Redefine wants to pilot taking malls online and says damage was less than initially feared

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Redefine Properties wants to move all its malls online.
Redefine Properties wants to move all its malls online.
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  • Redefine Properties has published a pre-close trading presentation in which it named an online platform pilot as one of its top priorities.
  • The company said the online platform will give the entire mall an alternative sales channel.
  • The company also said its malls have recorded positive recovery, despite the July unrest.


Redefine Properties - which owns shopping centres such as Blue Route Mall, Kenilworth Centre, and Benmore Centre - is working on an online platform pilot to take a full mall online.

The property giant said its online platform would give "the entire mall" and its retailers an alternative sales channel.

Sandton City is one mall that has tried going online through the Nedbank Avo super app. However, the app only has ten Sandton City stores listed. It doesn't have the big names that attract the most foot traffic or any store from the famous Diamond Walk where luxury shoppers go.

In a pre-close trading presentation that Redefine published on Wednesday, the company listed the online platform pilot as one of its top priorities for the coming financial year. Redefine's current financial year ends on 31 August. The company will likely elaborate more on how the pilot will work and which malls it plans to start with when it presents its financial results in November.

Covid-19 has forced landlords to adapt their malls to cater for increased online shopping since South Africa went on lockdown in March 2020. Hyprop Investments, for example, said last year that it was looking at introducing storage facilities and collection points for online retailers at its malls.

Redefine said online sales continue to grow, particularly in the grocery and pharmacy categories. But the company said despite the e-commerce growth, the recovery trend in its malls has been "steady and quite positive".

"The footfall and tenant in-store activity also suggests the very pessimistic outlook at the height of Covid-19 and lockdown was unwarranted. Online retail continues to evolve, but most are embracing a dual strategy, and we are looking at how we can enable that as it is clear that it is important that in-store experiences are maintained," said Redefine COO Leon Kok.

Redefine's pre-close presentation showed that turnover for most of its retail tenants has recovered to pre-Covid-19 levels, save for restaurants and entertainment-focused retailers. Performance of large format retail centres has also improved.

In 2020, landlords with big regional malls suffered the most as people preferred to go to smaller convenience and neighbourhood centres. Redefine said by May 2021, turnover for its large format centres also recovered to pre-Covid-19 levels.

Unrest

Redefine also revealed that it will take up to the end of March 2022 to fully reinstate its properties damaged during the unrest in KwaZulu-Natal and parts of Gauteng in July.

Redefine's properties affected by the unrest included Ushekela Industrial Park, Cato Ridge Distribution Centre, Scottsville Mall, Isipingo Junction and 320 West Street in KwaZulu-Natal. In Gauteng, only Chris Hani Crossing in Vosloorus was affected.

Some properties, like Ushukela, suffered extensive fire and structural damage, while others had damaged shop fronts, fixtures and fittings. So, it was easy and quicker to repair some of the affected properties, and tenants are already trading again.

But Redefine CEO Andrew Konig said the quantum of the damage caused by the unrest was less severe than what the company initially thought. He added that Redefine has adequate Sasria insurance cover to cover the reinstatement cost and any losses of income during the rebuilding. 

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