Over the past two years, South Africa’s retail pedigree has been boosted with international brands like Zara, Top Shop and River Island.
“If you are developing a new centre there will be food, but
with existing and well-developed centres [that] we are adding on, do you need food as an anchor? We don’t think so,” Redefine Properties chief operating officer David Rice explained.
“Fashion is taking the role of an anchor. So you get double the rent, it will cost less to put them in and it suits the demographics perfectly.”
The battle over exclusive lease agreements among food retailers has made the food space tougher.
Exclusivity clauses are popular among food anchor tenants. These retailers implement restrictive clauses to protect their initial investments in the event of the establishment of the new store – which would in effect prevent future trading and growth. Larger tenants use clauses to enter into long-term lease agreements, largely in super-regional shopping centres.
Massmart recently filed a complaint with the Competition Commission over such exclusivity clauses, citing anticompetitive behaviour against Pick n Pay, Spar and Shoprite.
Redefine CEO Andrew Konig said it had adopted a different approach.
“We are engaging directly with the retailers and trying to work out a commercial solution … We have restrictive clauses with retailers, where we are unable to do some retail development work at some of our retail outlets as a result of those clauses,” says Konig.