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by: Andreas Kartawinata

Retail Property Management Jakarta, Indonesia
2016

SHOPPING CENTER EVOLUTION

At the beginning : wet market & shop houses

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SHOPPING CENTER EVOLUTION

At the beginning : wet market & shop houses

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WHAT IS A SHOPPING CENTRE?

a shopping centre can be
dened as a building that
contains many units of shops but
is managed as a single property
ICSC(2004):

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a shopping centre as a group of

retail and other commercial
establishments that is planned,
developed, owned and
managed as a single property,
with on-site parking provided

ICSC DEFINITIONS
According to the International Council of Shopping Centres
(2004) , the basic design con gurations of shopping centres
are as follows :
MALL

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The most common design mode for regional and superregional centres is often referred to as a shopping mall .
The walkway or mall is typically enclosed, climatecontrolled and lighted, anked on one or both sides by
storefronts and entrances. On-site parking, usually provided
around the perimeter of the centre, may be surface or
structured.

ICSC DEFINITIONS
OPEN-AIR CENTRE
An attached row of stores or service outlets managed as a
unit, with onsite parking usually located in front of the stores,
with common areas that are not enclosed, is often referred to
as an open-air centre .

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Open canopies may connect the storefronts, but an open-air

centre does not have enclosed walkways linking the stores.
Historically, the open-air con guration has been referred to
as a strip centre , although the strip centre got its name
from the linear form, where stores sit side by side in a long and
narrow row of stores.

ICSC DEFINITIONS
HYBRID CENTRE
This is a centre that combines elements from two or more of
the main shopping centre types.

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Common hybrids include value-oriented megamalls

(combining mall, power centre and outlet elements), powerlifestyle centres (combining power centre and lifestyle centre
elements) and entertainment-retail centres (combining retail
uses with megaplex movie theatres, theme restaurants and
other entertainment uses).

WHAT IS A SHOPPING CENTRE?

Delisle (2007) shows that over the years, shopping centre formats
have taken on a confusing array of identities, with names that
include such descriptors as

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mega-malls,

strips,

commons,

mixed-use,

squares,

crossings,

outlets,

super centres,

hybrids,

parkways,

town centres,

lifestyle centres,

places,

urban retail,

malls,

plazas,

junction

markets,

promenades,

villages.

marts,

shops,

etc, etc

centres,

ICSC DEFINITIONS

Asia-Pacific Shopping Centre

Classification Standard

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1. GENERAL PURPOSE CENTER

ICSC DEFINITIONS

Asia-Pacific Shopping
Centre Classification
Standard

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1. GENERAL PURPOSE CENTER

ICSC DEFINITIONS

Asia-Pacific Shopping
Centre Classification
Standard

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2. SPECIAL PURPOSE CENTER

ICSC DEFINITIONS

Asia-Pacific Shopping
Centre Classification
Standard

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2. SPECIAL PURPOSE CENTER

ICSC DEFINITIONS

Asia-Pacific Shopping
Centre Classification
Standard

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3. OTHER MAJOR RETAIL

REAL ESTATE

ICSC DEFINITIONS

AREA OF MEASUREMENT
The area of measurement for classifying shopping centres
is Retail NLA.

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The NLA of a shopping centre is typically 55%-65% of the

total Gross Floor Area, but this can vary across
geographies and centre types.

ICSC DEFINITIONS
RETAIL NET LEASABLE AREA (NLA):
The measurement of the internal floorspace of a retail unit that
can be used for selling and displaying goods and services. It is
measured from the inside face ofthe shop walls, excluding any
protrusion from the wall.

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Retail NLA excludes non-shopfront office, hotel, residential and

other non-retail uses.
Typically the measure:
includes the area taken by internal columns within a tenancy;
includes storage connected to a tenancy; and
excludes other unusable space such as a shared riser.

ICSC DEFINITIONS
Tenants are defined based on their size, as outlined in the table
below.

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ICSC DEFINITIONS
Within these shopping centre definitions, the following tenant
category definitions are used:

Food & Groceries: includes delicatessens, fruits &

vegetables, butcher, poultry, fresh seafood,
bakery/cakes/pastries, other specialty food and liquor.

F&B (Food & Beverage): includes takeaway food,food

courts (including common area seating), cafes and fullservice restaurants.

Entertainment: includes cinemas, gaming/gambling

venues, family entertainment centres, video game
parlours, bars/pubs/taverns, bowling alley, ice-skating,
internal theme park, Karaoke.

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ICSC DEFINITIONS

ANCHOR TENANT DESCRIPTIONS

DEPARTMENT STORE:
A retail tenant of greater than 50,000 sq. ft. that provides a
wide range of goods (e.g. apparel, cosmetics, homewares)
segmented into departments. While a department store may
carry a range of different brands, it will be leased to a single
leasee who may then sublease space.

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Would typically have less than 20% of NLA dedicated to

food & groceries or F&B.
The focus of a department store is typically higher-order
retailing (e.g., fashion, accessories, homewares), with less of
a focus on day-to-day convenience shopping.

ICSC DEFINITIONS

ANCHOR TENANT DESCRIPTIONS

DISCOUNT DEPARTMENT STORE:

A definition largely used in Australia, describing one of Kmart,
Target or Big-W. These are small department stores (typically
500,000 10,000 sq. ft.) with a discount price point.

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GMS (GENERAL MERCHANDISE STORE):

Mostly used in Japan and Korea, a General Merchandise

Store is in many ways similar to a hypermarket. In Japan it is
defined as having no less than 10% and no more than 70% of
sales from any of apparel, food or household goods, and
being over 30,000 sq. ft.

ICSC DEFINITIONS

ANCHOR TENANT DESCRIPTIONS

HYPERMARKET:
A tenant of greater than 50,000 sq. ft. that provides a wide
range of goods segmented into departments, with a heavy
focus on food and groceries.

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At least 20% of floorspace or NLA would be dedicated to food &

groceries.
The focus of a hypermarket is typically on lower-order retailing,
concentrating on day-to-day shopping needs.
SUPERMARKET:
A tenant of between 10,000 and 50,000 sq. ft., of which 80% of
floorspace or NLA is dedicated to a wide range of food &
groceries.

THE ROLE OF SHOPPING CENTRE

SHOPPING CENTRES AS PLACES OF BUSINESS
Shopping centres have been developed to provide
a business place that includes retail spaces, facilities
and services to the retailers.

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As a business place, the location factor is very

important. This is because the location factor is
typically what rst attracts successful retailers.
Aside from a good location, accessibility also creates
the desire to visit and shop at shopping centres.

THE ROLE OF SHOPPING CENTRE

SHOPPING CENTRE AS A PROPERTY
A shopping centre as a property is seen as a building
that contains physical structures, spaces and
facilities, and is managed as a single property.

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As a property, it needs to be managed and

maintained to ensure that its value is increased.
The excellence of performance or the worth of a
shopping centre is generally assessed in terms of its
value in the property market

THE ROLE OF SHOPPING CENTRE

SHOPPING CENTRE AS AN INVESTMENT
Shopping centres have been built by developers,
often managed by the same or specialised
organisations, and have been sold to the institutional
investment community.

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Historically, the ownership of most shopping centres

has traditionally passed to pension funds and
insurance companies.
The aim of the owners is typically to secure a future
stream of income in return for their capital
investment.

THE ROLE OF SHOPPING CENTRE

SHOPPING CENTRE AS AN INVESTMENT
Shopping centres have been built by developers,
often managed by the same or specialised
organisations, and have been sold to the institutional
investment community.

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Historically, the ownership of most shopping centres

has traditionally passed to pension funds and
insurance companies.
The aim of the owners is typically to secure a future
stream of income in return for their capital
investment.

THE ROLE OF SHOPPING CENTRE

SHOPPING CENTRE AS AN INVESTMENT
Shopping centres have been built by developers,
often managed by the same or specialised
organisations, and have been sold to the institutional
investment community.

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Historically, the ownership of most shopping centres

has traditionally passed to pension funds and
insurance companies.
The aim of the owners is typically to secure a future
stream of income in return for their capital
investment.

THE ESTABLISHMENT OF MANAGEMENT

SYSTEMS IN SHOPPING CENTRES

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KEY SUCCESS FACTOR OF

A SHOPPING CENTRE
1. Location, location, location
Right Location, Visibility, Accessibility
2. Management
1. Promotion and Event
2. Customer and Tenant Relation
3. Cleanliness and Security
3. Design
1. Parking Spaces
2. Homey Place
3. Lighting and Ambience
4. Layout and Tenant Mix

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STRATEGIC SHOPPING CENTRE LAYOUT

A shopping centre cant hold you
against your will, but it can be
designed to make you stay longer
than you intended.

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Tricky architecture and subconscious

marketing can slow you down and,
theoretically, keep you shopping. The
idea being, the longer you linger, the
more impulse buying youll do.

STRATEGIC SHOPPING CENTRE LAYOUT

What experts say
At the mall, the plan is to maximise unplanned
purchases to get people to stay longer and
deviate from their plans, says Charles Areni,
professor of marketing at Macquarie Graduate
School of Management.

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Not all researchers believe mall designers are

manipulative. But media analyst Douglas
Rushkoff argues a number of strategies are
being used to create environments that
encourage consumers to spend up big. The
idea is to disorient the shopper and soften
them up for manipulation.

STRATEGIC SHOPPING CENTRE LAYOUT

The decompression zone
shoppers need a three- to five-metre
buffer zone to adjust to the changes in
lighting, temperature and scenery in
order to shift into shopping mode and
start making decisions about buying.

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Channelling customers
Location of anchor tenants
Location of stairs and escalators

STRATEGIC SHOPPING CENTRE LAYOUT

Getting lost
If you're feeling lost, its likely the centre hasnt been designed with
what the experts call "intelligibility" in mind.

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Intentional disorientation is thought to encourage deviation from a

plan a theory known as the Gruen Transfer The premise is that if
people find themselves in a confusing fantasyland theyre going
to end up spending more money
Sight, sound and smell
Controlling the environment makes it easier to ensure its
conducive to shopping a safe retreat free from outside confusion,
weather, noise and smells. With few windows or clocks and a
regulated temperature in malls, shoppers can be lulled into a sense
of security and lose track of time.

TENANT MIX
The planned shopping
centre or mall has become
an important part of
contemporary life style. It has
been changing patterns of
shopping as well as social
and recreational activities

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No satisfactory suggestions
have been made for the
best strategy for tenant mix;
owners merely followed
some rules of thumb or their
own experience

TENANT MIX
A good tenant mix includes a variety of
compatible (or complementary) retail/service
providers, and an efficient space allocation (both
size and number) and proper tenant placement
that encourages the interchange of customers
and retail activities. In a wider perspective, it
should also include sufficient public facilities and
services, both in terms of the quality and quantity
demanded. The essentials that enhance the
quality of the centres shopping environment, to
satisfy shoppers needs, such as goods and
services, convenience, excitement, and
amenities, are all part of the elements of an ideal
tenant mix.

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OPERATIONAL AND MANAGEMENT

ISSUES IN SHOPPING CENTRES
ISSUES IN MANAGING PROPERTY AND FACILITIES
SAFETY AND SECURITY

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Safety and security issues have become the

main concern for both shopping centre tenants
and consumers.
Shopping centre managers and management
teams must balance the need for their facilities
to be easily accessible public places with the
need to keep out the dangerous elements that
such places sometimes attract.

OPERATIONAL AND MANAGEMENT

ISSUES IN SHOPPING CENTRES
ISSUES IN MANAGING PROPERTY AND FACILITIES
MECHANICAL AND ELECTRICAL EQUIPMENT

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Energy use and installation of mechanical and

electrical equipment are also becoming a main
concern for shopping centre management.
It is important to ensure, therefore, that the
mechanical and electrical speci cation is no
more or less than is required to provide a
comfortable environment for shopping centre
customers.

OPERATIONAL AND MANAGEMENT

ISSUES IN SHOPPING CENTRES
ISSUES IN MANAGING PROPERTY AND FACILITIES
CAR PARKING

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Parking spaces are important to the car-borne

shopper, and essential to the success of the
scheme.
Typically, the main issues with regard to carpark facilities are amount of parking spaces (in
correlation with NLA), safety and security.
Parking tariffs need to be considered carefully
and must be reasonable.

OPERATIONAL AND MANAGEMENT

ISSUES IN SHOPPING CENTRES
ISSUES IN MANAGING PROPERTY AND FACILITIES
WASTE

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Shopping centre waste is varied, and is mostly

produced by retail businesses.
damaged or obsolete stock;
discarded packaging;
sewage and wasted

OPERATIONAL AND MANAGEMENT

ISSUES IN SHOPPING CENTRES
ISSUES IN MANAGING TENANT MIX
Tenant mix refers to the combination of business
establishments occupying space in a shopping centre
to form an assemblage that produces optimum sales,
rents, service to the community and nanciability of
the shopping centre venture.

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a good tenant mix is described as a variety of stores

that work together to enhance the centre s
performance, and operate successfully as individual
businesses.

OPERATIONAL AND MANAGEMENT

ISSUES IN SHOPPING CENTRES
ISSUES IN MANAGING TENANT MIX
DIFCULTY IN MAINTAINING A SUCCESSFUL TENANT MIX:

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Heightened competition between centres, arising from their

proliferation and consumers greater mobility,
A difcult retail market, will result in falls in retailers space
needs and a reduction in landlords exibility in managing
tenant mix.
Ever-changing demographics, fashion and consumer
demand, which lead to the decline of some older retailers
and the brisk expansion of new ones, often with different
space requirements.

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WHICH TYPE OF RETAIL MOST AFFECTED?

Online competition increases
predictably as
online prices,
selection,

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convenience,
customer trust

improve
relative to
physical
stores

Heres how three industries scored for

key drivers (1=low; 5=high).
between 30 and 35, digital
capabilities are or will soon be a
strategic priority for your firm.
below 30, you should focus on
developing digital tools to build
traffic, enhance in-store experience,

FUTURE OF SHOPPING AND WHAT YOU

CAN DO TO PREPARE
1. RETAILERS MUST ADOPT THE FOUR PILLARS OF AMAZON
SUCCESS TO THRIVE.

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1. Be Customer Centric
2. Be Creative

3. Be Focused on Customer Experience

4. Continuously Improve & Optimize

2. DELIVERING PERSONALIZED EXPERIENCES WILL BE KEY.

3. THE DAYS OF ONE-SIZE-FITS-ALL CUSTOMER SERVICE ARE OVER.

FUTURE OF SHOPPING AND WHAT YOU

CAN DO TO PREPARE
4. USE TECHNOLOGY TO STRENGTHEN CUSTOMER RELATIONSHIPS
WHILE MAKING OPERATIONS EASIER

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5. THE FUTURE OF RETAIL WILL BE TRANSPARENT, DYNAMIC, AND

SEAMLESS.
6. MAKE AUTHENTIC CONNECTIONS.
7. THE FUTURE OF RETAIL IS MOBILE.
8. GET BACK TO THE BASICS.

FUTURE OF SHOPPING AND WHAT YOU

CAN DO TO PREPARE
1. RETAILERS MUST ADOPT THE FOUR PILLARS OF AMAZON
SUCCESS TO THRIVE.

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1. Be Customer Centric
2. Be Creative

3. Be Focused on Customer Experience

4. Continuously Improve & Optimize

2. DELIVERING PERSONALIZED EXPERIENCES WILL BE KEY.

3. THE DAYS OF ONE-SIZE-FITS-ALL CUSTOMER SERVICE ARE OVER.

TREND TO WATCH
1. MALLS ARE BECOMING ALLS.
2. THE ARTISANAL MOVEMENT WILL FLOURISH

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3. APPAREL IN THE FUTURE WILL BE PERSONALIZED AND TAILORED

TO OUR UNIQUE PROPORTIONS.
4. MOBILE RETAIL WILL HAVE TWO MEANS.
5. LOCATION-BASED TECHNOLOGY

TREND TO WATCH
6. OMNI-CHANNEL RETAIL

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7. TOP BRANDS NOW START ONLINE

8. LESS RETAIL, MORE LIFESTYLE AND ENTERTAINMENT SPACES

9. CONSUMERS ARE LOOKING FOR EXPERIENCES THAT GO WELL
BEYOND TRADITIONAL SHOPPING

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