South Africa’s busiest mall, Mall of Africa, is performing exceptionally well and generates over R61 million in gross monthly rental (GMR).
This was revealed in its owner, Attacq’s, latest results. Attacq – which owns properties like Mall of Africa, Lynnwood Bridge and the Garden Route Mall – released its results for the year through June 2024 on Tuesday.
These results revealed a strong performance for the real estate investment trust (REIT), including a 7% increase in revenue to R2.60 billion.
Despite its gross property expenses increasing by over 12%, the company managed to achieve a profit for the year of R1.22 billion – a 134% increase from the previous year.
Its total comprehensive profit for the year, which includes fair value losses and foreign exchange losses from operations outside South Africa, was R1.01 billion, a 53% increase.
Its basic earnings per share increased by 83% to 135.3 cents per share, compared to the previous year’s 73.8 cents.
The jewel in Attacq’s crown and its flagship retail asset is Mall of Africa, one of the largest and busiest malls in South Africa.
Attacq previously owned 80% of the mall but closed a deal in the past year to buy the remaining 20%.
Earlier this year, the Competition Commission approved the R1.07 billion deal for Attacq Waterfall Investment Company (AWIC) to buy the remaining 20% of Mall of Africa.
Mall of Africa was developed and co-owned by the Atterbury Property Group. It was a R5 billion development.
In its latest annual results, Attacq said that, as a leading super-regional retail-experience hub in Gauteng and an anchor of Waterfall City, Mall of Africa continues to perform strongly as the city densifies.
This can be seen in the mall’s financial performance. Its valuation rose by almost 33% over the past year, going from R4.48 billion in 2023 to R5.96 billion in 2024.
Its vacancy is also down significantly, from 4,556 m² in 2023 to 1,475 m² in 2024. The mall’s GMR in 2023 was R43.97 million and grew to R61.29 million in 2024.
Mall of Africa’s strong performance reflects the popularity of malls in South Africa and their potential to rake in cash.
Growthpoint Properties also recently released its results, which showed a similar success for the V&A Waterfront in Cape Town.
The company – which jointly owns the V&A Waterfront with the Public Investment Corporation – said the mall’s performance exceeded its expectations.
In its results for the year ended 30 June 2024, Growthpoint said that its key performance indicators improved across its retail, office and industrial sectors, which included arrears, rental reversion rates, valuations and vacancies in office and retail.
The V&A Waterfront was a standout performer due to the positive impact of increased tourism, with distributable income jumping by 12.6% to R775 million (FY23: R688.4 million)
The V&A Waterfront is a 123-hectare mixed-use property development situated along the historic Victoria and Alfred basin, which formed Cape Town’s original harbour. Its properties include office, retail, fishing, logistics, hotel, residential and industrial.
However, not all malls in South Africa are as successful, with several struggling over the past few years.
For example, Growthpoint’s recent results also revealed that Brooklyn Mall is facing severe challenges.
The mall’s vacancy rate has shot up over recent years, going from 3.6% in 2019 to 18.7% just five years later.
Brooklyn Mall is one of the largest properties in Growthpoint’s local property portfolio. It comprises the mall and the Brooklyn Design Square.
The mall spans 75,258.65 m² with a 5.2 million average annual footfall and 220 stores. This makes it one of the biggest malls in the country.
However, in recent years, the mall’s performance has been on a significant decline, with vacancy rates rising every year.
This has meant its gross rental income taking a significant hit, going from R306.87/m² in 2019 to R260.56/m² in 2024.
Another local mall that is facing difficulties is Accelerate’s Fourways Mall, which boasts the title of South Africa’s biggest mall.
It has a staggering 178,000 m² of gross lettable area (GLA) and around 437 stores. However, despite its impressive size, Fourways Mall has a low trading density at R3,699/m².
Trading density is a key metric that reveals how much revenue a shopping mall generates per square meter of its leasable space. In other words, it shows how productive the mall’s selling area is.
Fourways Mall also has a significantly high vacancy rate of 15.90%.
This mall’s performance has been a severe drag on Accelerate’s results, and the company plans to raise R200 million from its existing shareholders through a rights offer to stem this decline.