opening up within walking distance of each other and they are all offering the same types of shops. With online growing how many centers will go bankrupt in the future. Only 1 mall offers a cinema as that seems to be slowly on the way out. The days of going to a restaurant and watching a film is not date night anymore as how many youngsters can afford that. The destination food shops in the strip malls will survive and the malls will be gone within 10 years. We can see this already with the number of closures and no new tenants taking their places.

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