Pick n Pay’s new distribution centre, Eastport, in Gauteng, is being developed at a cost of R2bn, including land and construction. Picture: SUPPLIED
A brief review of the period since 2018 gives us a better sense of listed property’s trajectory. Substantial volatility, share price declines caused by the Resilient group of companies, office and retail oversupply and SA’s struggling economy, together created hesitancy and negative sentiment. Surprisingly, the civil unrest in KwaZulu-Natal and Gauteng in July 2021 did not have the expected impact on the sector. This, coupled with better-than-expected macroeconomic data for 2021 enabled many companies to recover their cash flow, improve their operational outlook and return to dividend-paying positions.
Overall, general equity investors will have increased appetite to participate in the sector, with acquisitions and consolidation a growing theme. As sector volatility starts to normalise to historical levels, this resilience will bolster continuing growth. Sales growth from most SA retailers has been good. In 2021, community shopping centres performed better than those in urban areas. Food was one of the main reasons for this growth, followed by non-discretionary spending on goods such as clothing and electronics. And while the original outlook for the year was negative, this has been rebased for expansion in 2022.