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Battle of the retail bulge ends as region’s malls get ‘cozier’ repositioning
Kipp hatesloves to say it. We told you so! Jones Lang LaSalle agrees that ‘community concept’ emerges a mall trend as competition heats up and online retailing continues to rise.
May 17, 2011 3:46 by p.deleon
“The future of retail is in community concepts that provide service-oriented options reflecting the needs of the local catchment,” according to global real estate advisory firm Jones Lang LaSalle (JLS).
Well, we hate to say it…(okay, actually we love saying it) but we told you so…in fact we told you back in March this year, that ‘less is more’ is going to be the new trend. Bah.
In a nutshell, the emerging trend is in giving mall goers the impression of a community feel or a smaller more personable environment.
Malls in the region, JLS reports, will be undergoing a kind of repositioning to cater to the shift in shopper preference.
Perhaps a few validations of this view are activities malls in the UAE alone are doing recently. The latest of these is Burjuman’s announcement that it will be renovating its old wing over the next two years.
In addition, Mall of the Emirates has initiated a retailer incentive programme, which in Kipp’s eyes can only mean a more than insignificant drop in sales that prompted the mall operators to flash cash prizes in front of its tenants’ employees.
Of course there’s also the best example of posterity in the retail market (much to Kipp’s delight), which is Yas Mall halving its retail space.
“The retail sector in the MENA region is undergoing a significant shift from the development of super-regional malls to smaller community focussed shopping centres. The next phase of retail development will see the emergence of community concepts, driven by accessibility, convenience and service-oriented options that meet the needs of each neighbourhood,” said David Macadam, Head of Retail Division, Jones Lang LaSalle MENA.
“We also expect a greater emphasis on quality retail asset management as competition intensifies among shopping centres in some markets. To remain competitive and attractive to consumers, mall owners may explore options such as tenant remix, refurbishment and expansion opportunities.”
JLS’ House View on MENA retail real estate market for May this year cites changing consumer shopping patterns – particularly the expansion of internet retailing – will pave the way for a new breed of retailers and different retail formats.
“We also anticipate changes in shopping patterns, like the expansion of online shopping, which can actually positively impact the space and experience of physical retail in the long term. Internet retailing is gaining popularity as consumers discover the cost and time saving benefits of this alternative,” added Macadam.
Here are the rest of its key findings:
The retail sector across the MENA region will see a significant shift in emphasis over the next few years with far greater attention focused on community-led retail. A number of new trends are emerging within the retail sector, including:
* The intensified competition among shopping centres in some markets has created the need for mall owners to assess re-positioning options such as tenant mix, expansion opportunities and refurbishment in order to remain competitive. Older malls that lack ‘pull’ factors such as entertainment and F&B options will ultimately suffer and some may be converted to non-retail uses.
* Changing consumer shopping patterns and particularly the increased use of internet retailing will make way for a new breed of retailers. This trend may positively impact the retail environments required in the long-term. Retailers may be encouraged to provide a showcase for the products complete with knowledgeable and well trained staff.
* The future of retail will be focused more on community concepts that provide service-oriented options that are in line with the needs of the local catchment.