South Africa’s Competition Commission is intensifying its scrutiny of the retail property sector to dismantle barriers preventing small, black-owned businesses from accessing shopping malls and retail centres in rural and underserved areas.
The antitrust authority is examining a retail property market estimated at roughly $56 billion, focusing on how ownership structures and leasing practices may be stifling entrepreneurship in some of the country’s poorest regions.
The investigation seeks to determine if large corporate landlords are employing exclusionary tactics that make it prohibitively expensive or legally difficult for small-scale enterprises to operate within these hubs.
According to the Competition Commission South Africa, the inquiry is part of a broader mandate to address structural economic inequalities and the lingering effects of spatial apartheid, which continue to isolate black entrepreneurs from high-traffic commercial zones.
Retail centres in small towns often serve as the primary economic engine for their communities. However, the commission suggests that the dominance of a few large property developers has led to a system where high rents and restrictive lease terms favour national chains over local SMEs.
Local entrepreneurs frequently report being squeezed out by “anchor tenants”—large corporate retailers that often negotiate preferential terms with landlords, leaving smaller shops to bear the brunt of rising operational costs.
Regulatory Pressure on Retail Property Landlords
The probe focuses on several specific practices, including the use of long-term leases that prevent new entrants from securing space and the imposition of exorbitant “turnover rents” that can cripple a small business during lean months.
By restricting access to these commercial hubs, the current market structure effectively prevents the flow of capital into rural economies. When local entrepreneurs are excluded, the wealth generated in these areas typically flows outward to corporate headquarters in major cities rather than circulating within the local community.
The commission is investigating whether these practices constitute an abuse of dominance under the Competition Act. If found to be in violation, the regulator has the power to impose binding remedies on property owners.
Possible interventions could include mandated quotas for SME space, caps on rental increases for small businesses, or the requirement for landlords to provide more flexible, short-term leasing options to foster business incubation.
This move aligns with South Africa’s wider economic transformation goals. The World Bank has frequently highlighted South Africa’s extreme levels of inequality, noting that access to commercial infrastructure is a critical bottleneck for poverty reduction.
Industry observers suggest that the retail property sector has remained largely overlooked compared to the banking or telecommunications sectors, despite its role as a gatekeeper for thousands of small businesses.
The investigation also comes at a time when many rural shopping centres are facing pressure from the rise of e-commerce, though physical retail remains the dominant mode of commerce in the country’s poorest provinces.
The Competition Commission is expected to call for submissions from both property developers and small business associations to build a comprehensive evidence base for its final report.
The outcome of this inquiry will likely set a precedent for how commercial real estate is managed in South Africa, potentially shifting the balance of power from corporate landlords to local operators.
The commission’s final findings and subsequent recommendations will determine whether new regulations will be introduced to force a more inclusive distribution of retail space across the country’s rural landscapes.
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