Get With The Strength

I consult to the big shopping centre brands. I also consult to majors, mini-majors, big box and specialty retailers. I am exposed to all aspects of retail and I examine retail all over the world in the work and research that I undertake. That gives me a pretty unique view. As a retail “scientist” so to speak, I can dispassionately and in an unbiased fashion examine all the competing facets of the retail mix and how to make it work better for each of my clients.

Understanding is the most critical element to improving performance.

From what I have observed in more than 25 years of working with retailers, there is a widespread lack of genuine understanding of what makes the great shopping centre brands so strong.

First and foremost these businesses, at their heart, are really about property development – they are not retailers. Their job is to develop high value real estate assets, that produce trading cash-flows capable of justifying increasing asset re-valuations. They raise capital to improve an asset based on the increasing returns they can achieve over time.

There are huge barriers to entry because of the nature of population growth. Very few “greenfields” shopping centre opportunities emerge today and the ones that do are in new communities that will take 10 to 15 years to mature. The big “now” opportunities are in re-development of existing sites or “brownfields” conversion of existing properties in high-density areas. This means, if you own the assets already you’re in the best position and you’ll be working through a process of how to improve those assets to get a greater return out of them.

What that actually means is that the good shopping centres just keep getting bigger and better. However, to make that happen the best of breed shopping centre brands have become the consummate aggregators of a complex array of skills and world class jugglers of the competing needs of a diverse group of stakeholders – expertise that would make the United Nations gasp in awe.

While the ultimate judge of the performance of a shopping centre asset is the shoppers wallet or purse, the great shopping centre brands must convince governments, staff, development partners, retail tenants, community groups, investors, financiers, co-owners, suppliers, advisers and a myriad of other stakeholders to work together to make improvement of returns a reality.

Globally, shopping patterns are narrowing and becoming habitual. Closed roof shopping centres are providing year round climate control that shoppers are increasingly depending on. Shopping centre foot-traffic globally is on the rise in the successful centres.

Making shopping centres as productive as they can be is a complex task that requires trade-offs across a wide group of competing interests. A trade-off that the best operators do very well as they continue to attract capital to invest in upgrades and to attract shoppers to spend more as a result of a better product and service offering.

Making a shopping centre work productively for you is up to your business strategy.