Professional Documents
Culture Documents
By Tuhin Chattopadhyay
FACILITY MANAGEMENT
Mall management companies outsource usually many operations to these companies like parking, security, housekeeping, and cash management. Facility Management handle electro mechanical services like fire detection and suppression, power management, access control, water management plumbing, etc. Besides this they also handle business services like guest relations, help desk management, and meeting room management. They also provide soft services like cleaning and pest control, physical and security surveillance, concierge services, and administration services.
FACILITY MANAGEMENT
There are a few other functions that facility management companies are also taking up. These include conducting research for malls to find out their requirements before actually starting to service them. The share of revenue depends on the number of services provided to all the malls in a facility management companys portfolio. It might sound ironical, but finding human resources is the main problem faced by facility management companies, the core business of which is providing manpower to their clients. One other problem that is faced by service providers is payment delays from their clients.
Mall Advertising
As the number of malls in the country is growing at a rapid pace and with it the number of people visiting these malls burgeoning, advertising and promotional activities in malls have become a hot opportunity. A creative agency takes care of all the aspects of advertising, starting from conceptualizing the advertisement to leasing out the space on behalf of their clients, to putting up hoardings or setting up kiosks or conducting events. Both outdoor advertising and BTL activities are revenue generators at the malls.
1. Developers
After the mall is built and the process of possession is over, the developer generally hands it over to mall and facility management team. In most cases facility manager is a third party and mall management/marketing team is a separate strategic business unit (SBU). This SBU should be considered as a separate entity so as to ensure that the developer doesn't behave like a landlord but as a place developer. In the long run, mall developer should be a client and the entity responsible for its management (unless a third party) should be an agency.
Expectation of Developer
The developer would expect at least little over nominal return on investment so as to earn profit and further invest in such projects. Better ROI would also mean that shareholders and investors in the company would be satisfied. He would want continuity of occupants. He would also want the project to enhance the company's brand image as mall business by nature has a snob value. This should subsequently help in making it easier for him to sell similar projects to brands/franchises/ bankers.
2. Investors
Investors are the people who have bought property in malls in bits and pieces. They should not be confused with equity partners or directors, but they are the people who bought small units during the built-up stage or later.
Expectation of Investors
Investors would look for better ROI than similar business with similar investment can offer with security and longevity. In other words, he would want confidence and peace of mind.
Expectation of Occupants
They would want ROI and more business than that generated from the nearest market, hasslefree shopping atmosphere, more footfalls at lower cost of marketing and adequate cost of rentals.
4. Customers
The end-consumers are the most important stakeholders as it is they who decide in many ways the future of others.
Expectation of customers
They would look for value for money, value for time spent (scope of good quality entertainment, food, etc), shopping with least effort (maximum brands), convenience of parking, better security, ambience, promos, impromptu events that are fresh and spring surprises also.
6. Other stakeholders
They are different in different malls but very important for variable income and mall marketing plan. They could be media partners (newspapers, TV, radio), airline partner, various event sponsors, outdoor advertisers, kiosk owners, etc. They are crucial to the success of the mall, financially and in providing the daily dose of freshness to the mall.
Quick Bytes
Mall Management includes mall positioning, zoning, tenant mix, promotions, facilities and finance management. Only a few malls in India follow revenue sharing, which is a common practice in developed markets. Traffic management is critical to the success of a mall. Right tenant mix attracts the focused buyer and right zoning attracts the impulsive buyer. Ambience management and high levels of hygiene are important to attract the family crowd.
Quick Bytes
All stakeholders have a great role to play in the success of a mall. The most important fact is that all stakeholders are dependent on each other for their individual success and for the success of the mall.
Remember that:
A Good Location
A Good Location
The future will belong to the concepts that put their hope into the synergetic combination of Entertainment, Experience, Commerce & Communication.
Malls need their own identity. It should not be only a conglomeration of different retail stores. Internationally, the focus is on theme concepts. These could be sports, religion, culture or even a special atmosphere like Mediterranean scenery. The main message is: Malls have developed into concepts with their own identity.
Shopping has to be a source of lust and excitement. The more diversified, alive and surprising a shopping mall is made to be, the greater the success will be. Mall architecture must reflect the aesthetic value: Beauty & Utility should go hand in hand.
Positioning a mall
The best international mall management practices include clear positioning of the mall (value, lifestyle, fashion, etc), backed by market research to understand the primary catchments needs and thereafter category mapping or defining the categories of services. Eva, the women's mall in Bangalore Gold Souk, a jewellery mall in Gurgaon Ishanya for interior products in Pune
A tenant strategy means building that portfolio of occupants that appeal to consumers, especially the increasingly large number of recreation oriented visitors who visit malls for family or social reasons, combining shopping with entertainment. This phenomenon is highly prevalent in our Asian cultures which give more importance to communal life, and have small living quarters. The tenant mix must reflect their needs and the portfolio must be re-evaluated at every lease expiry. If a tenant does not do as well as expected, or conversely expands too much, the company can be evicted or shifted at the end of the period.
Tenant strategy
An important aspect of tenant strategy that Indian developers must remember is that appealing to entertainment hunger through dedicated facilities such as arcades, cineplexs etc is risky without considerable study of the market. Because of high real estate prices, dedicating space to amusements is a larger financial risk than a totally retail-oriented area, though payoffs can be much greater.
Lease Amount
The lease amount is usually structured so as to reflect the space taken up and the crowd pulling capability of the tenant. Tenants taking up large spaces and able to attract large volume of visitors are approached first and in their role as anchor tenants are provided with substantial discounts on the base asking rates to entice them into taking up space .
Rentals
Rentals based on a percentage of store turn-over are common abroad, and are in fact preferred by many retailers as the mall management then has a stake in increasing the turn-over of tenants. It goes without saying that this arrangement depends on a high level of trust between retailer and developer , in addition the mall management company charges a royalty or service fee to cover the costs of managing the mall i.e., managerial personnel associated office expenses, as well as marketing costs such as newspaper, advertisements, promotions.
Food courts
Food courts should be strategically located in a manner that avoids noise but boosts visibility. The obvious intention behind such design strategy is to increase the number of footfalls (which may increase the number of conversions) in a shopping centre.
On only 10-12% of malls in India successful Success is measured not by just the rental revenues but by other factors like footfalls and conversions, the ticket size, the coherence and the longevity of the mall mix, the profile of the anchor tenants and the customer profile
On inadequate planning, improper zoning, poor tenant mix and accessibility are major drawbacks. The structure then does not deserve to be defined as a mall. If it is not planned it is just a shopping complex. A mall is a well defined conglomerate retail format where the space is leased out to the tenants and not sold out. There should be a floor plan well orchestrated for customer circulation with the right facilities in place. The mall mix should be profiled by the mall management team so that it not only becomes a destination for customers but becomes a place for shopping there repeatedly. The anchoring stores are very significant for any successful mall. The proof of the pudding is in the eating and likewise the proof of a successful mall is in its anchoring tenants.
Customers
Middle-class Indians are still hesitant about spending in malls because they think prices are higher in the mall. the percentage of visitors who turn into shoppers is as low as 10-15% in Indian malls
Neighbourhood Center
This center is designed to provide convenience shopping for the day to day needs of the consumers in the immediate neighbourhood. Half of these centers are anchored by a supermarket. E.g. Market No. 1, Market No. 2, Market No. 3 & Market No. 4 in Chittaranjan Park, New Delhi.
Community Center
Typically offers a wider range of apparel than the neighbourhood center does. Among the more common anchors are supermarkets, super drugstores and discount department stores. Community center tenants sometimes contain off-price retailers selling items like apparel, home improvement, toys etc.
Regional malls
A regional mall is, as per the International Council of Shopping Centers, in the United States, a shopping mall which is designed to service a larger area than a conventional shopping mall. It is typically larger with 4,00,000 square feet to 8,00,000 square feet. Offers a wider selection of stores. Given their wider service area, these malls tend to have higher-end stores that need a larger area in order for their services to be profitable. Regional malls are also found as tourist attractions in vacation areas. E.g. Shipra Mall at Indirapuram with 4.5 lakh sq.ft area
Super-regional malls
A super-regional mall is, as per the ICSC, in the U.S. a shopping mall with over 8,00,000 square feet of gross leasable area. Has more anchors & a deeper selection of merchandise. Draws from a larger population base. E.g. The Great India Place with 15,00,000-sq.ft. Select Citywalk with 13,00,000 ft
Fashion/Speciality Center
A center composed mainly of upscale apparel shops and boutiques. This centers usually are found in trade areas having high income levels. E.g. Khan Market is one of the more up market and expensive places to shop in Delhi. Some of the best-known brands, like Reebok, Nike, Benetton and Adidas, have their outlets in the Khan Market. it also has some of the best tailors in Delhi. Several shops have a range of excellent materials and will have a tailor on hand to make a suit, dress or shirt, usually within a period of one week.
Power Center
A center dominated by several large anchors, including discount department stores, off-price stores, warehouse clubs and category killers. A shopping site with: (a) up to a half-dozen or so category killer stores and a mix of smaller stores, or (b) several complementary stores specializing in a product category. E.g. Palika Bazaar, Connaught Place Cheap garments and electronic commodities are available. Karol Bagh offers Indian garments and shoes.
Theme/Festival Center
These centers typically employ a unifying theme that is carried out by the individual shops in their architectural design and to an extent in their merchandise. The theme for Surajkund Mela 2008 is West Bengal. Teej fair, Diwali fair at Delhi Haat.
Outlet malls
An outlet mall (or outlet centre) is a type of shopping mall in which manufacturers sell their products directly to the public through their own stores. Other stores in outlet malls are operated by retailers selling returned goods and discontinued products, often at heavily reduced prices. E.g. Ansal Plaza (Factory Outlet Mall), Vaishali, Ghaziabad.
Tenant Mix
A planned center should aim to create an optimal combination of tenants that will maximize center turnover and retailer profits and therefore total net rentals. The retail tenant mix will normally include one or more anchor tenants, a variety of mall stores and food court operators. Each category of retail tenant has a role to play in creating the center's micro retailing climate.
At the foundation are anchors that attract a base number of consumers to the center. Food court operators can create another function for the retail destination, as well as capitalizing on the high pedestrian traffic flows in the focus of a center. Mall stores cover all of the other shopping needs of the consumer, so as to economize consumers time cost of shopping.
(2) non-anchor tenants The anchor tenants create a draw card for the center and the non-anchor tenants benefit from locating near the anchor. The anchor tenant is affected only by the amount of space it leases and not by the space allocated to non-anchors. Non-anchors however are affected by the amount of space they lease and the space let to the anchor
It is typically observed that anchor tenants have far lower rentals per square meter than mall stores and food court operators.
So why doesn't the landlord allocate all space to mall stores and food court operators?
The price of the mall store and food court space depends on the space allocated to an anchor. If there is no anchor the sales these retail tenants would achieve, and therefore the rent they could afford, will move toward zero. This will cause total rental to be less than the optimal.
Brueckner (1993) has produced a general shopping center space allocation model that does not differentiate between anchors and nonanchors, but between all retail tenant types. Retail tenants are defined according to their retail demand externality generating abilities. The starting point for Brueckner's model is that centers contain a variety of shops to lure consumers because of the time economizing quality of shopping at one destination. If another type of retailer enters a center, this increases the likelihood that any given shopping trip can be executed in a time-cost saving manner by visiting the center
As some additional consumers will patronize other stores during their visits, the existing retail tenants receive what Brueckner terms an "externality" from the new type of store locating in the center. Retail tenant types differ in their externality generating ability. For example, a mall store selling goods that are not on many shopping lists would generate few externalities, while a department store that carries many goods on the average shopping list generates many.
Brueckner extends this rationale and formally shows that the rental for any retailer is dependent on the sales volume per square foot the retailer achieves, and also on the sales that other tenants generating externalities achieve. The implication of Brueckner's theoretical work is that landlords must optimize interretailer externalities to maximize center total rents.
The conclusions from Brueckner's model also appear to be consistent with observed behavior. For example, jewelry stores and lottery stores are typically identified as high rental payers. The landlord does not allocate all the mall store parades to jewelers and lottery stores because the price of these retail tenants depends on their sales per square meter and the externalities generated by other mall store tenant types. Allocation of all the space to jewelry and lottery stores is likely to cause externalities to be suboptimal, as in most cases shoppers will not want only these two store types.
Size of store is consistently found to be the most significant determinant of base rentals per square meter. Rent per square meter decreases as size increases. Rent per square meter decreases as sales per square meter decreases. Anchor stores have the largest size and the lowest sales and rent per square meter.
Empirical studies have confirmed the important negative relationship between size and base rents and the positive relationship between sales and base rents.
A major retail tenant of a shopping center has a lot of bargaining power. So much so sometimes that it has the power to change the tenant mix in a way which is detrimental to the entire center. The owner of the center sometimes has to make an unpleasant choice to give the tenant the flexibility it seeks and put the viability of the center at risk or deny the tenant its desires and risk losing the tenant.
1. The first is to permit the tenant the widest use of its space but prohibit it from changing the use of that space to the then principal use of another tenant of the center (through change in business of the tenant or through assignment or subletting). Thus, for example, if the major tenant of the shopping center is a clothing store and the center later adds a florist, the lease will prohibit the clothing store from converting either itself or its space into a flower shop. This is particularly important if the size or location of the center is such that the center will be unable to support two businesses in direct competition and has two beneficial effects. It maintains tenant balance in the center while simultaneously giving some flexibility to the powerful tenant by allowing it to use some or all of its space for a business which, while present in the center, is an ancillary, rather than a principal, business of another tenant.
2. Another frequently employed technique is to permit the main tenant to use the space for one or more specific purposes (these being the purposes for which the tenant intends to use the space at the time of execution of the lease) and provide that the tenant may not use the space for any of a list of prohibited purposes, one of which is the principal use of another tenant. This limits both the use to which the original tenant may affirmatively put the property (that is, if a florist shop or a clothing store is permitted and a music store is not, the tenant may not open a music store even if it would otherwise be permissible) while simultaneously restricting uses which would be deleterious to the continued good health of the center.
3. The third common technique is to give the original tenant the broadest possible use of its own retail space, but restrict the purposes for which the original tenant may assign the lease or sublet the premises. These strategies should not be applied without careful consideration of the needs both of the tenant and the shopping center.
A successful RTM increases patronage of a centre, boosts retail profits and the rent paid to the landlord/investor owning the centre. Understanding effective RTM is therefore important to investors in managed shopping centres, their property agents and retailers. In a managed centre RTM results from the landlord's letting strategy, tempered by retailers' micro-location decisions. As a centre matures, its tenant mix develops in response to changing retail fashions and the landlord manages this process to maximise his investment returns, using lease terms and duration.
Mall Architecture
Architecture is fashion
As our lifestyles change, our environments change, mall architecture changes.
In architecture, a term used to refer to the front exterior of a building. Also, other exterior sides when they are emphasized. In its most general sense, a facade is an elevation of a building: what you see when standing before one side of the building. Under this usage, a house may have two or more facades: a front facade facing the street, a garden facade facing the back yard, etc. The front facade or principal elevation of a building is sometimes referred to as "the facade."
Facade
Merry-Go-Round in Mall
Atrium
An atrium is a large space in a building open to the ceiling. An atrium usually has a glass ceiling or many windows to let in a lot of light. In classical architecture, an interior courtyard that is open to the weather. In contemporary architecture, a significant interior space, often skylighted, used for circulation. In the Roman period this was the inner courtyard of a house, left open to the sky, and generally built by the affluent urbam classes. In the 20th century the word has been adopted to describe dramatic enclosed glass-roofed indoor spaces associated with high-rise hotels and office buildings that are treated as substitutes for the public realm. An entrance hall of a building, often rising through a number of storeys and containing lifts, reception areas and plants. Originally the hall or chief apartment of a Roman house.
Atrium in a mall
Atrium
Ceiling Of A Mall
Mall Layout
During 80s,
Customer started demanding Better designed environment to shop Recreational opportunities such as: Cinemas, Cafes, Lifestyle retail & Entertainment in various forms.
The gross area inside the Mall of America is 4.2 million square feet; however, only 2.5 million square feet are available as retail space on four levels which are arranged in a roughly symmetrical rectangle. The four sides to the rectangle contain roughly 520 stores on three levels, and each side has its own distinct style in terms of decor. There are also two large food courts in the mall, one on each of the north and south sides third levels. They built two gigantic identical seven-level parking structures on the east and west sides of the mall,
Each level in the parking structures is named after a state, to fit with the whole America theme. Also, despite being in one of the coldest parts of the country, the Mall of America is not heated. Instead, the giant structure is heated by patrons, employees, and the greenhouse effect during the day because the roof is made up of transparent windows, which also provide natural light to the Amusement Park during the day. In fact, air conditioning needs to be run at all times to maintain a comfortable climate within the mall, even during January.
The first two levels of the mall are typical of any super-regional mall, with many national retailers; however, the third and fourth levels at the Mall of America are a bit different. The food courts occupy most of the third level along the north and south corridor, but there are also many sit-down restaurants like California Cafe and Famous Daves on this level. Comprising the rest of the third level on the east and west sides there are many seemingly local stores. It seems the third level is undesirable for many competitive national retailers, save for some junior anchor holdouts. The fourth level, which only exists on the east and north sides of the mall, opened with an allencompassing entertainment theme, and was comprised of several adult-themed night clubs and a 14-screen AMC Movie Theater.
The Atrium
In the past
The mall used to hold National American University college classes at the mall for many years. Presently, it has An underwater aquarium An alternative High School An amusement Park
A Sit-down Restaurant
Future Plans:
6,000 seat music theatre, New hotel, Water park etc.
Conclusion
However, better architectural design not necessarily ensures successful shopping centers. Conversely, shopping centers which are architecturally challenged may also be successful.