Malls need to move beyond shopping to survive online onslaught

Share
Reuters
Malaya Business Insight
19 March 2013
Malaya Business News Online - Philippine Business News | Online News PhilippinesCANNES, France – As growing numbers of shoppers move online, European mall owners are looking to pull in customers by including services that can’t be replicated on the Web like hospital care and government offices.

Malls must become more like full-service community centers to survive in the face of a growing list of failed retailers like HMV and Blockbuster, property experts at the annual MIPIM trade fair in Cannes, France, told Reuters.

On the flip side of that retail revolution, the experts see big gains in warehousing as more goods are sent and returned via post.

“The days of the stand-alone mall are numbered,” said David Roberts, the chief executive of architect Aedas, one of the five largest practices in the world. The company has been involved in city masterplan projects in Asia, Europe and the Middle East.

“In 20 years time you will find stores that sell books and DVDs replaced by sites that give people a reason to go the mall … art galleries, education centers and health and spa treatments.”

Florencio Beccar, fund manager of CBRE Global Investors European shopping centre fund, cited the recent purchase of a mall in Germany, saying the fact it included a large medical centre was “a big plus”.

“I once saw a clinic in a Brazilian mall where you checked in and are buzzed on a device when they are ready. In the meantime you go shopping,” he said. “With the ageing population in Europe you can see that happening more and more.”

CBRE Investors, which has about 14 billion euros ($18.2 billion) of retail property under management in Europe and 5,000 tenants, also owns a mall in southern Sweden with a library and a local municipal office, he said.

“More shopping centre developers will have early talks with these sorts of tenants as well as the big anchor retailers,” Beccar said.

Mall owners like Land Securities, Intu, Westfield and Klepierre have increased the number of restaurants and cinemas to persuade shoppers to stay longer, and offer promotions to reward frequent shoppers who can be tracked via their mobile phones.

COMMUNITY CENTRES, ADVENTURE PARKS

But these steps don’t go far enough, some experts say, in light of a forecast last month that 90 percent of retail sales growth in Britain, France and Germany between 2012 and 2016, or 91.5 billion euros, is expected to be online, according to the property arm of French insurer AXA, which manages 43 billion euros of assets.

As well as changing what’s inside, mall owners will need to borrow ideas from developing markets like Dubai and China where centers are part of wider mixed-use developments where people live or include open spaces where they spend leisure time, Roberts said.

“Convenience and Internet shopping has created a breakdown in community structures and there’s a gap there waiting to be filled,” he said.

“There is a complete lack of vision among many shopping centre owners,” said Joe Valente, a managing director at JP Morgan Asset Management, who helps manage 7 billion euros of real estate in Europe.

“The big thing that’s missing is that unlike almost every other industry they haven’t caught on to building their own brand. Why not have a bluewater.com?” he said, referring to the large mall of the same name in southeast England.

“Landlords fear cannibalizing sales but in 10 to 15 years they won’t have a choice because they will be cannibalized anyway,” he said. In other words, a growing number of shoppers will move online whatever malls do.

“On a mall website you could book a parking space, a restaurant table or your car to be valeted. Why do people go to Covent Garden?” he asked of the central London district.

“There’s nothing there you won’t find anywhere else but I would argue it’s a strong brand.”

Christian Ulbrich, chief executive for Europe, Middle East and Africa at property consultant Jones Lang LaSalle, said: “Stores will get bigger and become more like adventure parks that attack all of your emotions.

“For example, Globetrotter has a climbing wall and cycle track in its Frankfurt store to try out its products,” he said of the German outdoor clothing and equipment retailer.

WAREHOUSING

While retailers and mall owners struggle to find answers, all agree that warehouse property owners are the big beneficiaries of the change in retail habits.

Every additional 1 billion euros of online sales resulted in an average additional warehouse demand of approximately 72,000 square meters in Britain, Germany and France over the last five years, a report from warehouse landlord Prologis said last year.

“Logistics is the new retail,” said Simon Hope, global head of capital markets at property consultant Savills, referring to the way changing consumer trends will affect the way investors see property.

Regent Parkway

To all the administrative, security and management personnel at Regent Parkway:

I’d like to take this opportunity to THANK YOU sincerely for all your hard work.Every day we come home to clean, well maintained and safe building, and it is thanks to the contributions of each and every one of you.

I’ve had the pleasure to be a tenant of this building for the last couple of years, and I have never, ever had a single problem, not ever one. Everything is managed with the utter most professionalism, and many times we take that for granted. I know that it doesn’t happen by magic, but because of the effort from each and every one of you.

Unfortunately, I am being relocated to my home country, reason for which I will stop living here by the end of the month. Believe me, if it was up to me, I would never leave; since my stay here has been very happy and fulfilling.

I’ve had the opportunity to live in many places, but the upkeep and operation in this building, together with the warmth from every member of the personnel, are unparalleled.

I didn’t want to leave without sharing with you my appreciation for all you have done for me; your friendly smiles, the cheering in the early mornings when I drag myself up for a run, making me feel safe and taken care of, but mostly, for taking an otherwise ordinary job and making something extraordinary out of it.

I wish you all the best and thanks again.

For inquiries, fill up the form below.

Name

Email Address

Subject

Message

For inquiries, fill up the form below.

Name

Email Address

Subject

Message

For inquiries, fill up the form below.

Name

Email Address

Subject

Message

We would like to hear from you on how we can serve you better. Please fill out the form below and we will get back to you as soon as we can.

Name

Email Address

Subject

Message

Captcha

CAPTCHA code

Share