By Patrick McGroarty

JOHANNESBURG-Tourists love South Africa for its wildlife safaris and mountain-and-sea vistas. South Africans love these things, too, but they reserve special affection for shopping malls and cafes with vistas of parking lots.

From Johannesburg's financial district, Sandton-the richest square mile in Africa-to dusty mining towns in remote provinces, there is nowhere South Africans would rather work, eat or unwind than a sparkling new shopping mall.

"I look around, and everyone's in twos and threes," says Cornelia Pleho, a lawyer meeting a friend for coffee at one of many cafes inside Sandton City, the archetypal South African shopping mall at more than 1.7 million square feet of retail space. "It's where people come to meet."

For developers and their financial backers, malls have been a safe bet for a long time in South Africa. New complexes are currently planned for every corner of the country. But as the economy shows signs of cooling and consumers are spending less, there is growing concern that the mall market is getting too crowded.

In Johannesburg alone, developers have opened a half-dozen complexes in the past few years within a few miles of Sandton City. Construction sites for new malls line the main arteries of the country's commercial capital. On the highway connecting Johannesburg to Pretoria, developers are planning a new million-square-foot mall to cater to residents of the rapidly expanding suburbs between the two cities.

And more malls are on the way.

"I think you could do another five or six in greater Johannesburg," says Patrick Flanagan, founder and executive director of Flanagan & Gerard Property Development & Investment, which opened northern Johannesburg's newest shopping center in April, a 240,000-square-foot-complex along a busy road connecting the financial district to some of Johannesburg's wealthiest suburbs.

Banks have been willing lenders to shopping center developers, who make their investments back quickly because major retailers are willing to sign five- or 10-year leases with annual rent increases between 5% to 10%.

According to Investment Property Databank, South African retail property outperformed office and industrial property in 2011 for the third consecutive year in terms of "capital growth"-a measurement of value that takes into account capital expenditures. The total return for retail property, including income and capital growth, was 10.1%, IPD reported.

Developers have projects in the works for centers that will cater to every income bracket. That includes people using government grants to buy groceries and wealthy suburbanites eager to shop at a growing number of foreign luxury clothing and accessory shops.

But those links in a golden chain depend on consumer spending continuing to grow, a risky prospect in the current economic environment. Some retail industry analysts doubt the market can match developers' ambitions.

"I don't think the rate of growth of malls is sustainable," says Andre Kruger, a lecturer on land valuation at the University of Johannesburg. Malls are thriving as entertainment and dining destinations but are less profitable for retailers, Mr. Kruger says.

Many of the newest shopping malls have been built in small towns, where consumer spending gains are driven by the growing number of social grants the government is giving to poor parents, says Stephan Le Roux, director for retail at Growthpoint Properties Ltd., a Johannesburg-based property developer. But these developments, often built near the townships where many of South Africa's newest consumers live rather than in traditional town centers, can cannibalize the local market.

Developers also are facing signs that South African consumers are spending less. Retail sales were down 1.2% in the first three months of this year over the previous quarter, reversing strong 9% growth in the last three months of 2011.

Falling retail sales could crimp South Africa's growth this year, economists say. Until now, consumer spending in Africa's largest economy had remained strong as Europe's debt crisis sapped demand for South Africa's manufactured exports and local labor disputes slashed mining productivity. Already, South Africa's low growth rate-projected to reach just 2.7% this year, the International Monetary Fund forecast in May-is frustrating the government's efforts to create new jobs, and therefore, more potential shoppers.

At the same time, people who can't find work are turning to government welfare grants instead, putting pressure on the federal budget-and the small base of 4.7 million taxpayers who pay for it. More taxes means less disposable income for South Africa's top earners, too.

"The consumer will be under tremendous pressure over the next 20 years," says Erwin Rode, chief executive of Rode Associates, a real-estate consulting company. As a result, Mr. Rode says, "South Africa is over-shopped at the moment. There is too much shopping space." ...

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