As the recession continues, consumers are keeping their purses tight and have deserted the shopping malls.
The Bank of Namibia data revealed last week that Private Sector Credit Extended increased at a slower pace as consumers kept their distance from credit facilities to avoid spending.
The motor industry and the economy as a whole are continuously straggling. Some sectors are affected more than others are. For example, shops designed for letting at the Council-owned Park Foods shopping centre in Khomasdal are still up for grab. No one takes them.
Many other shops are empty, there are only few small service providers still operating. According to Michael Endjala, manager of the Parkfoods complex, shops are empty because tenants cannot afford to pay the regional council. Most tenants have always been SMEs and they are the most affected by the recession.
People struggled to pay and they closed their business down. However, the council has plans for the mall and must recover the money.
CEO of Oryx Properties, Carel Fourie, has confirmed that there has been a number of vacant shops since the country fell into the recession last year. He said that in the last three years the retail space has grown to a level of possible oversupply of shopping space. He said that some of the smaller tenants at the mall have struggled to pay and that they were releasing a decrease in turnover against increasing monthly overheads.
Fourie also said that Oryx intends to find ways to help smaller start-up businesses to stay in the game as no one wins when a small business is created and then fails only a few months down the line.
Landlords have to assess any business plan of a new tenant as there are very high risks for a person’s family and funders, they cannot simply just sign a deal.
Fourie says that there are challenges that come with the current economic situation.
“There are the obvious challenges that come with less economic growth. We see more tenants struggling to adhere to payment terms, and the decision-making process from potential new tenants is taking longer. Fortunately, with every economic cycle, there are opportunities as well as challenges. The pressure some businesses are experiencing, as well as the competitiveness of the environment, forces all businesses to up their game in terms of customer experience and sustainability.”
They are implementing some changes to help the situation. They will aesthetically upgrade Maerua Mall and they are supporting their tenants by increasing the offering at the Mall, which will include an excellent family entertainment facility and more after-hours activities.
