South Africans live with the consequences of the country’s shopping centre boom every day, whether they queue in a crowded Gauteng mall or travel long distances from a rural town to reach the nearest one. The question of whether the country has built too much retail space is therefore not just a matter for property investors. It speaks to how well ordinary citizens are served, and where they are left behind.
The debate was reignited by comments from Famous Brands CEO Darren Hele on the company’s results call, and the reaction that followed on X. A closer look at the numbers behind the discussion, as set out in analysis published at https://www.moneyweb.co.za/moneyweb-opinion/columnists/does-sa-have-too-many-malls/, reveals a sector with stark internal contrasts.
Retail property is a large part of the economy that many South Africans interact with daily. Since the formalisation of the real estate investment trust (Reit) structure on the JSE, shopping centres have become big business. The JSE-listed Reits collectively carry a market capitalisation of roughly R350 billion to R400 billion. That figure spans many asset types, from offshore property to local offices and industrial holdings, but retail remains the single largest exposure within the sector, at around 38% of listed exposure. Among Reits focused only on South Africa, retail can account for as much as 60%.
One broad way to judge whether a country has too much retail space is to divide total shopping centre space by population, producing a per-capita measure. Charted against the rest of the world, and split between richer developed markets and poorer emerging markets, this measure offers a clue: a country sitting unusually high or low may be overpenetrated or underpenetrated. On this basis, South Africa appears overtraded, with far more retail space per person than the trend would suggest.
Yet an average can mislead, as another account on X pointed out. No South African actually experiences the national average; each person experiences the place where they live. Detail matters, and the detail reveals a dual economy in which a formal, urban-based sector coexists with an informal, semi-urban-to-rural one.
When the per-capita measure is calculated within South Africa itself, work that would be painstaking for an individual but is made easier with AI, the picture sharpens. Most of Gauteng is overtraded, likely a consequence of being a small, densely populated province with traditionally higher LSM groups. The provinces with lower population density are clearly underserved by retail space, except around their larger cities.
That undersupply represents a real gap in service for people in those regions, but filling it is not straightforward. A mall’s catchment area, meaning the people close enough to shop there regularly, will be sparse where population density is low, and that changes the economics of the asset. Whether a sufficient return exists to build at scale in informal and rural markets remains an open question.
The major metros face the opposite problem. Does Johannesburg, Cape Town or Durban really need another super regional shopping centre? Generally speaking, the answer is no, it is unlikely. To put Gauteng’s position in perspective: with 0.72m² of retail space per capita, if it were a country it would sit alongside Japan at 0.75m² or South Korea at 0.62m².
For the public, several conclusions follow. Citizens and communities should be aware that marginal malls are likely to become more marginal over time, which carries downside for the more overtraded parts of the sector. Management teams of listed Reits will not volunteer this, since every one of them argues that their own retail space is not marginal.
The large informal market, meanwhile, offers a genuine opportunity, but it will not be unlocked the same way malls unlocked urban retail in Johannesburg. Perhaps it takes a fleet of subsidised buses that vastly extend retail catchment areas, or e-commerce supported by a fleet of scooters, or something else entirely. The writer of the analysis does not claim to know, but notes the solution will be unique and could unlock a massive undertraded market.
There is also likely to be a future opportunity to repurpose abandoned shopping malls, much as Sandton office space is being converted into residential units. One suggestion stands out for its civic value: converting marginal shopping centres into low-cost schools. The malls are already surrounded by communities, the old shops can become classrooms, and the parking lots can become astroturf sports fields. As the analysis puts it, the country needs more education and probably fewer boutique clothing shops.