Big changes at South Africa’s largest shopping mall

Fourways Mall has taken significant steps to arrest its financial decline, including new amenities like a padel court and over 50 new leases.

Fourways Mall has been experiencing a financial decline for the past few years, and its owner, Accelerate Property Fund, has been feeling the pain.

Fourways Mall is the largest shopping centre in South Africa, with a gross lettable area (GLA) of over 178,000 m² and around 350 stores.

However, despite its excellent location and track record, the mall has not been performing as well as many hoped following its big revamp, completed in September 2019.

Daily Investor analysed Fourways Mall’s financials since its relaunch in 2019, which revealed a troubling situation for its owner, Accelerate Property Fund.

This analysis showed a decline in the mall’s net rent per square meter, a high vacancy rate, and a big drop in fair value.

The 2019 expansion significantly increased the mall’s GLA, making it the biggest mall in South Africa. However, much of this additional space had been empty because of the mall’s low occupancy rate.

The mall’s net rent per square meter declined from R298 in 2020 to R262 in 2023. With increased costs, this is a poor situation for any property company.

Fourways Mall’s fair value declined from R4.8 billion in 2020 to R4.02 billion three years later. The high cost of its expansion and revamp made this situation worse.

This poor performance was evident in the company’s share price, which has declined by more than 68% over the past five years.

However, the mall’s owners decided to tackle this problem head-on and recently embarked on a turnaround plan that has already borne fruit.

Fourways Mall’s owners revealed a new strategy to reestablish it as a top-tier shopping destination earlier this year.

This plan included partnering with Flanagan & Gerard, a property development and investment company, as the strategic asset managers and Moolman Group as the property managers.

This plan aims to improve signage for seamless navigation, introduce new tenants, and deploy backup power solutions.

It further wants to improve security through better parking area lighting and upgraded security measures.

The plan also includes optimising traffic flow, enlarging parking bays, and revitalising the surrounding area.

Accelerate Property Fund CEO Abri Schneider told Daily Investor that the company has already made good progress since it embarked on its turnaround.

“Significant progress was made in a very short time, primarily focusing on the overall shopper experience and ambience, as well as the tenant mix and layout,” he said.

“In addition, progress was made with renewing leases as well as signing on a significant number of new leases.”

He said a lot of effort has gone into and continues to re-establish Fourways Mall’s brand, including behind-the-scenes efforts.

These efforts included improving traffic flow into and out of the mall, providing easy-to-follow parking signage and wayfinding, and improving lighting not only in the parking area but across the mall.

Schneider said the mall is adding significant entertainment and catering offerings, including padel courts, a running track, and several eateries offering everything from organic produce to fine dining.

In addition, an e-hailing, pick-up, and drop-off area has been created, opening up the entertainment node and enhancing the mall’s accessibility.

A Business Improvement District was launched on 1 October 2024, spanning from Design Quarter to Steyn City, encompassing a security presence of 5 dedicated cars and 42 cameras connected to a control room in Fourways Mall.  

“We will furthermore connect six sets of traffic lights around the mall to emergency power, all to enhance the experience of the shopper around the centre,” he said.

Schneider specified that Flanagan & Gerard were instrumental in achieving this progress and said they are focused on the fundamentals of what makes for a great shopping experience.

He said this comes down to granular elements like appropriate lighting, easy access and egress, wayfinding, and power supply for tenants – which Flanagan & Gerard implemented first, resulting in significant changes in the shopping experience already.

“Moreover, their focus on positioning tenants according to categories by creating retail nodes added ease and convenience for shoppers to compare goods and options prior to purchasing,” he said.

“Lastly, they bring credibility and focus, attributes that our tenants value.”

Schneider said this impact has not only improved the shopping experience but will also reflect in the mall’s financial performance.

When asked about the centre’s vacancy rate, he said the team has signed 52 new leases covering a total GLA of 12,347 m². Some of these include Tactical HQ, Arthur Ford, Baglios, Quick Silver/RVCA, Match Padel, Planet Fitness Gym, Skechers, Echt Coffee, and Fila Kids.

They also renewed 95 leases for a combined GLA of 32,145 m². This constitutes nearly 20% of the mall’s total GLA.

“We have made significant progress with the turn-around of the mall, and feedback from shoppers and tenants underscores the impact of our efforts,” Schneider said.

“There are several activations planned over the holiday season, which we believe will attract additional shoppers to the mall.” 

He said that, although it is still early days, there is a significant turnaround, which is evident, supported by the community in the catchment area and tenants.

Below are images, courtesy of Accelerate, that showcase Fourways Mall’s plans to improve its visitors’ shopping experience.