SA's retail growth driven by demand for human connection – Clur Index
The growth, ahead of inflation, is reflected in the Clur Shopping Centre Index for the second quarter of 2025.
The index is derived from the Clur Collective, an independent platform built specifically for easy shopping centre analysis and strategy to optimise returns.
The platform is an endorsed asset management industry standard and economic indicator tracking over 5.4 million sqm of prime space across South Africa and Namibia.
“Consumer value systems have evolved rapidly, particularly since the Covid-19 pandemic,” says Clur.
The rise of the Belief Economy
“We are now living in the Belief Economy, where trusted emotional and human connection has become the new currency. Many elements of this economy are evident in the growth of social impact retail in South Africa, serving hard-pressed communities and acting as catalysts for further development and community growth.
“At another level, we are seeing the lipstick effect as another element in play – where consumers favour small indulgences to lift their mood when budgets are tight. Health- and wellness-focused services are in demand, such as hair, nail and body treatments. This signals the need for the personal touch element in a world of screen fatigue.”
Trading density growth outpaces inflation
Clur says the Q2 ‘25 national Clur Index for All Centres closed with annualised trading density y/y growth of 4.4%, out-performing June ‘25’s CPI by 1.4%.
“What is significant is the improved performance of regional centres – those sized 50,000 to 100,000 sqm in lettable area. “
Highest y/y growth was shown by community and smaller centres at 5.5%, followed by regional centres at 4.9%. Regional centres showed the highest expansion in growth versus Dec ’24 of 2.4%, followed by community and smaller centres at 1.8%.
All segments expanded, with small regional and super-regional centres showing the smallest expansion of 0.5% and 0.6% versus Dec ’24, with the All Centres Index expanding by 1.4% for the same period.
Provincial performance: Western Cape leads
The Q2 ‘25 national Clur Index for All Centres closed at an annualised trading density of R41,679/sqm. Highest trading densities were shown by the two size extremes of super-regional centres, at R51,012/sqm, and community and smaller centres at R47,118/sqm.
Of the three key provinces, the Western Cape was the top performer, with y/y annualised trading density growth of 6.2%, outperforming June ‘25’s CPI by 3.2%. Gauteng had the next highest y/y growth rate of 4.8%. KwaZulu-Natal showed positive y/y growth of 2%, and is the only key province to underperform June ‘25’s CPI by -1%.
As the top performer, the Western Cape had an annualised trading density of R48,365/sqm. KwaZulu-Natal showed the next highest level of R43,468/sqm. Gauteng had the lowest trading density of the three key provinces at R40,169/sqm.
Clur says what has emerged in the second quarter of 2025 is a balance in growth rates between trading densities and base rents. “In this respect, the market is now in sync for the first time in years, and so landlords and retailers are on a level playing field.”
The Q2 ‘25 national Clur Index for Base Rent closed at R236.59/sqm, with y/y growth of 4.3%, outperforming June ‘25’s CPI by 1.3%. Highest base rentals were shown by super-regional and regional shopping centres at R320.86/ sqm and R231.34/ sqm, respectively.
Top y/y growth in base rentals was shown by regional centres at 5%, and super-regionals at 4.7%, outperforming CPI by 2.0% and 1.7% respectively. All retail size formats grew positively and outperformed CPI.
The Western Cape showed the highest base rent and y/y growth rate of R259.38/sqm and 5.6%, outperforming CPI by 2.6%. KZN showed the next highest growth rate of 4.5%, outperforming CPI by 1.5%, supported by a rental rate of R244.84/sqm. Gauteng follows with a level of R236.51/sqm and 3.8% y/y growth, also outperforming CPI by 0.8%.
Rent-to-sales ratio
The national Clur Index for the annualised base rent-to-sales ratio came in at 6.6% in June ’25, showing ongoing stability and controlled risk.
Super-regional centres had the highest rent-to-sales ratio of 7.2%, with regionals following at 6.9%. Community and smaller centres showed the lowest level of 4.8%.
Of the three major provinces, Gauteng had the highest rent-to-sales ratio of 6.8%, followed by KwaZulu-Natal at 6.5% and the Western Cape at 6.1%. “The rule of thumb being that the lower the ratio, the lower the risk,” said Clur.
“The alignment between rents and trading densities has come after some dramatic shifts in society, shopping centre performance levels and responses to center concepts.
“Shopping centres have moved with the times. Within the last decade, strategic concepts evolved from a ‘chameleon’ to a ‘hybrid’ to an ‘enlightened’ and now to a ‘trusted’ shopping centre positioning.
Evolution of shopping centre concepts
“The pre-pandemic chameleon centre marked a move to fluid rather than fixed formats, comprising an ever-changing, high impact and interactive experiential environment. The hybrid centre took this further during the Covid-ravaged years. At this time, trading densities and rentals plunged, and the rent to sales ratio soared. Accordingly, this concept embraced the need for a new agile mixed-use format including retail, storage warehousing and showrooms.”
Clur said the post-pandemic enlightened shopping centre saw trading densities and rentals improving and the rent to sales ratio dropping. It celebrated humanity, providing a safe accepting space for personal expression, evoking a sense of ease and belonging.
“The current trusted shopping centre positioning has distilled as Covid-induced volatility has balanced, and the Belief Economy has emerged as the Attention Economy fades. Meaningful values, sincerity, and truth are now prioritised over excessive exposure and deception in the age of social media and artificial intelligence. Consumers have outgrown superficial seduction via aggressive, broad-based promotional activity and now crave something real. Trusted emotional and human connection has become the new currency.”