Shopping centers and commercial complexes are on the agendas of real estate investors across the Middle East. The phenomenal contribution of malls to tourism and retail growth in metropolises such as Dubai and Beirut has led capital to fund the ambitions of even second-tier cities to grow shopping centers in size, sophistication and number.
Advisors to the retail industry see demand for shopping mall concepts come from the Gulf region and as far afield as the Congo. As locally the regional sector evolves to the standards of a highly competitive global retail industry, private and public investors will need to understand the industry and its drivers if they want to succeed in creating shopping destinations.
A successful retail destination requires a well-articulated vision supported by a sound business plan that incorporates shopping center development.
A good retail design should maintain a balance between commercial and civic concerns while taking into consideration the socio- and macro-economic environment. The design should create an environment that enhances the shopping experience, addresses community aspirations and meets the landlord’s objectives.
Balancing retailer demands…
A retail destination’s success depends on established relationships with global brands and an understanding of their strategic objectives and requirements, together with an understanding of the needs of tenants and customers. For example, some international brands, especially ‘anchor’ or ‘flagship’ stores, have pre-set design and technical requirements, such as specific locations and adjacency with other brands or a specific unit size with a defined shape and area for their concepts, not forgetting the technical requirements on mechanical, electrical and plumbing provisions.
Incorporating these specifications into the project ahead of time is critical to ensure that targeted brands and anchors are attracted to the mall. Shop front sizes and ceiling heights are also prerequisites on which brands will not compromise.
Ongoing technical assistance through the development cycle is a major contributor to asset value creation for landlords. Shopping center specialists ensure that projects are implemented as planned and that any changes to specifications, provisions, mix and tenants are properly assessed ahead of time and the impact on the retail development quantified. The objective of such work is also to ensure that the operation of the mall is smooth and cost effective and that the value of the property increases annually.
… And customer desires
Customers want to be able to choose from a variety of products in each merchandise category. This can be achieved especially at large shopping centers, where ‘area clustering’ creates a distinct destination for each customer need, be it neighborhood services, fashion or food and beverage. A shopping center should be a one-stop-shop destination, as convenience is one of the main attractions of a mall.
Developers sometimes overlook details such as access and circulation. A good parking and a well-designed navigation system are a must for a comfortable and enjoyable shopping experience. Traffic management does not stop in the parking lot, however, as shoppers in the mall need organic pathways of circulation. If not properly sized, passageways can create bottlenecks and congestion that affect the entire area of a mall, potentially turning it into a ‘deserted’ space.
A mall’s interior design program must also develop a balanced retail mix and merchandise plan and include backroom areas, which are not available for customer access.
Public spaces should offer a comfortable and inviting environment. This is where the quality of the finishes in the common areas, the nature of the meeting points and piazzas, the technical provisions, the lighting and the like should be carefully considered.
Landlord and tenants will look for footfall generators such as flagship stores, exclusive brands, cinemas and hypermarkets, each with its own selling proposition, as well as a balanced and interesting mix of activities and brands, in line with the project positioning, which is based on identification and assessment of the projects’ catchment areas.
These elements encourage customers to return to the mall and increase the length of their stays.
Claudia Kassab Tarazi is the managing director and founding partner of Retail Consulting Group, which specializes in shopping center development.