South Africa's township malls pull ahead as retail value shifts to community hubs

Township and rural shopping centres are extending their lead over suburban malls, delivering above-average returns and attracting significant capital, according to Absa's 2025 MSCI South Africa Annual Real Estate Index. With the performance gap widening since 2022, the trend points to a shift in where retail property value and opportunity are being created.

The township economy is put at roughly R900 billion, yet 49% of township entrepreneurs still work from a home or a garage, only 11% operate from commercial premises, and nearly 80% operate outside formal registration. That scale of activity is why township retail infrastructure, and the digital inclusion gap within it, matter so much to landlords and tenants alike.

Township and rural malls are no longer simply where people shop. For many communities they are the only formal, serviced, secure and trusted space available, where residents bank, collect grants, buy data and devices, print documents and do their daily shopping under one roof. The tenant mix in these centres has quietly become a services mix, and the centres that understood that shift are outperforming the rest of the sector.

Connectivity alone does not guarantee digital inclusion, because connection has two halves: the network and the device. Property groups and retailers have invested heavily in the first half through fibre, centre infrastructure and footfall, but access to smartphones remains the missing piece for millions of economically active South Africans with limited credit histories.

One operator working specifically in that gap is PayJoy, a global fintech and public benefit organisation serving more than 20 million customers across nine countries including South Africa. Its smartphone rental model lets customers take a device without a traditional credit history through mall-located kiosks or partner stores, a structure that also raises handset sales and customer visits for retail partners.

Fairvest Limited, a listed real estate investment trust, frames the shift around what a modern centre owes its community. "Innovative tenant partnerships are fundamental to creating accessible and sustainable retail centres," the company said, adding that close work with retailers drives consistent footfall and lasting value across the tenant base and surrounding communities.

Rural and township retail specialist Exemplar Retail, which manages a portfolio of more than 750,000 square metres, argues the same point belongs in leasing strategy rather than a corporate social investment budget. As South Africa's economy becomes more digital, industry players say advancing inclusion will depend on closer collaboration between technology companies, retailers, shopping centres and property owners, and on treating it as infrastructure rather than an add-on.