Magazines Archives - 2010 February

Mulling the future of shopping malls
Story 7 - Retail Property Report

Michael P Kercheval, who heads the 52-year-old global retail trade group the Washington DC-based Inter-national Council of Shopping Centers (ICSC), painted a cautiously optimistic picture of the global retail property industry steadily moving toward recovery.

Kercheval, president and CEO of ICSC, described the process that brings malls to life in new markets as “a wonderful and delicate dance of developers and retailers on the world stage”.

He discussed industry trends inside and outside Asia, shed light on how recession-struck malls and retail tenants talked through issues behind the scenes, and offered special praise for Singapore, which harbours ambitions as a top regional shopping hub.

Singapore

“Singapore has one of the longest histories in mall history,” Kercheval said, describing the city-state as a lab for vertical retailing. “They’ve made all the mistakes malls can make and recovered very well. They figured out what works.”

And what works, he said, are malls built expressly for compact urban markets — since the world had more of these than the large suburban market spaces that first gave rise to sprawling shopping centres in the US.

City malls, as defined in the Singaporean lab, rely on public transport, frequent visits and smaller purchases per trip, he said. “Singapore has developed a model to do that very well, and we think it has application in Asia and maybe even in the denser African cities.

“The other component of this lab is that retail creates jobs. If you can tie that into tourism, you can really create a wonderful vehicle for local prosperity.”

Indeed, on the surface, Singapore with its population of 4.8 million would seem to have many more malls than it needs, but any hint of a glut disappears when 10 million or so annual tourist arrivals
are factored in — except perhaps when recession cuts the visitor count.

“There are very few places on the planet that have done this well,” Kercheval said.

“Singapore is one. Dubai is perhaps another, and a third is possibly Las Vegas.”

Once tourists come into the equation, the old rules on market catchments — like a minimum population of 200,000 to support a mall — do not apply. Singapore’s success, the ICSC chief explained, hinges on knowing the types of tourists coming in, and ensuring they encounter
the right kind of retailers and centres. It is a proven formula for creating jobs and promoting economic
growth, he said, noting that retailing in the US is the biggest generator of new jobs.

“As a global trade association, we spend a lot of time analysing Singapore.”

To view full story, get a copy of Retail Asia. To subscribe, please download the subscription form from http://www.retailasiaonline.com/subscription.html