If there is one market that everyone understands, it’s the retail industry. As South Africans and consumers, we contribute a lot to the retail industry as a whole. The retail industry has grown substantially in the last couple of years supported by an increase in both the supply of retail space and the number of shopping centres in the country. As a commercial property owner, this is a very lucrative market to be in. Finding out more about the retail industry as a whole will lend a lot more understanding of the pros of owning or leasing commercial property.

The retail industry has grown by an annual average of 3% over the past eight years. The country has seen a boom in shopping centre development and townships and townships have also benefitted from this. With an annual average increase of 29% in online retail sales, total retail trade sales are expected to further escalate. Growth of the industry is largely influenced by economic conditions that consumers find themselves in, this includes the level of interest, the inflation rate and economic growth. Retail industry has its biggest boom over certain times of the year for example Easter and Christmas. Face it, we all tend to overspend over these holidays!

A stable environment allows consumers to spend more, thereby increasing the value of the retail sales trade. At 26.5%, Gauteng contributes the largest share of gross value added by the retail industry. The economic contribution made by the industry is of great value to the economy and the public as it offers more employment opportunities, especially to the youth. Though the industry has various challenges, opportunities still do exist. Some of the challengers experienced by retailers include increased operational costs and skills shortage. However, the relatively developed infrastructure and institutions in the country, make multi-national companies view the country as a hub where they can establish and expand business to the rest of the sub-Saharan African region.

According to Stats SA, the retail industry forms part of the major trade division which includes wholesale and retail trade, repair of motor vehicles, motor cycles, personal and household goods; and hotels and restaurants. The retail industry is composed of seven clusters which are:

  • General dealers
  • Retailers of food, beverages and tobacco in specialised stores
  • Retailers in pharmaceutical and medical goods, cosmetics and toiletries
  • Retailers in textiles, clothing, footwear and leather goods
  • Retailers in household furniture, appliances and equipment
  • Retailers in hardware, paint and glass
  • All other retailers

How can this benefit the commercial property sector?

Having learnt a bit more about the retail industry will help you make the decision as to whether you should invest in commercial property in the retail sector. The answer is yes. As a growing economy, you will see great returns on your property investment. Just make sure that the commercial property you purchase is situated in an area where there is current and potential growth.

Make sure that you choose the right company to see you through your commercial property purchase or lease and that company would be The Property Partnership. With many years if experience in commercial property, The Property Partnership will be able to guide you in the right direction. To find out more about how The Property Partnership. The Property Partnership can help you, visit their website www.property-partnership.co.za