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Bo Kaap, Cape Town, 8001

Jaime-Lee Gardner
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Louise Martin
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Getting the retail mix right in mixed-use developments

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Getting the retail mix right in mixed-use developments

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3 min read

Gone are the days when developers took a shot in the dark choosing retail tenants, with some white elephants that followed.

The retail component of a mixed-use space is optimised today with the help of consultants and technology, underpinned by solid developer experience, greatly improving and securing returns on investment.

This is especially important for mixed-use developments, because, as Nicholas Stopforth, MD of the Amdec Group (developers of Melrose Arch, Harbour Arch and the Yacht Club), observes, ‘new urban developments (mixed use) have a hugely positive impact on the economy, driving job creation in the construction, hospitality and retail sectors.’

In the case of Amdec’s planned R10 billion Harbour Arch, for example, it is set to change the entire Cape Town skyline, much like Darling Harbour did for Sydney and Canary Wharf for London. So the retail mix here needs to be painstakingly composed, making the most of this premium location.



Each mixed-use development is specific to its location. A mixed-use development in a CBD is very different to one in a suburban area, with different needs and markets.

Established mixed-use developers, from the outset, familiarise themselves with the relevant municipal spatial development framework (SDF) outlining the city’s development nodes.

These nodes are in keeping with government’s strategy for urban growth to be compacted, in other words, promoting higher density, mixed-use development in well-located parts of our cities, rather than spreading out.

The retail component depends on how far the development is from other shopping centres and amenities like schools and hospitals. ‘Mixed-use developments on the urban edge have to consider providing these amenities if they’re not close by,’ says Nicolas Kyriacos from Investec Property.

A good example is Steyn City near Midrand, which is close to Mall of Africa. As such, the retail mix in its planned 5,000 square metre ‘city centre’ will come down to the essentials expected in a high-end residential environment, such as a small grocery outlet, deli, pharmacy and coffee shop. ‘There will be a clinic, but not a hospital, as there are private hospitals in the vicinity,’ says Guiseppi Plumari, CEO of Steyn City Properties.

Also, in developments that are further from the city, thought has to be given to nightlife. ‘The shops and services you have must also support an exciting nightlife, so residents aren’t forced to leave in search of entertainment,’ says Brett Petzer, founder and COO of The Green Housing Company.



Once the development is complete, a leasing development team steps in to determine the best mix of retailers to be installed in the gross leasable area (GLA), as well as the best positions for the different businesses.

‘It is imperative to match the right anchor tenant with the surrounding community’s needs and preferences, so this is our first priority,’ says Ebrahim Parker, CEO of FPG Property Fund. ‘The hardest task is to fill the centre with the right tenants that we believe will be sustainable over the long term, and not simply accept the first one that is interested. At the same time, tenants must remain flexible enough to adapt to change as customer profiles and demands change,’ he says.

Professional guidance is provided by companies like Retail Africa and Retail Detail, which specialise in retail planning, taking into account many factors such as anchor versus line shop ratios, and food and beverage versus retail ratios.

Ryan Bloom, partner at Retail Detail, explains that each retailer is grouped into a type, e.g. clothing and merchandise, and their lease space is calculated as a ratio against income produced for the property landlord. ‘You can soon see what and where the good tenants are, which in turn informs the leasing team in terms of how much space to allocate and where,’ he says.



In determining what the local market wants, technology is increasingly being used. Foot traffic is data-tracked, and the shopper market is digitally researched to determine their needs and mindset.

‘We use a digital methodology called environment media mapping (EMM), which analyses shopper flow into various areas of the retail space like parking, food court, supermarket, etc. It also gauges how long the shopper spends in these areas,’ explains John Faia, GM of Mall Ads, which is a division of the Provantage Media Group that manages usage of non-GLA spaces in retail precincts.

Similarly, T-Systems, a global IT services and consulting company, offers out-of-store retail analytics that monitor people flows, indicating where customers are going, where they came from and when – and in what numbers.

These statistics are then visually shown on a user-friendly dashboard, creating a comprehensive resource that makes the smart retail vision a profitable reality.

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