South African retailers set sights on Australia

By

Benjamin Fitzgerald

Published
Dec 22, 2016

A slew of South African brands are about to impede on the Australian retail market, as retail space is likely to increase across major Australian cities next year.

According to Colliers International's latest research, shopping centre floor space will increase from 415,117 square metres in 2016, to 426,924 square metres in 2017.

The real estate maven believes international retail newcomers, especially South African firms, are likely to head to Australia as floorspace opens up in Melbourne, Sydney and Brisbane.

Colliers said the biggest floorspace increases will be in the state of Victoria at 177,621 square metres, followed by Queensland at 118,664 square metres and New South Wales at 72,000 square metres. 

"We believe the increasing level of shopping centre floor space will be met with demand from international retailers such as H&M, Uniqlo and Zara, as these operators pursue market share and maturity in the Australian market,"  Colliers Head of Retail Michael Bate said.

"In addition to these players, we expect that landlords will begin to receive more enquiry from a variety of South African retailers who are looking to expand operations beyond their home shores," he added.

Colliers said Shoprite, Pick n Pay, Massmart, Steinhoff, The Foschini Group and Edcon were some of the South African players likely to enter the Australian market, on the back of their successes with the middle class consumer sector in Africa. 

"Looking forward, growth within the African nation will face headwinds of economic instability, labour disputes, currency exchange challenges and a lack of distribution infrastructure. It is logical therefore, that many of these groups together with their underlying brands will look offshore to facilitate revenue growth, and Australia will likely become an appealing option," said Bate.

Top of the list is Massmart Holdings Limited, one of the top five largest African retailers, said Bate.