15TH ASIA PACIFIC RETAIL CONFERENCE AND EXHIBITION,
SINGAPORE
SPEAKER : Mr. Tan Hai Hsin
REJUVENATING RETAIL PROPERTIES
DURING CRISIS AND STAYING RELEVANT BEYOND
Good morning to all of you here today. I would like to thank the organisor of this year
APRCE for allowing me to share with you my research. This is my fourth
participation in APRCE as a speaker since 2005.
Today, I was supposed to share with you 10 examples of shopping centre
transformation. Due to the time constraint, I will only able to present 8 of them from 6
countries. These shopping centres suffered during the Asian and world crises that took
place during the last decades. However, they managed to turn around successfully by
understanding their target shoppers better, introducing creative solutions in retail
planning and promotional programmes as well as working closely with existing
tenants.
At the end of the case studies, common success factors that make these shopping
centres able to revitalize and remain relevant in the future will be highlighted.
SINGAPORE
I would like to start the first two case studies in this home country – Singapore. They
are several shopping centres here suffered during different parts of the economic
crises during the last 13 years but managed to turnaround. They include Plaza
Singapura, Paragon, Marina Square, Hougang Mall, Clarke Quay, Liang Court and
White Sands.
Today, I will just present two cases :
CASE STUDY 1 : MARINA SQUARE
Marina Square shopping mall opened in the 1980s. It is just next to where we are
now.
Marina Square is a city shopping centre, it has a nett floor area of 700,000sf over 4
retail levels and 300 shops.
Marina Square is part of the first building complex built on the reclaimed land at
Marina Centre and it was the largest shopping mall in Singapore at the time. The
complex also houses three hotels, which are Mandarin Oriental Singapore, Marina
Mandarin and the Pan Pacific Singapore.
I visited this shopping centre when it was opened in the late 1980s, when it was
refurbished in 2005 and several times after it was renovated.
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When it first opened, it was a very popular shopping centre. Anchor tenants include
Metro Department Store, Tokyu Department Store, The Best Connection, Golden
Village Cineplex, Toys R Us and an outdoor food court. Tokyu closed down in 1994
and replaced by Kmart. Kmart then closed down in 1996. NTUC Fairprice
supermarket was the first supermarket in Marina Square, later replaced by Giant
supermarket that also shut down subsequently in 2007. Metro also closed down
eventually.
The Asian financial crisis and the decentralization of shopping centres to suburban
areas throughout Singapore affected the performance of Marina Square during the
1990s.
In 2004, the mall started major renovation works at a cost of S$100 million which
were completed in mid-2006. Refurbishment was carried while the shopping centre
remained open. New building facades and new logo have been introduced. New
ceiling and flooring have also been added. Also, the central atrium was enlarged. An
underground link was also construction to join to a MRT station. Outdoor food court
on Level 2 was shifted indoor to Level 4.
Retail areas increased from 2 levels to 4 levels. Number of shops increased from 250
to 300. All retail outlets have been re-organised into various zones, including fashion,
food, children, IT, sports, furnishing and entertainment.
New anchor tenants include John Little and Muji. 4 new food zones have been
created : the outdoor restaurant street, the 2-level restaurant corridor, Centre Stage
restaurant enclave as well as The Gallerie food court on Level 4.
Marina Square is now a refreshed city shopping centre that attracts youngsters,
families, office workers and tourists on the daily basis.
CASE STUDY 2 : WHITE SANDS
White Sands Shopping Centre is a shopping mall located in Pasir Ris suburban
residential area next to a MRT Station as well as a bus interchange. Opened in 1996,
it has a nett floor area of 150,000sf over 6 retail levels and 122 shops.
The following are some of the old photos taken when I first visited this shopping
centre in 2006.
White Sands had several anchor tenants at its initial years. They include NTUC
Fairprice supermarket, Marks & Spencer, John Little, Courts mega store and 4-screen
Eng Wah Cineplex. Except for NTUC Fairprice, these anchor tenants are no longer
around. In 1999, the cineplex closed down and replaced by a community library.
White Sands faced intense competition from Tampines regional centre which is just
one MRT station away. In Tampines, there are 3 large shopping centres and an
established town centre. Surrounding residents prefer to visit these large shopping
centres for wide variety of goods and services.
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In the year 2007, White Sands shopping centre was brought over by AsiaMalls
Management Pte Ltd. The shopping centre underwent renovation works that changed
the exterior of the shopping centre. Changes in interior designs were not major. Part
of the Basement 1 car park where the supermarket is located was converted into retail
space with more shops.
New facilities such as travelators, children’s restrooms and nursing rooms were added
for the convenience of shoppers. Retail shops increased from 64 units to 122 units.
NTUC Fairprice supermarket is the only key tenant. The library remains a popular
hang-out place for the locals. The food court was revamped. More restaurants were
introduced and more take-away food counters were added.
Trade mix of the shopping centre focuses on more service-oriented businesses such as
bank, post office, tuition centre, music school, reading learning centre, language
centre, Chinese medical clinic, hair salon, beauty salon, barber shop, etc.
Tenant mix of the shopping centre includes more independent retailers rather than
national chain stores.
The mall has now become a favourite place for teenagers, families and working
adults. It is now busy on both weekdays and weekends.
MALAYSIA
Now I would like to introduce two projects in my country – Malaysia.
CASE STUDY 3 : CHERAS LEISURE MALL
Cheras Leisure Mall is located at the suburban area of Kuala Lumpur. Phase 1 of the
main building was opened in late 1980s. It is conceptualised as a neighbourhood mall
with a net floor area of 261,000sf and 153 retail shops. The centre has two buildings
linked by a sky bridge.
Cheras Leisure Mall started with a 4-storey main building and anchored by Kerry’s
department store and supermarket. In 1994, Phase 2 entertainment block was opened
with a 4-screen cineplex, an amusement centre with an indoor/ outdoor roller coaster,
36-lane bowling alley and retail shops.
Due to slow business, Kerry’s closed down and replaced by Savers-In that retailed
cheaper goods. Savers-In shut down subsequently and replaced by Royal Ahold Tops
supermarket in 1996. The first floor anchor space was sub-divided into small retail
shops. The cineplex suffered from poor business during this economic downturn due
to piracy. Malaysian consumers preferred to buy pirated VCD and DVD instead of
visiting cinemas.
In early 2000s, an accident took place at the roller coaster inside the amusement
centre. The roller coaster was removed subsequently.
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Tops taken over by Giant supermarket in 2003 after the earlier decided to leave
Malaysia after incurring heavy losses.
The bowling alley ceased to operate in 2007 due to slow business. The empty space
was renovated and fitted with new tenants including 15,000sf Fitness First, Starbucks,
Secret Recipe and several restaurants and shops.
From 2008, Cheras Leisure Mall also refurbished the rest of the building with new
ceiling, new lighting and new features. After the major renovation, new group of
tenants were brought in. More brands and quality tenants are now found in this
neighbourhood shopping centre. The cineplex also upgraded its cinema facilities in
order to draw back moviegoers with better seating, better sound system and better
screen.
In 2009, the poor-performing restaurant area below the amusement centre was
thoroughly renovated and renamed as Craving Lane. It is now occupied by good
quality cafes and restaurants.
From 2010, this shopping centre managed to attract good quality fashion retailers
including Baleno, Yishion, Esprit Outlet, Levi’s Outlet, Voir Gallery, etc.
Despite losing its anchor tenants several times during the last 15 years, Cheras
Leisure Mall managed to transform itself successfully by re-configuring former
anchor space into exciting retail zones. Today, it attracts shoppers beyond 10 minutes’
driving distance, enhancing its status from a neighbourhood shopping centre to a
suburban mall.
CASE STUDY 4 : VIVA HOME
Viva Home is located at the fringe of Kuala Lumpur city centre. It is a specialty retail
centre. The shopping centre was first opened in 1996. Currently, it has 660,000sf net
floor area over 5 levels with 300 shops.
Viva Home was formerly known as Ue3 Mall. During the initial years, it had 3 anchor
tenants Xtra hypermarket, Smile Cineplex and Cosmic bowling alley. The
hypermarket closed down in early 2000s due to Asian financial and economic crisis.
Another local hypermarket opened in this shopping centre but closed in less than a
year due to poor business. The cineplex and bowling alley also closed down during
the same period.
After the closures of the anchor tenants, one-stop concepts such as fashion wholesale
city and bridal city were brought into this shopping centre but they moved out later
due to poor shopping traffic.
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In 2003, public-listed company Hai-O leased the shopping centre and converted into a
retail centre specialized in Chinese goods and services. It was called Malaysia-China
Commerce City (MCC City). China medicines, Chinese medical hall, Chinese
bookstore, Chinese furniture, Chinese antiques, Chinese arts and crafts, Chinese
cultural centre and Chinese theatre were the trade mix of this revived shopping centre.
A supermarket called D-Choice was also opened on the former Xtra hypermarket.
By early 2008, most of these shops had shut down due to weak retail sales.
In late 2008, Kha Seng Group acquired the shopping centre and positioned it as a onestop home centre. It started massive refurbishment in 2009 and re-opened on April
2011 as Viva Home.
New anchor tenants of Viva Home include Giant superstore, MBO Cineplex and
50,000sf IT centre. More than 50% of the shops are furniture and furnishing retailers.
The shopping centre formerly known as Ue3 Mall has now been totally transformed
with new facades, additional escalators, brighter atrium and new ceiling and flooring.
THAILAND
We now travel to another South-East Asian country – Thailand.
CASE STUDY 5 : CENTRAL WORLD
Central World is located at Rachaprasong shopping district in Bangkok. Originally
called the World Trade Center, this 8-storey mall was opened in 1990. It has a nett
floor area of 2.6 million sf with almost 600 stores. It is the largest shopping centre in
Thailand.
The following are photos I took when I visited this shopping centre in 2005. World
Trade Center was renamed as Central World Plaza in 2002 and later called as Central
World in 2005.
The old shopping centre was occupied by a few anchor tenants. King Power, a local
duty free store, 6-screen Cineplex and 24-lane bowling alley. They all closed down to
make way for the massive refurbishment.
The old shopping centre was suffering from low shopping traffic and poor shopping
ambience.
Anticipating the opening of Siam Paragon next door, Central World Plaza started
massive renovations and expansion in 2003. By 2007, the new mall was fully opened,
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The new mega mall has several new anchor tenants. Isetan department store, Zen
department store, Central Food Hall, 15-screen cineplex and an ice skating ring.
Central World is a complete transformation from the old one. Spacious, brightly lit,
refreshing and attractive.
On 19 May 2010, Central World was one of the many properties set on fire when the
Red Shirts anti-government protestors were forcibly removed after months of
demonstrations which included complete blockage of the Rachaprasong shopping
district. The parts of the complex most affected were the Zen department store and its
adjacent annex.
A portion of the shopping mall reopened on 28 September 2010 after months of repair
works.
TAIWAN
CASE STUDY 6 : TAIMALL
The Taimall's Nankan Family Entertainment Shopping Center is the largest shopping
center in Taoyuan county, a suburban area on the outskirt of Taipei. It was opened in
1999. Taimall has a net floor area of 624,000sf over 9 floors with 170 shops.
Taimall is considered the first purpose-built shopping mall in Taiwan. Its architectural
design is modeled after a castle.
When it first opened, Makro wholesale centre was the anchor tenant of Taimall. It
occupied 100,000sf on the Basement 2 of the shopping centre.
On Basement 1, Extreme Fitness Center took up almost the entire floor. A 14-screen
Miramar Cineplex is located on the top floor.
I visited this shopping centre in 2005. Taimall won International Council of Shopping
Centers (ICSC) award for best architectural design in 2000. It managed to recover its
investment in 2005, 6 years after it opened. It claimed to be the first in Taiwan to do
so. Since 2007, it provides wifi access in the entire shopping centre.
During the Asian financial crisis, Makro business was affected and it closed down in
2000. Later, Tesco took over the anchor space and also closed down subsequently in
2002.
This anchor space at the basement level was subsequently occupied by A-Zone Power
Station in 2004. It is Taiwan's first indoor sports area with retail space to attract young
shoppers and families. It offers indoor recreational facilities a the centre of the space
including jogging track, badminton court, mini-golf, basketball court, rock climbing,
rollerblading and go-kart. Surrounding the sports facilities are more than 40 retail
shops retailing in mainly domestic and overseas sports brands.
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Government of Singapore Investment Corp. (GIC) purchased 83% share of Taimall at
a total sale price of US$205.4 million in October 2008 along with the 17% share
originally owned by GIC. Taimall becomes a property fully owned by foreign
investors.
Despite of not having a traditional anchor tenant, Taimall not only draws shoppers
from nearby offices and residents of Taoyuan area, it also attracts a large number of
out-of-town tourists.
JAPAN
CASE STUDY 7 : LALA PORT
Lalaport Tokyo-Bay was opened in 1981. Currently, it has a nett floor area of 1.2
million sf and 540 retail stores over 4 retail levels. It has more than 8,000 car parking
lots, an amazing facility in Tokyo.
When it first opened, Lalport Tokyo-Bay was known as LaLaport Funabashi
Shopping Center. It was anchored by Sogo department store and Daiei supermarket. It
is also supported by 200 specialty shops.
In 1988, LaLaport 2 was opened with shops and a cinema complex. The name,
LaLaport Funabashi Shopping Center was then changed to LaLaport Tokyo-Bay.
Harbor Grill was opened in 1998 offering a combination of food, culture and
entertainment. The following year, Lalaport 2 was renovated.
Lalaport 3 started in 2000 to focus on the needs of the families.
During the Japan decade long economic downturn, Sogo went bankrupt and closed
down its anchor tenant space in Lalaport in 2000. The empty building was refurbished
and renamed as Lalaport West with many specialty stores.
Lalaport 1 was refurbished in 2003 by re-organising the children zone to meet the
changing consumers’ needs.
Its second anchor tenant Daiei supermarket also closed down in 2002 after the
supermarket operator went under. The building was renamed as Lalaport East with the
introduction of a food theme park called Toyko Bakery Street.
In 2006, Candy Drive was introduced in Lalaport 1, consisting of specialized stores
for apparel, restaurants and lifestyle products.
Lalaport Tokyo-Bay survives and succeeds without the two traditional anchor tenants
by re-inventing the anchor space, introducing thematic zones and adding more variety
of goods and services.
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UNITED STATES
CASE STUDY 8 : FASHION ISLAND
Fashion Island is located in Orange County of California State. It was opened in 1967.
Currently, it has a nett floor area of 1.5 million sf with 140 retail stores over 3 levels.
When it was first opened, Fashion Island has four department stores: Buffum's, J. W.
Robinson's, The Broadway, and J.C. Penney. These four buildings were supported by
several smaller stores.
In the late 1970s, Bullocks Wilshire and Neiman Marcus were added. In the early
1980s, J.C. Penney moved out, and the building it occupied was reconstructed and
reopened as "Atrium Court".
In 1988, the center underwent a major expansion and renovation, adding the Island
Terrace Food Court, an eight-screen cineplex, and three new avenues of shops, all of
which converge in a circular courtyard with an animated fountain called Iris Fountain
that shoots jets of water up to 9.1m high.
In 1990, the Bullocks Wilshire store became an I. Magnin department store. The latter
closed down in the mid 1990s. Buffum's closed in 1991, and its space was later
subdivided into smaller stores. The Broadway was shut down in 1996, and was
replaced by Bloomingdale's department store.
In the early 2000s the shopping mall underwent additional minor renovations
resulting in the alteration and replacement of landscape elements, building facades,
outdoor furniture and floor materials to better reflect the Mediterranean theme. In
addition, a carousel was installed and a new wing with restaurants and shops,
In 2006, Robinsons department store was replaced by Macy's store. This is the year I
first visited Fashion Island.
In 2010, Nordstrom came into Fashion Island as the fourth anchor tenant.
Although public objected to it, the popular carousel was removed in January 2010 as
part of major renovations of the centre.
In June 2011, Fashion Island completed a US$100 million renovation with new
landscaping, hardscape, hard-carved granite fountains, building facades and relaxing
outdoor furniture.
By middle of next year, Whole Foods Market will open a 32,000sf supermarket in
Fashion Island.
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For the last 30 years, Fashion Island has suffered from reduced shopping traffic due to
the closures of its anchor tenants a total of 6 times. They continue to reinvent
themselves with new concepts, new trade mix and improved shopping environment.
SUMMARY
Why they suffer in the first place?
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Loss of anchor tenant(s)
New retail competition
New shopping habits due to changes in retail scenario – eg., entry of
hypermarket format
The following are summary of key strategies in order to make a shopping centre to
turnaround successfully :
(1) Complete Makeover
A complete refurbishment of the existing shopping centre is required in order to
attract new tenants and entice your target shoppers to come. A complete makeover
means large financial resources are needed.
(2) Strong Determination and Dedication
Investing large sum of money to change the interior and exterior of the shopping
centre does not guarantee success. Strong and experienced management team as well
as persistency and dedication from the owner are needed to draw new and quality
tenants to sign up. Aggressive promotions are also required to convince shoppers to
come back to your shopping centre.
(3) Less Dependence on Traditional Crowd Pullers
Traditional anchor tenants such as department store and supermarket are no longer the
most critical pull factors for a shopping centre. From the several examples above,
shopping centres were able to turnaround successfully even without the traditional
anchor tenants.
CONCLUSION
From the highlights of the above and many other cases I have read and seen,
revitalization of a shopping centre during economic downturn is no easy task. It
requires financial resources, complete makeover and strong determination of the
owners.
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You will notice that most of these cases I presented this morning, their earlier failures
were not solely due to reduced spending by shoppers as a result of economic crisis.
They failed to generate sufficient shoppers and tenants because of increased
competition from new shopping centres in both city centre and sururban locations.
New shopping centres near to you eat away your market share by offering more
variety, better quality tenants, modern facilities and easy navigated layouts.
One major lesson we need to learn is we need to keep updating ourselves on the
changes in retail industry and consumer shopping behavior in order to have our
shopping centres remain relevant today and into the future.
I would like now to end my presentation today. I sincerely thank you for your support.
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