Iconic shopping mall eyes luxury expansion with Gucci, Louis Vuitton

Dolce & Gabbana, LVMH’s Louis Vuitton and Kering’s Gucci are set to anchor a new luxury retail development in South Africa’s V&A Waterfront, according to the head of one of the continent’s most visited shopping and tourism destinations. 

Cape Town’s V&A is tripling the size of space available for rent to luxury retailers to almost 4,000 square meters (43,056 square feet) in a dedicated new wing, David Green, its chief executive officer, said in an interview.

That comes amid growing demand for high-end goods in South Africa’s second-biggest city.

Representatives for Dolce & Gabbana and Louis Vuitton didn’t respond to request for comment, and a spokesperson for Gucci declined to comment. 

While the firms already have stores at the V&A, these are dispersed among its other retail outlets. Green said that the new development will bring the mall’s luxury retailers under one roof, with store space for the three brands set to double.

In all, the new R207 million development expects to add as many as six new brands, including Capri’s Versace, to existing offerings like Burberry and MaXhosa Africa. 

Africa is emerging as a burgeoning market for luxury goods driven by strong economic growth, an expanding middle class, increasing consumer spending power and a rising millionaire population.

Output in the sub-Saharan region will probably expand 4.2% this year, making it the third-fastest growing emerging- and developing-market behind India and China, according International Monetary Fund estimates.

South Africa, the continent’s richest nation, is the most established regional market for designer goods. Trading density for luxury brands in malls increased 171% in the five years through June 2024, according to Clur’s Shopping Centre Index, which tracks 4.1 million square meters of prime retail space in the country and neighbouring Namibia.    

Green said that the V&A’s new development will “narrow the gap” with the Johannesburg-based luxury arcade known as The Diamond Walk in Sandton City.

The surrounding precinct in South Africa’s economic hub is referred to as Africa’s richest square mile, given its concentration of top businesses, high-net-worth individuals and opulent homes. 

Still, South Africa has among the world’s highest unemployment and inequality rates and is only just recovering from decades of moribund growth.

Demand for designer goods in Cape Town is partly driven by international tourists, including affluent shoppers from the rest of the continent, and the migration of wealthy families from other parts of the country, he said.

The metro will overtake Johannesburg to become Africa’s richest city by 2030, according to Henley & Partners.  

Construction on the V&A’s luxury development, located in South Africa’s oldest working harbour and set against the backdrop of Table Mountain, has already started. It will open for business in phases from November through next Easter.    

The V&A registered record retail sales of 1.4 billion rand in December, its peak period, Green said — up nearly 17% from a year earlier. Stores sold more than 10 billion rand in goods in 2024, about 7% of which were luxury items, he said. 

The company is jointly owned by government-worker pension fund manager Public Investment Corporation and Growthpoint, South Africa’s biggest listed real estate firm.

It’s also planning a R20 billion expansion of the adjacent Granger Bay precinct and expects to receive permission from City of Cape Town authorities in the first half of 2025 for the development, which involves reclaiming land from the sea.