These are competitive times and the way shopping centres are mushrooming, the future looks fierce! So, what’s there round the corner for shopping centres? A perpetual war of prices, prime spaces and footfall? Maybe; however, diversification may help.
First of all, let’s get some things straight. No shopping centre can focus on all types of customers; they must specialize and diversify. Big cities hold more promise for diversification as there is more space. Diversification can at least eliminate competition in terms of footfall to some extent. If advanced markets are studied, a trend towards diversification of shopping centres is already evident. Though diversification usually takes several years, the future of shopping centres would be more promising if they are clear on their goal of diversification.
Amit Puri, the General Manager of Leasing for McARTHUR + COMPANY adds, “Diversification is possible in terms of the tenant mix and the range of products offered to a specific catchment, and most important of all, this message should be communicated clearly to the customers through proper info channels and marketing collaterals within and without the shopping centre.”
The current market is saturated and does not need new but rather more clearly focused yet diversified shopping centres. This is where McARTHUR + COMPANY comes in. The creation of shopping centres that generate strong returns for investors and profitable businesses for retailers is at the heart of the McARTHUR + COMPANY’s approach to shopping centre and mixed-use development, leasing and operations advisory.
In addition, for continual survival and to maintain interest, shopping centres must understand their customers and offer – and adapt where necessary – product and services accordingly. In geographical areas or cities where identical or similar structure of tenants is existant, diversification makes a big difference. However, it is not just distinguishing oneself from the competition, providing the extra edge also leads to a specific catchment area.
Though some shopping centres take it upon themselves to find ways of diversification and differentiation from the competition, some rely on shopping centre specialists.
The cost of diversification is not usually an issue with large centres and big cities. Centres with a high footfall of foreign clientele with high purchasing power are a good example. Advanced markets also find diversification a clear-cut and simple way to attract higher footfall.
These and several other relevant issues are taken care of by the experienced team of experts at shopping centre specialists in the most practical and economical ways.
There is an experienced team of experts at McARTHUR + COMPANY, including its Founder and Managing Director, Phil McArthur, who is an internationally experienced shopping centre specialist with over 35 years in the industry across Asia, the Middle East, Africa and North America.
Furqan Athar, Partner and Director of Strategy and Planning at McARTHUR + COMPANY is also an award-winning Dubai-based retailer and shopping centre investment expert having accumulated over 20 years’ experience in the Middle East’s retail real estate industry.
Amit Puri describes that their strategy in the face of competition “… is to add real financial value to each retail development project. Our team is well-experienced in shopping centre investment, finance, development planning, marketing, as well as retail leasing and management.
“We believe in well-planned, highly popular shopping destinations with long-term financial growth in value. Our philosophy is to use international best practices combined with local knowledge of retail markets and shopping influences to meet each project’s goal.
“We understand retail real estate and shopping centres and what it takes to achieve successful new centres or reinvigorate centres that require new energy. We work closely with global retail chains and large regional groups to assist with their cross-border expansion needs.”
Evaluating the role of other factors, a real differentiator of shopping centres from other types of properties is their dynamism. Effective management through a dedicated team of shopping centre specialists is the only key to smooth and successful functioning.
Strategies may differ: redeveloping a retail centre, expanding to meet the growing demand in response to changing needs and retail trends, or applying sound leasing strategy, without shopping centre specialists it’s difficult to sail through.
Yet other factors that play a major part in the success of any shopping centre include the knowledge, experience, analytical ability, planning and execution in terms of tenancy mix, effective leasing and coordination of occupancy. To discuss a few in detail:
Shopping Centre Management:
Attention to detail and an ability to provide informed and pro-active service to customers with continuous improvement in delivery leads to greater productivity and performance. A balanced strategy helps in maximum returns on investment and minimum risk and cost.
Further, Centre Managers are concerned with the safety of their property, proper services, maintenance of buildings and timely repairs, and above all the Centre should register itself as an inviting destination for shoppers.
This helps in retaining tenants, which is an important strategy in the successful operations of a shopping centre.
Creating a flexible balance in lease terms and conditions against investment performance and mutually beneficial outcomes for both the lessor and lessee is another significant strategy.
Specialists work on all fronts including retail leasing, and rich experience and a long list of contacts may come handy. The end goal is to create a fabulous shopping experience for the customers, and both national and international retailers contribute in that special experience. The productive and profitable Centre is a logical outcome. Re-leasing vacant properties in optimum time keeps that trust and confidence of customers and retailers alike.
Independent and shopping centre properties are distinctly different, and therefore marketing elements play a major part in attracting customers.
Generally a strategic programme, to develop progressive shopping centres keeping in mind effective and cost-efficient solutions, unique to each shopping centre is created by the specialist marketing team. It should take care of the investment type and expected returns by the owners.
The expert opinions on local knowledge, needs and integration are important. Almost all the times, shopping centre specialists have the last say in creating that confidence among the investors.
So, is diversification really the answer?
Focusing on just one group these days doesn’t help. Young and old have different interests and purchasing habits. Customers can be likewise divided into several different types of segments. So, shopping centres must target partially wider and partially overlapping segments of customers. However, diversification is not the only answer. There are several factors that play a role in successful shopping centre projects.