MODELIZACION CON VARIABLES EXOGENAS

AN N EMERGING MARKET EMERGING MARKET

BY PHILIP EVANTS > Head of Ret ail, Greece> Cushman & Wakefield

M a d r i d X a n a d u i n S p a i n

MALL MANAGEMENT MALL MANAGEMENT SECTION IV

SECTION IV

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basic design eliminates the integration of the two and both number of these shopping centres may fail to live up to their

function in isolation without supporting each other. The cent re promise to provide consistent footfall and conversions to

fails to derive benefit from the presence of an anchor and the support ret ailers.

anchor fails to benefit from the mall footfall. The anchor t enant There is hundreds of million of square feet of retail real estate would fail to perform their role as an anchor.

under development currently; and for the best to succeed, there The design of the centre should be unique and something is a need to operate these centres professionally. The need t o

previously unseen by the consumer, giving the centre its own give each one of them an identity, make them stand out with

identity. Many of us, those who have t ravelled around the their own brand values and individual personalities in order to

world and seen one boring centre after another, it is those that provide unique reasons for customers to visit. There lies a need

are unique that inspire us and command a better recall.

to look into and apply the science of 'Mall Management'.

It has to provide a platform for retailers to trade to their The mall management process broadly deals with design and

optimum and a design that encourages them to be innovative development consultancy, marketing of the mall, finance and

in their approach to shop-fitt ing, with cutt ing edge designs.

administrat ion, operations and t enant relationship or

co-ordination. While t he title of the article sounds rather It should be an amalgam of shopping and leisure, where the grandiose, I hope the message will become clear: by potential customers can come and feel entertained and above international management principles, I do, of course, mean all else, it must be a powerful brand in its own right with clear Western European, i.e., those methods t hat have been tried and brand values. Everyone should know what it stands for. For tested and are what international investors have come to example, Xanadu in Madrid; Spain has been very successful in expect. I hope you will forgive me for describing India as an this regard.

emerging market, but, in terms of retail space, we are far behind even Central European countries and now t hat the market is opening up to international investors, we need t o ensure that our new schemes are set-up and managed in accordance with these principles.

So what is it that developers can do to take better advantage of this situation?

Getting the Basics Right: in terms of design and management set-up. Design, not only to provide great customer experience but much more in terms of operational efficiencies.

Transparency: An open book policy with the retailers and the way in which we administer the service charge. A bett er operations-oriented design would also bring efficiency in operational costs.

Efficiency: How we maximise the income and returns from our shopping centres.

But in order to churn profits, we have to get the basics right, so let's st art at the beginning with 'Design Consultancy'.

Is it reality or Fantasy Island? Has he understood the brief or is he on his own ego trip? Signature buildings and designs are good, but t hey have to be capable of operating. They have to be in sync with the retailers demand and requirements. In an emerging market like India the consumers' preferences will change much faster and hence t he design has to provide flexibility and opportunity to adapt to economic changes and remain successful for the longer t erm.

On a project that I am involved with elsewhere in Europe, the architect had actually designed such that the anchor tenant would have the only entrance to their store straight off the car park and no entrance t hrough the mall. In such a scenario, the

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THE ARCHITECT'S BASIC DESIGN

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As mentioned earlier, the anchor tenant needs to be put in the The public or common areas need to be designed with right place, with its identity determined and the deal done -- it operation and functionality in mind. Many a times the needs to perform its role as an anchor tenant att racting not infrastructure is not designed to support the operations of a just the consumers to the centre but supporting their centre. A centre att racting a million and a half customers a

circulation within the centre. The selection of the anchor week and employing a couple of thousand workers and sales tenant is one of the most critical elements of mall leasing as staff would need equal amount of activity behind the scenes to the positioning of the anchor tenant helps in the overall keep such large operations intact. In such a mall the movement positioning of the mall and attracting other like-minded of goods and general customer care takes a beating and the

tenants into the centre. maintenance costs for the upkeep of the common area

increases. The customers, who should not not ice operational issues, become aware of t hese nuisances and become distracted instead of focusing on retail.

We need to prepare a Common Area Maintenance (CAM) or

service charge budget, a realistic estimat e of what it will cost t o The grandness of the building which att racts more and more operate the centre. This should not just be a fixed percentage

customers also needs to be maintained t o keep it fresh forever.

of rents because if it costs more, t he landlord will be out of The mat erials and t he finishes need t o be easily cleaned and pocket and if it costs less the tenant is out of pocket and the stand the test of time; the centre should continue to look new, landlord makes a profit – certainly not t he best way to manage well after the opening date. The design should provide for

a shopping centre. mechanical upkeep of the common areas. This means, a

thorough planning in terms of equipments required for the There should be a properly calculated CAM matrix apportioning

upkeep, their movement and their storage with in the shopping the costs across all units using a weighted formula based on

centre.

floor area; more about CAM later on.

SHOPPING CENTRE OPERATIONAL BUDGETING MALL MANAGEMENT

MALL MANAGEMENT SECTION IV

SECTION IV

P a r k i n g L o t a t F i s h e r g t a e S h o p p i n g C e n t e r , P r e s t o n

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One would need signage that are fit for purpose, clear and concise and direct customers around t he centre; as well as lighting that is imaginative and adds to t he overall experience;

remember we are trying to create a theatre of shopping.

The servicing and refuse regimes need to be designed so it happens seamlessly but behind the scenes, deliveries should not stret ch across the mall during trading hours - not only is this unsightly, it also introduces huge Health & Safety issues.

The goods movement through t he common areas would also lead to breakage and wear tear of finishes in the common areas.

The operation and location of both the Food Court and Car Park requires early consideration. Will the Food Court be leased to individual tenants or one operator? Will there be a separate CAM? Who will clean it and remove dirty trays, and so on? The customer movement in t he Food Court, the operator movement in the food court, t he gas supply, garbage disposal, dish washing, treatment of the wet areas, air change and air-conditioning, etc., have to be given special consideration. Material selection for flooring, furniture, etc., impacts on the future running cost of the centre.

The car park is often the customers first and last impression of the centre, if it's covered it needs t o be bright, giving the impression of space and security. The car park design should enhance the vehicle movement, ease out the peak traffic load and provide excellent signage support for customers to easily find their way back to their cars. The charging policy also needs to be determined, if it's not free, one needs to decide whether it will be pay on exit, pay on foot or pay on display.

Such issues need t o be considered and signed off at an early stage. The customer should not spend long hours trying to find a parking bay, to pay for the charges or to find ent ry and exit points. Time spent in parking by the customer is opportunity lost for the retailer.

Of course, we all want our projects to be successful, these are some useful pointers to assist in that success:

Team Set -Up and S truct ure

Empower your teams. Set-up a proper structure from day one with separate teams responsible for issues such as Marketing, Finance, Operations, Tenant Coordination and insist that each of these Team Leaders reports to a weekly Board meeting on progress that is being made. The Board meetings also have to make decisions and push t he client into doing so. Consultants are appointed t o deliver projects, not make friends and occasionally we need to bully the client into making a decision because the worst decision is deciding not t o make one!

This type of structure not only forces people to t ake and accept responsibility, it also gives the project moment um, removing disillusionment as I mentioned earlier.

Operationally one needs to set out the critical path. Critical path is a schedule of absolutely everything that needs to be done working back from the opening date on a time-line. It then clearly identifies those issues that are behind schedule

The car park is often the