Retail is a dynamic environment and normal tenant churn creates the opportunity to constantly refine and shift our tenant mix to match consumer and retail trends. We craft the shopping experience for customers.

  Leasing of mothballed vacancy at Lakeside Mall, Benoni In 2014, a significant 5 000m2 13-cinema premises was vacated and remained unlet. This year, as a result of Shoprite agreeing to waive its exclusivity at the centre, our development team undertook a R75m redesign and redevelopment of the space in the mall's former entertainment area and handed over beneficial occupation to Dis-Chem (1 400m2), Pick n Pay (2 500m2) and Pick n Pay Liquor (130m2). This creates a powerful anchor at a previous weak point of the mall and is positive for the entire retail mix. The two big stores opened post-year end in July, with the liquor store delayed by the Covid-19 regulation banning alcohol sales.  
  Introducing Dis-Chem to Waterfall Mall, Rustenburg We relocated Dis-Chem from Waterfall Value Centre to Waterfall Mall as part of our R72m, 1 900m2 extension project and it was fortuitously able to open in the mall in the weeks before Covid-19. This project also added 251 structured parking bays to the mall.  
  Conversion of office space into retail space at Middestad Mall, Cape Town We successfully converted a floor of unlet office space in this mall into modern retail space, which was well supported and tenanted, and improves the tenant mix.  
  No net new demand for retail space. Worldwide and locally, retailers are consolidating their brands, cutting store numbers and reducing store sizes New development in the retail sector came to a standstill as a result of low demand. We were not seeing retailers leave one centre for another and few were expanding, but several sought to downsize and new retail market entries were non-existent even before the Covid-19 pandemic. Rent was targeted, leasing was difficult and negotiations were challenging, which put reversions under pressure.  
  An ailing economy, unemployment and strained consumers The initial low economic growth forecast of 1% for 2020, which was revised downwards during the year, would be disastrous for retail even in normal times. There was limited top-line sales growth and retailers embarked on massive cost-cutting exercises.  
  A switch to value shopping The lack of disposable income drove support of value fashion and this is a category we can grow in our portfolio. Plastic goods retailers are bucking the trend and cautiously growing their footprints as are, in select cases, food retailers.  


This year was a game of two halves. Prior to the Covid-19 pandemic, our shopping centres' trading densities were on a par with FY19, despite the difficult conditions, and thus in line with our expectations. However, the impact of the lockdown decimated their performance.

Our renewal success rate in FY20 was nevertheless stable and satisfactory. Rental reversions, although negative, were better than those of our peers and vacancy levels were healthier than the benchmarks.

As it is for all retail landlords, tenant retention was a priority for us and we did well although vacancies crept up. The additional vacant space in our portfolio mainly represents a handful of specific, large vacancies which were expected.


Edcon, even before Covid-19, was deteriorating. Reducing our exposure to Edcon was a priority and we were able to decrease the group's space in our portfolio from 120 000m2 to around 88 680m2 in the 18 months to end-FY20. We are pleased with this progress, although we would have liked to do more.

At the time of writing there was some positive news about the Edcon business rescue efforts. CNA was sold in early April. Edgars was given a lifeline by Retailability's bid to take over the top-performing, but not all, Edgars' stores. The Jet stores were under offer from TFG. Both Edgars and Jet deals were subject to conditions, and if successful were expected to be effective from 1 September 2020.

While we have been concerned about a potential increase in vacancies as a result of Edcon store closures, our reduced exposure and the sales, if they go ahead, are likely to lessen this risk considerably.

Even so, there will be vacancies that will contribute further to a glut of retail space in general, and we expect to spend time and money on re-tenanting and where relevant, redeveloping any vacant Edcon premises in FY21.

Retail is a dynamic environment and normal tenant churn creates the opportunity to constantly refine and shift our tenant mix to match consumer and retail trends. We craft our shopping experience for customers.

With the cost of solar installations coming down, and electricity tariffs rising, projects that were previously unfeasible are now proving viable. We have identified and approved several viable solar projects but, in line with Growthpoint's cautious approach to capital spending, we will wait before proceeding with these. We are, however, working on projects to add back-up power generation facilities to certain of our shopping centres. This is an expensive undertaking but we don't see the electricity supply situation improving, considering Eskom's challenges in maintaining its ageing, deteriorating network.

Our Cape Town properties are benefiting from the alternative water supply initiatives implemented in response to the city's water security crisis a few years ago and we are extending these solutions to other regions to reduce our reliance on municipal infrastructure. We have also initiated a project to install smart-check meters at our centres to manage consumption effectively and detect and repair leaks quickly. Our plan is to phase this in for big users in all our buildings in future.

We have found ourselves spending an inordinate amount on fire safety infrastructure as a result of insufficient municipal water pressure. To comply with safety regulations, we have had to build our own water tanks at several properties. The growing inconsistency in water supply means we have had to install tanks so our ablution facilities can function during outages. Boreholes also play a key role in water security at our shopping centres.

We are cognisant of the expected changes in waste regulations and are experimenting with different solutions but have yet to find a feasible one. We will continue to look for answers to the wet-waste challenge.

Our shopping centres are where people interact and interface with Growthpoint and there is a huge focus on reciprocal support. Our centre marketing and social investment programmes are being tailored and targeted towards supporting local communities, which improves penetration in their markets and instils loyalty and a stronger connection to the people who use our shopping centres. The more in touch we are with our communities, the better we can support them and be a part of their lives.

Portfolio highlights

Sunward Park Shopping Centre in Boksburg and Edgars Stanger both transferred out of our portfolio during the year, in July and October 2019 respectively, after their successful sales. We were well advanced in selling Edgars Bloemfontein at year end. It is our only property in the city which made it an outlier and inefficient to manage. We had hoped to make better progress in refining our portfolio. We acquired no retail properties in FY20.


To protect the value and appeal of our retail buildings, we have invested in refurbishments, upgrades and demand-driven expansions of most of our top 10 shopping centres in recent years. These improvements position them well to be competitive going forward. This year, our development team continued to add value to certain of our shopping centres through reconfigurations, and while many of these projects involved only one or a few tenants, the overall impact on the retail mix and value of surrounding retail space is meaningful. In fact, we consider several to be among our key achievements.

Building Area Tenancy m2 actual
floor area
affected –
not centre's
Longbeach Mall Cape Town Refurbishment 3 545   27   August 2019
La Lucia La Lucia, Durban Refurbishment 6 864   66   October 2019
Middestad Mall Cape Town Redevelopment of first floor 19 557   24   March 2020
Lakeside Mall Benoni Redevelopment for Pick n Pay and Dis-Chem 4 892   75   April 2020
Waterfall Mall Rustenburg Dis-Chem relocation and parking deck 16 673   72   February 2020
In progress
Festival Mall Kempton Park Taxi holding facility and extension canopies 1 000   5   Undetermined
Total         269    

Our CSR report details our new initiative aimed at developing local enterprises and entrepreneurs in various communities in which we own shopping centres, especially as valuable opportunities arise when we are embarking on improvement projects. This initiative is being driven by Property Point. We are cognisant of the benefits of working closely with Growthpoint's CSR team and Property Point and it will be a structured focus in future.

Covid-19 impact

From early-March when the first Covid-19 cases in RSA were confirmed, we watched the distress unfold in the already fragile restaurant category and others, especially after the hard lockdown was announced. Non-essential shopping generally tapered off while the support of gyms and cinemas plummeted.

A massive amount of work went into enabling retailers to operate under these circumstances. At our shopping centres, parking revenues were cut off, cleaning increased, sanitiser stations were introduced and there was much liaison with the government in order to understand and apply regulations. It became apparent that there were a number of new initiatives and workstreams which we would need to be part of to navigate the choppy waters, and Growthpoint took a leading role in many of these industry forums and task teams. In addition, there was much information sharing with Growthpoint's other sectors.

In April, shopper numbers were dismal. People shifted what shopping they were doing from enclosed malls to convenience centres in their neighbourhoods or where it was possible, online. Even as more retailers were permitted to open and the lockdown was eased, the mall shopping environment remained unnatural. Open-air centres have performed better, especially where they offer a combination of supermarket, pharmacy and services.

Expenses increased significantly with more cleaning and security needed. We received over 2 000 communications from retailers about their rent. Large retailers were very quick to take legal advice and through the media, created misperceptions with smaller tenants, which took months to clear up.

In step with our retailers, every one of our shopping centres with a management office stayed open in a safe and limited manner. Our great people on the ground provided feedback on customer and retailer conduct to our senior team, whose ability to quickly switch to remote working was impressive. This structure supported our ability to perform well in demanding circumstances.

The uncertainty created by Covid-19 is widely recognised and was magnified in the retail setting. At times it was unclear who could trade with some retailers being certified to trade only to be shut down by police. They were threatened with severe fines. Policing was inconsistent between provinces and between cities. We cooperated with authorities at all times and managed to ensure that our centres remained open for business.

When easing from lockdown level 5 to level 4, the retailers that opened soonest did better, capitalising on pent-up demand, while those who took a while to gear up for opening struggled to gain momentum. Electronics outperformed, driven by the sale of merchandise that supports working from home. With the world working in an increasingly digitised way, we expect this trend to continue, albeit to a lesser extent.

We found retailers were extremely negative about their positions, sometimes validly. Those that were in a weak situation before the pandemic were especially badly affected and some saw this as an opportunity to renegotiate rents.

The PI Group's guidelines steered the minimum relief we offered, but we went even further in specific cases, especially for smaller retailers who were profoundly affected. Our team went into overdrive negotiating and calculating relief packages for thousands of retailers in our shopping centres countrywide.

We initially found it difficult to reach agreements with the industry top five retailers – Woolworths, Mr Price, The Foschini Group, Truworths and Pepkor. However, the PI Group was extremely helpful, assisting in getting landlords and retailers around the same table and collaborating to structure workable solutions. The refreshing co-operation enabled us to get much done through the forum. Even so, negotiations with some of the national retailers were protracted and difficult.

As the weeks passed, more economic activity resumed, but for retail categories that were unable to trade either fully or partially, the pain was extended. We had to alter some agreements and there were some that we had yet to finalise at year end.

In May, as more shops opened, some shoppers returned. Value fashion traded brilliantly, outperforming sales from May 2019, due to a combination of pent-up demand, buying down and the seasonal change resulting in a need for coldweather clothes, especially for children. Home and decor retail experienced a slow start. This category was showing weak performance going into the crisis and consumers had little appetite for big-ticket purchases.

Our hopes of moving to level 3 in mid-May were dashed and our centres remained on reduced trading hours to enable a 5pm closing time. We had to wait until June for the economy to open further. At this stage, about 80% of shoppers returned across our portfolio, with the exception of the Western Cape, where the spread of Covid-19 was peaking earlier than in the rest of the country. This became a pattern as the pandemic peaked in other regions. We noticed that people were still shopping, just more purposefully than before. There is no doubt that online shopping is growing in South Africa, but it still represents a very small percentage of sales even with the digital shift driven by the pandemic. What we see confirms that physical stores remain the vital part of omnichannel retail, and the foundation of most retailers' businesses.

We made a concerted effort to enable our restaurant tenants to re-open and trade – at substantially reduced rents. Sadly, the lockdown operating limits imposed meant that some still couldn't make their numbers work and were unable to re-open.

One of the single biggest issues we had to deal with was store closures after confirmed cases of Covid-19 on the premises. Larger retailers quickly became better and more efficient at responding with sanitisation and isolating and rotating staff, which minimised their closure time. But, for retailers with fewer resources, stores were often closed for longer.

The Covid-19 pandemic came at a massive cost to our retail sector this year and is likely to have a big impact in the year ahead. A higher than normal business failure rate is inevitable and we'll be required to provide more retailer assistance than ever before.

The operating environment has changed for both retailers and malls, but we had to work through the initial shock of this crisis together and we have come through it with stronger relationships. A deeper understanding of our retailers' businesses was gained in the process and will be of great benefit to all of us in future.

This was an intensely stressful period for our staff. While putting everything into their work, the KPI numbers by which performance is measured continued to deteriorate at an alarming rate. This is a difficult situation for people who are passionate about their buildings.

Our shopping centres have always been very much part of their communities and the pivotal role they play was highlighted throughout the Covid-19 crisis. Besides meeting the need for essential goods, many of our centres donated food packs to car guards and others in need on numerous occasions. They collaborated with retailers and supermarkets to collect food and care parcels for the vulnerable. We also worked with SAPOA and the government to identify possible temporary virus testing sites in our portfolio and offered them at no cost.

The big lesson we learnt was that even on the southern tip of Africa we are not immune to, or disconnected from, what happens in the rest of the world. We are part of the global community. We can learn from other countries but, equally, we are up to the challenge of Covid-19 and its impacts on our own retail environments. We appreciate that a lease is a contract, but commercial decisions were needed and winning the battle at the expense of the war is not constructive.

Our team is strong and, with the support of our systems and software, they rose to the challenges and were able to perform intricate analyses which were of immense value in facilitating well-informed decision making. This has added tremendous value and we will continue to generate and use these insights in future.

Outlook for FY21

Cost containment is going to be a significant focus in the difficult period ahead. Rentals will be strained and retailer footprints are certain to shrink generally, but we enjoy the advantage of owning shopping centres that are not oversized. Many of our retailers are right-sized, which might protect us from shrinking store sizes to some extent. We expect shorter leases. We also foresee more business failures and rescues.

Our non-GLA income all but dried up during the hardest lockdown levels, highlighting the need for a formal structure to take advantage of this revenue source. Non-GLA or alternative income is derived from sources outside of long-term retailer leases. Some of the most popular ways it is generated includes temporary displays and exhibitions and advertising. Our drive to unlock added value from non-GLA revenue, inside and outside our properties and through their digital assets, is well advanced and we are finalising a structure which will deliver on this area of potential for Growthpoint. Excitingly, while this began as a retail workstream, it is relevant across all sectors and our entire portfolio. We believe this will improve and increase revenue for Growthpoint and seeing this initiative gain momentum has been a bright spot this year. With the immediate demands of Covid-19 on our portfolio and team, our progress was delayed by several months but we intend to activate our plans for this untapped revenue potential as quickly as possible to support a rebound post-lockdown.

With the experiential and entertainment elements of our shopping centres – a massive part of the social and enjoyable experience – being limited by physical distancing in the immediate future, we will be focusing on creating that experience in other ways, and doing the basics brilliantly is our starting point.

We've invested in our core assets to enable them to weather the storm and to ensure they remain desirable to shoppers and retailers. Our team is stable and strong and know their buildings and markets well.

Growthpoint's participation in the PI Group and leadership in the industry-wide provision of retailer rental relief has elevated our reputation within the retail sector and strengthened our relationships. We are well placed to have open conversations with retailers going forward.

Retail tenants top 10 by gross rental contribution as at 30 June 2020

  Tenants   GLA m2
1 The Foschini Group Limited   58 234
2 Pepkor Holdings Limited   72 763
3 Edcon Holdings Limited   88 746
4 Shoprite Holdings Limited   132 226
5 Mr Price Group Limited   56 626
6 Pick n Pay Stores Limited   110 467
7 Woolworths Holdings Limited   87 268
8 Truworths International Limited   31 564
9 Massmart Holdings Limited   61 928
10 Clicks Group Limited   27 854
  727 676
Balance of the sector   568 549
Total for the retail sector (excluding vacancies)
  1 296 225

Geographical split by GLA (%)


Geographical diversification by value (%)


Retail LSM by value (%)


Segmental split by GLA (%)


Segmental split by value (%)



Retail properties top five by value

Hover on properties below to view infomation


Brooklyn Mall is nestled in the affluent suburb of Pretoria's cosmopolitan area of Brooklyn, surrounded by established upmarket residential homes, corporate offices and a large number of embassies and diplomatic properties. Brooklyn Mall is the premier shopping destination in Pretoria. It offers shoppers a full complement of national retailers, specialist boutiques, restaurants and coffee bars and the best of home and dècor shops.

Pretoria 1 990 7.4% 56 333m2 4.1%

This regional centre is close to the CBD and near the residential areas of Kempton Park. Due to the mall's close proximity to public transport, the centre also benefits from strong support from the Tembisa area. The tenant mix covers a wide range of categories, with a strong national representation.

Kemton Park 1 660 6.2% 82 849m2

Waterfall Mall draws shoppers from as far afield as Botswana. Located in the upmarket suburbs of Rustenburg, the centre has easy access from the R24 and N4 highways. The size of the centre allows for an extensive representative tenant mix which includes most national retailers as well as a variety of specialised retailers.

Rustenburg 1 601 6.0% 49 883m2

N1 City Mall is located in a strong, well-established business precinct with excellent visibility and access off the N1 freeway. The centre offers a comprehensive tenant mix and caters to a wide range of shoppers from LSM 5 to LSM 10.

Cape Town 1 568 5.9% 63 378m2
VAAL MALL (66.7%)

Vaal Mall is in the heart of Vanderbijlpark and the Vaal triangle with 150 fashion and retail stores, a food court and sit down restaurants.

Vanderbijlpark 1 364 5.1% 44 019m2