Retail property landlords are investing millions in education, skills development, recreational facilities and sustainability as part of their engagement with the communities they serve.
Belinda Clur, managing director of Clur International. Image supplied
The extent of their investments is revealed in Belief, the latest edition of Clur Connect, a video report on retail property performance, the importance of the sector’s contribution to the economy and its international leadership.
Clur Connect is part of the Clur Collective, SA’s early-warning performance, strategy, analysis and benchmarking platform built exclusively for shopping centres.
This endorsed industry standard and economic indicator covers over 5.4 million sqm across property funds in SA and Namibia. This weight and a partnership approach underpin the Clur Shopping Centre Index.
Growth across all retail formats
Belinda Clur, managing director of Clur International, which produces Clur Connect, says that over the last number of years, the South African retail property sector has really shown its mettle by moving with the times in the face of a highly volatile market and a rapidly evolving consumer system.
“Currently, we are in a belief economy where the currency is made up of meaningful values, trusted emotional and human connections and these elements are highly evident in the way retail property is operating. At present, we see continuing growth across all retail formats driven by an increasing desire for human medicine in the form of physical, social and community interaction.”
The belief economy
Itumeleng Mothibeli, managing director Southern Africa of Vukile Property Fund and president of the SA Property Owners Association, says the belief economy reminds him of the Zulu greeting, sawubona.
“Directly translated, Sawubona means I see you and the belief economy and how it translates into our business is exactly that.”
He says Vukile strives to be customer-centric.
“We really believe that we don’t want to be seen as an island of success generally, in a context and environment that is highly impoverished. We really want to be seen as part of those communities, and that translates in how we show up, how we listen, how we collect data, how we try and understand and how we show that we are humble in delivering our product.”
Amelia Beattie, head of business efficiencies, property and sustainable impact, insurance and asset management at Standard Bank Group, says: “The belief economy is where values, integrity and social impact connect so that people truly believe that those around them that can make an impact care for their growth.”
Empowered to live a better life
The group’s community initiatives are aligned to their positive impact strategy, where they can make a real difference.
“We link that into giving people skills, and therefore we focus on education. We link that into the financial literacy and financial fitness initiative so people can themselves be more empowered to live a better life.”
She says the group is supporting the creators of the Novar app, built for children to have education delivered on a cell phone, so they can reach every child that cannot get to education physically.
“It’s really mind blowing. It’s changing the world of education, and it’s such a wonderful story to be part of.”
Jason McCormick, CEO of Exemplar REITail says: “The belief economy has been active in our market for a lot longer than the formal cycles suggest. I think because of the spirit of Ubuntu that operates within our market, the system of togetherness and shared well-being, the village that raises the child, has been in our market for a lot longer than in some of the other sectors. ”
Community upliftment
He says the company looks to build the community as much as it looks to build real estate in those communities.
“We’ve donated approximately R32m into communities, mostly focused on short-course education. We’ve sponsored over 250,000 short courses. We donate five to six million Rand a year on educational bursaries for communities in need. We believe education is the cornerstone of everything.”
Malose Kekana, group CEO of Pareto Limited, says: “Our approach really has been that we are a big corporate citizen. And we make a lot of money from the communities in which we do business. And so part of our ethic as a big corporate citizen is not merely to do things just for profit, but it’s also to make sure that we do give back, because we can’t do well as companies that do business in communities if those communities are not thriving.”
He says that Pareto’s community initiatives largely focus on children, education and enterprise development. In supporting young entrepreneurs, Pareto started a fund to introduce young brands, some of which have become a big success.
Vuso Majija, executive director and head of retail, Fortress Real Estate Investments Limited and a director of the SA Council of Shopping Centres, says shopping centres are economic catalysts in communities and big employers.
“For every 30 squares of gross lettable area that one builds, one job is created. That’s a rule of thumb in the industry. So if you’ve got a shopping centre that is 20,000 square metres in size, you may create around 600 jobs.
“In our approach to community initiatives, firstly, we focus on skills development. Currently, we’ve got over 40 students on our bursary programme. We also have 20 graduate interns who are working in various parts of our business. Secondly, we work with various organisations. One of them is Food and Trees for Africa. What we do with this organisation is that we help communities and schools to build community gardens, thereby transferring skills to them in agriculture, but also helping with immediate nutritional needs.”
Lindi van der Merwe, national leasing manager of Mowana Properties, says its view of community initiatives is to have a percentage of the community operating the various shops in its centres. It assesses how much space it can make up into smaller pockets to bring in the community, or if there is an opportunity for a strong local operator to become a tenant.
“One trend that we are seeing in our township malls is that the public services sector is starting to take up more space.”
A wellness revolution
Clur says business and consumers are engaged in a wellness revolution. “In fact, wellness has moved beyond a trend. It is now a movement.”
Beattie says: “ESG (environmental, social and governance) is integrated in our business. And sustainability thinking forms part of the way we do business. We drive that through a positive impact agenda and making sure that we maximize the impact of all the initiatives that we take.”
McCormick says Exemplar finds its township malls are the nexus of the community where people can come and interact. It has seen a huge increase in spend in health and beauty across its portfolio, but also the interest in the communities in health and beauty, and in health in particular.
“There’s so much aerobics, outdoor yoga, football, netball competitions running at the moment. We’re seeing a resurgence in the wellness of the individual, as well as the wellness of the community at large.”
Kekana says every one of Pareto’s shopping centres except one has a gym and the company has invested in children’s play areas which has had a positive impact on its portfolio. He says, as an example of the wellness revolution, padel courts have increased exponentially because people value health and their experience .
“We’ll see things like that continue to grow.” “We will continue to invest in things like action sports, children’s free play, and parks on our real estate, especially where we’ve got a lot of space.”
Van der Merwe says Mowana focuses on “health and wellness, fun runs, walks and other exercise activities at its centres.”
Fortress creates recreational areas where it develops shopping centres, since often there are few facilities around the communities they serve, says Majija.
Looking at the influence of the belief economy on shopping centres in the future, Beattie says that in preparing for the 2030 Net Zero target for the Standard Bank Group property business, the focus was on creating alternative forms of energy.
It has a number of solar plants on the roofs of its shopping centres, the most notable being the one on the Eastgate rooftop, the biggest rooftop solar on a shopping centre in South Africa.
“One of the other things that have been really important for us was to reduce what we sent to landfill, and we worked really hard on a strategy to reduce the waste in our environments and have received a certificate of our entire portfolio being Net Zero Waste ready. Imagine the waste that comes out of a shopping mall, from our restaurants, from the customers, from all the shops that we have, all those get composted on site, and we send very, very little of that to landfill.”
Shopping centres of the future
Clur says the belief economy represents an evolving mindset and will influence the shopping centre of the future.
“Key to this evolution, we need to rethink our view on anchor tenants. I think we’re going to see a shift away from a pure anchor tenant in a traditional form and a move towards an anchor mix. In other words, a strategic blend that attracts.”
Van der Merwe says “each of Mowana’s shopping centres needs to have its own identity and the focus is for it to be a unique tenant mix.”
Clur believes shopping centre design will evolve considerably, becoming more meaningful, sophisticated, beautiful and artistic. Authentic presentation will be increasingly important, specifically with Instagramable features and a focus on nostalgia.
She also believes that service levels will elevate dramatically and the lipstick effect will entrench, which is purchases of small uplifting luxuries to soothe one in hard times.
Kekana cautions that there’s been a shift in the consumer mindset. “If you don’t cater for family and for a full experience, I think you’re going to get caught short.
“Previously retailers could introduce a concept and then customers would follow. But we are seeing a reverse in that customers are looking for what they’re looking for and property owners and retailers have to respond.”
Understanding consumers and communities
Mothibeli says Vukile believes a lot in data and using data to help the company understand consumers and communities better.
Majija notes that since shopping centres are an important catalyst for development, it’s important that shopping centre owners start to think about rejuvenating the areas around their shopping centres. “You can start small with a litter campaign, but that will have an impact on your community.”
Clur feels the shopping centre of the future will have a much stronger empathy theme, with more recognition of the fact that hard times and hard head spaces need to be met with soft times and soft spaces.
“This will reflect in a focus on happiness, dopamine, and uplifting spaces, as well as the theme of dignity. And this will occur in respect of not only people, but also the planet, animals, and technology.”
“As we move forward into the future, and as the belief economy evolves, it is critical to remember that ultimately, your brand must be trusted, and your brand must have meaning.”