Overvew of Shoping Centre Management

8/18/2019 Overvew of Shoping Centre Management

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by: Andreas KartawinataRetail Property Management – Jakarta, Indonesia

2016


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At the beginning : wet market & shop houses

SHOPPING CENTER EVOLUTION


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SHOPPING CENTER EVOLUTION

At the beginning : wet market & shop houses


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WHAT IS A SHOPPING CENTRE?

a shopping centre can be

defined as a building that

contains many units of shops but

is managed as a single property

ICSC(2004):

a shopping centre as a group of

retail and other commercial

establishments that is planned,

developed, owned and

managed as a single property,with on-site parking provided


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According to the International Council of Shopping Centres

(2004) , the basic design confi gurations of shopping centres

are as follows :

MALL

The most common design mode for regional and super-

regional centres is often referred to as a ‘ shopping mall ’ .

The walkway or ‘ mall ’ is typically enclosed, climate-

controlled and lighted, fl anked on one or both sides by

storefronts and entrances. On-site parking, usually provided

around the perimeter of the centre, may be surface or structured.

ICSC DEFINITIONS


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OPEN-AIR CENTRE

An attached row of stores or service outlets managed as a

unit, with onsite parking usually located in front of the stores,

with common areas that are not enclosed, is often referred to

as an ‘ open-air centre ’ .

Open canopies may connect the storefronts, but an open-air

centre does not have enclosed walkways linking the stores.

Historically, the open-air confi guration has been referred to

as a ‘ strip centre ’ , although the strip centre got its name

from the linear form, where stores sit side by side in a long andnarrow row of stores.

ICSC DEFINITIONS


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HYBRID CENTRE

This is a centre that combines elements from two or more of

the main shopping centre types.

Common hybrids include value-oriented megamalls(combining mall, power centre and outlet elements), power-

lifestyle centres (combining power centre and lifestyle centre

elements) and entertainment-retail centres (combining retail

uses with megaplex movie theatres, theme restaurants and

other entertainment uses).

ICSC DEFINITIONS


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WHAT IS A SHOPPING CENTRE?

Delisle (2007) shows that over the years, shopping centre formats

have taken on a confusing array of identities, with names that

include such descriptors as

centres,

commons,

crossings,

hybrids,

lifestyle centres,

malls, markets,

marts,

mega-malls,

mixed-use,

outlets,

parkways,

places,

plazas, promenades,

shops,

strips,

squares,

super centres,

town centres,

urban retail,

junction villages.

etc, etc


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Asia-Pacific Shopping Centre

Classification Standard

1. GENERAL PURPOSE CENTER

ICSC DEFINITIONS


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Asia-Pacific Shopping

Centre Classification

Standard

1. GENERAL PURPOSE CENTER

ICSC DEFINITIONS


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Standard

2. SPECIAL PURPOSE CENTER

ICSC DEFINITIONS


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Standard

2. SPECIAL PURPOSE CENTER

ICSC DEFINITIONS


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Standard

3. OTHER MAJOR RETAIL

REAL ESTATE

ICSC DEFINITIONS


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AREA OF MEASUREMENT

The area of measurement for classifying shopping centres

is Retail NLA.

The NLA of a shopping centre is typically 55%-65% of the

total Gross Floor Area, but this can vary across

geographies and centre types.

ICSC DEFINITIONS


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RETAIL NET LEASABLE AREA (NLA):

The measurement of the internal floorspace of a retail unit that

can be used for selling and displaying goods and services. It is

measured from the inside face ofthe shop walls, excluding any

protrusion from the wall.

Retail NLA excludes non-shopfront office, hotel, residential and

other non-retail uses.

Typically the measure:

• includes the area taken by internal columns within a tenancy;

• includes storage connected to a tenancy; and

• excludes other unusable space such as a shared riser.

ICSC DEFINITIONS


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ICSC DEFINITIONS

Tenants are defined based on their size, as outlined in the table

below.


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Within these shopping centre definitions, the following tenant

category definitions are used:

Food & Groceries: includes delicatessens, fruits &

vegetables, butcher, poultry, fresh seafood,

bakery/cakes/pastries, other specialty food and liquor. F&B (Food & Beverage): includes takeaway food,food

courts (including common area seating), cafes and full-

service restaurants.

Entertainment: includes cinemas, gaming/gambling

venues, family entertainment centres, video game

parlours, bars/pubs/taverns, bowling alley, ice-skating,

internal theme park, Karaoke.

ICSC DEFINITIONS


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DEPARTMENT STORE:

A retail tenant of greater than 50,000 sq. ft. that provides a

wide range of goods (e.g. apparel, cosmetics, homewares)

segmented into departments. While a department store may

carry a range of different brands, it will be leased to a singleleasee who may then sublease space.

Would typically have less than 20% of NLA dedicated to

food & groceries or F&B.

The focus of a department store is typically higher-order

retailing (e.g., fashion, accessories, homewares), with less of

a focus on day-to-day convenience shopping.

ICSC DEFINITIONS ANCHOR TENANT DESCRIPTIONS


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HYPERMARKET:

A tenant of greater than 50,000 sq. ft. that provides a wide

range of goods segmented into departments, with a heavy

focus on food and groceries.

At least 20% of floorspace or NLA would be dedicated to food &groceries.

The focus of a hypermarket is typically on lower-order retailing,

concentrating on day-to-day shopping needs.

SUPERMARKET:

A tenant of between 10,000 and 50,000 sq. ft., of which 80% of

floorspace or NLA is dedicated to a wide range of food &

groceries.

ICSC DEFINITIONS ANCHOR TENANT DESCRIPTIONS


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SHOPPING CENTRES AS PLACES OF BUSINESS

Shopping centres have been developed to provide

a business place that includes retail spaces, facilities

and services to the retailers.

As a business place, the location factor is very

important. This is because the location factor is

typically what fi rst attracts successful retailers.

Aside from a good location, accessibility also creates

the desire to visit and shop at shopping centres.

THE ROLE OF SHOPPING CENTRE


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SHOPPING CENTRE AS A PROPERTY

A shopping centre as a property is seen as a building

that contains physical structures, spaces and

facilities, and is managed as a single property.

As a property, it needs to be managed and

maintained to ensure that its value is increased.

The excellence of performance or the worth of a

shopping centre is generally assessed in terms of its

value in the property market



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SHOPPING CENTRE AS AN INVESTMENT

Shopping centres have been built by developers,

often managed by the same or specialised

organisations, and have been sold to the institutional

investment community.

Historically, the ownership of most shopping centres

has traditionally passed to pension funds and

insurance companies.

The aim of the owners is typically to secure a future

stream of income in return for their capitalinvestment.



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THE ESTABLISHMENT OF MANAGEMENTSYSTEMS IN SHOPPING CENTRES


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KEY SUCCESS FACTOR OF

A SHOPPING CENTRE

1. Location, location, location

Right Location, Visibility, Accessibility

2. Management

1. Promotion and Event

2. Customer and Tenant Relation3. Cleanliness and Security

3. Design

1. Parking Spaces

2. Homey Place

3. Lighting and Ambience4. Layout and Tenant Mix


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STRATEGIC SHOPPING CENTRE LAYOUT

A shopping centre can’t hold you

against your will, but it can be

designed to make you stay longer

than you intended.

Tricky architecture and subconscious

marketing can slow you down and,

theoretically, keep you shopping. The

idea being, the longer you linger, the

more impulse buying you’ll do.


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What experts say

“At the mall, the plan is to maximise unplanned

purchases – to get people to stay longer and

deviate from their plans,” says Charles Areni,

professor of marketing at Macquarie Graduate

School of Management.

Not all researchers believe mall designers are

manipulative. But media analyst Douglas

Rushkoff argues a number of strategies are

being used to create environments that

encourage consumers to spend up big. Theidea is to disorient the shopper and soften

them up for manipulation.



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The decompression zone

shoppers need a three- to five-metre

buffer zone to adjust to the changes in

lighting, temperature and scenery in

order to shift into shopping mode and

start making decisions about buying.

Channelling customers

Location of anchor tenants

Location of stairs and escalators


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Getting lost

If you're feeling lost, it’s likely the centre hasn’t been designed with

what the experts call "intelligibility" in mind.

Intentional disorientation is thought to encourage deviation from a

plan – a theory known as the Gruen Transfer The premise is that ifpeople find themselves in a confusing “fantasyland” they’re going

to end up spending more money

Sight, sound and smell

Controlling the environment makes it easier to ensure it’s

conducive to shopping – a safe retreat free from outside confusion,weather, noise and smells. With few windows or clocks and a

regulated temperature in malls, shoppers can be lulled into a sense

of security and lose track of time.



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TENANTMIX

The planned shopping

centre or mall has become

an important part of

contemporary life style. It has

been changing patterns of

shopping as well as socialand recreational activities

No satisfactory suggestions

have been made for the

best strategy for tenant mix;

owners merely followedsome rules of thumb or their

own experience


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OPERATIONAL AND MANAGEMENTISSUES IN SHOPPING CENTRES

SAFETY AND SECURITY

Safety and security issues have become the

main concern for both shopping centre tenants

and consumers.

Shopping centre managers and management

teams must balance the need for their facilities

to be easily accessible public places with the

need to keep out the dangerous elements that

such places sometimes attract.

ISSUES IN MANAGING PROPERTY AND FACILITIES


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MECHANICAL AND ELECTRICAL EQUIPMENT

Energy use and installation of mechanical and

electrical equipment are also becoming a main

concern for shopping centre management.

It is important to ensure, therefore, that the

mechanical and electrical specifi cation is no

more or less than is required to provide a

comfortable environment for shopping centre

customers.



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CAR PARKING

Parking spaces are important to the car-borne

shopper, and essential to the success of the

scheme.

Typically, the main issues with regard to car-

park facilities are amount of parking spaces (in

correlation with NLA), safety and security.

Parking tariffs need to be considered carefully

and must be reasonable.



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WASTE

Shopping centre waste is varied, and is mostly

produced by retail businesses.

damaged or obsolete stock;

discarded packaging;

sewage and wasted



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ISSUES IN MANAGING TENANT MIX

Tenant mix refers to the combination of business

establishments occupying space in a shopping centre

to form an assemblage that produces optimum sales, rents, service to the community and financiability of

the shopping centre venture.

a good tenant mix is described as a variety of stores

that work together to enhance the centre ’ sperformance, and operate successfully as individual

businesses.


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ISSUES IN MANAGING TENANT MIX

DIFfiCULTY IN MAINTAINING A SUCCESSFUL TENANT MIX:

Heightened competition between centres, arising from their

proliferation and consumers greater mobility,

A difficult retail market, will result in falls in retailers space

needs and a reduction in landlords’ flexibility in managing

tenant mix.

Ever-changing demographics, fashion and consumer

demand, which lead to the decline of some older retailersand the brisk expansion of new ones, often with different

space requirements.


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WHICH TYPE OF RETAIL MOST AFFECTED?

Online competition increasespredictably as

online prices,

selection,

convenience,

customer trust

Here’s how three industries scored for

key drivers (1=low; 5=high).

between 30 and 35, digitalcapabilities are or will soon be a

strategic priority for your firm.

below 30, you should focus ondeveloping digital tools to build

traffic, enhance in-store experience,

improve

relative to

physicalstores


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FUTURE OF SHOPPING AND WHAT YOUCAN DO TO PREPARE

1. RETAILERS MUST ADOPT THE “FOUR PILLARS OF AMAZON

SUCCESS” TO THRIVE.

1. Be Customer Centric

2. Be Creative

3. Be Focused on Customer Experience

4. Continuously Improve & Optimize

2. DELIVERING PERSONALIZED EXPERIENCES WILL BE KEY.

3. THE DAYS OF ONE-SIZE-FITS-ALL CUSTOMER SERVICE ARE OVER.


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FUTURE OF SHOPPING AND WHAT YOUCAN DO TO PREPARE

4. USE TECHNOLOGY TO STRENGTHEN CUSTOMER RELATIONSHIPS

WHILE MAKING OPERATIONS EASIER

5. THE FUTURE OF RETAIL WILL BE TRANSPARENT, DYNAMIC, AND

SEAMLESS.

6. MAKE AUTHENTIC CONNECTIONS.

7. THE FUTURE OF RETAIL IS MOBILE.

8. GET BACK TO THE BASICS.


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TREND TO WATCH

1. MALLS ARE BECOMING “ALLS.”

2. THE ARTISANAL MOVEMENT WILL FLOURISH

3. APPAREL IN THE FUTURE WILL BE PERSONALIZED— AND TAILOREDTO OUR UNIQUE PROPORTIONS.

4. MOBILE RETAIL WILL HAVE TWO MEANS.

5. LOCATION-BASED TECHNOLOGY


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TREND TO WATCH

6. OMNI-CHANNEL RETAIL

7. TOP BRANDS NOW START ONLINE

8. LESS RETAIL, MORE LIFESTYLE AND ENTERTAINMENT SPACES

9. CONSUMERS ARE LOOKING FOR EXPERIENCES THAT GO WELLBEYOND TRADITIONAL SHOPPING


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Overvew of Shoping Centre Management

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