recon asia-pacific october 13 2016 - deborah weinswig€¦ · october 13, 2016 10 takeaways from...
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1 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.
OCTOBER13,2016
10 Takeaways from ICSC RECon Asia-Pacific 2016 1) Transit-oriented development, the development of shopping areas near public
transit, represents the future of urban shopping centers. This type of real estatedesignisparticularlypopularinAsia,whereover50%ofthepopulationisexpectedtoresideinurbanareasby2018.
2) Shoppingcentersaimtocreateasenseofcommunitybyofferingexperiencessuchas concerts, in-store classes and dining. Retail property developers need toconsider local residents’ desires for events and entertainment when designingshoppingmalls.
3) Foodandbeverageisakeytrafficdriverforshoppingmalls.ThemajorityofREConAsia-Pacific2016attendeesexpecttoexpandthefoodandbeverageareasintheirpropertiesoverthenextfiveyears.DininginmallsisgainingpopularityinAsia.
The Fung Global Retail & Technology team attended the International Council ofShoppingCenters(ICSC)REConAsia-Pacific2016conference,whichwasheldinManila,Philippines, from October 11–13. The event is the premier annual retail real estateconference in the Asia-Pacific region, and approximately 300 global retail real estateprofessionalswereinattendance.10KeyTakeawaysfromtheEvent
1) Transit-Oriented Development Represents the Future of Urban ShoppingCenters
Against the backdrop of rapid global urbanization, transit-oriented retail real estatedesignrepresents the futureofurbanshoppingcenters,accordingtoLizHolland, ICSCChairmanandCEOofChicago-basedretailrealestateinvestmentfirmAbbellAssociates.Transit-orienteddevelopment refers to creatingamixof commercial retail areasnearpublic transportation,which is anaturaldriverof traffic to retail stores in cities.Busyurbanresidentsenjoytheconvenienceofshoppingonthewaytoworkandonthewayhome.
2 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.
OCTOBER13,2016
Transit-orienteddesignisparticularlypopularinAsia,whereover50%ofthepopulationisexpectedtoresideinurbanareasby2018.Japan,Singapore,ChinaandHongKongareleaders in developing transit-oriented shopping centers. Holland shared the successstoryoftheUnionSquaredevelopmentinKowloon,HongKong,whereamultilevelmallwasbuiltaroundasubwaystationonanairportroute.Themallattractsalargenumberoftouristswhoshopthereontheirwaytotheairport.2) ShoppingMallsShouldCreateaSenseofCommunityThroughExperiential
Offerings
Keynote speaker Will Higham, founder of UK-based consultancy The Next Big Thing,characterizedthefutureofshoppingmallsas“communal.”Mallsareaplaceforlocalstomeetandsocializethroughexperiencessuchasconcerts,in-storeclassesanddining,hesaid. Bill Giouroukos,Managing Director of 3G Holdings, an Australian retail propertyconsultancy, calls shopping centers the “the new town hall,” where locals meet foreventsandgatherings.
HighamcitedtheAvalonmallinAlpharetta,Georgia,asanexampleofamallwherethedesign has been tailored to the local community. The developer conducted extensivesurveysof localresidents’ interestinentertainmentandevents,andthoseneedswerefactoredintothedesignofthemall.PaulYee,SeniorDirectorofRealEstateandStoreConstructionatNikeGreaterChina,sharedNike’sexperienceofestablishingarunners’communityinShanghaiandcreatingin-storeeventsaroundtheShanghaiInternationalMarathonschedule.
Source:FungGlobalRetail&Technology3) ShoppingCentersReinvented:RetailtainmentIstheFuture
KimMcInnes, CEO of ShoppingMalls for UAE-based mall operator Majid Al Futtaim,highlighted the state-of-the-art entertainment facilities at theMall of the Emirates inDubaiasanexampleofhowentertainmentofferingscangeneratetrafficandrevenueformalls.McInnespointedoutthatentertainmentisacrucialcomponentofshopping-center offerings. The Mall of the Emirates features a 22,500-square-meter ski resortcalledSkiDubaiandan8,150-square-meterthemeparkcalledtheMagicPlanet.
3 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.
OCTOBER13,2016
Thomas McLain, of US-based law firm Hogan Lovells, said that similar types ofentertainment facilities are being developedwithin shoppingmalls in the US.McLaincommented that it is important to offer family-oriented and education-basedentertainmentatshoppingcenters.Theproportionofentertainmentareasisabout10%atsomeUSmalls,andthat figure is likely to increaseto25%over thenext fewyears,McLainsaid.4) Food and BeverageOfferingsWill Be the Key Traffic Drivers for Shopping
Malls;LocalizedDiningatMallsIsGainingPopularityinAsia
Severalspeakersindifferentsessionspointedoutthatfoodandbeverageisakeytrafficdriverforshoppingmalls.Foodandbeverageofferingsattractpeopletocongregateatshopping malls, commented Margarita Forés, a well-known Philippine chef andrestaurateur.Basedonashowofhands,amajorityofconferenceattendeesexpecttoexpandfoodandbeverageareasintheirpropertiesoverthenextfiveyears.InAsia,newlocalfoodconceptsaregainingpopularityatshoppingmalls.AccordingtoForés,peopleinAsiaarelookingtotasteuniquefoodattheirlocalmallsbecauseheavycity trafficprevents frequent long-distance travel. She said shehasalsoexperimentedwithuniquefoodconcepts—suchas1950s localPhilippinedishesandItaliancafés—ather restaurants locatedwithin shoppingmalls inManila, and that thesehaveenjoyedgreatsuccess.
Source:FungGlobalRetail&Technology5)Brick-and-MortarStoresAddressConsumers’InstantGratificationNeeds
Consumers have been trained by online channels to shop wherever they want andwhenevertheywant.Severalspeakersmentionedthat,inordertocompetewithonlinechannels, brick-and-mortar storesneed to address this desire inways that gobeyondtheirtraditionalmeansofoperation.WillHighammentionedthatsomeUKstoreshavecreatedvirtuallyshoppablewindowsthatallowshopperstobrowseandorderproductsoutsidenormalstoreoperatinghours.PaulYeesharedsomeofthemeasuresNikehastakentoaddressconsumers’needfor immediacy.Hesaidthat ifshopperscannotfindthe right size ina store, the companycanaccuratelydirect them to thenearest storethathasthatsize instock, thankstoNike’shighlyaccurateviewof inventory. Inmanycases,Nikeoffersfreedeliverytocustomerswhocannotfindadesiredproductin-store.
4 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.
OCTOBER13,2016
6)MillennialsInfluenceaWideRangeofDemographicGroupsandSetTrendsforShopping-CenterDevelopments
Millennials were one of the key focuses at the RECon Asia-Pacific event. Keynotespeaker Rowena Tomeldan, President of Ayala Land Malls, a Philippines-based malloperator, outlined eight characteristics of the generation. Among other things, shenoted that they are digitally savvy, experience driven, adventurous and passionateabout their causes and that they have a strong desire to be unique. Tomeldan alsonoted that the generation is blurring the definition of work locations. Millennialsinfluencepeopleinoldergenerationsaswell,shesaid,astheGenXandbabyboomergenerationslooktothegroupforlifestyleinspiration.Iz-LynnChan,CEOofSingapore-basedBHGRetailTrustManagement,highlightedafeweffortsthatshoppingcentersinAsiaaremakingtotargetmillennialsandthoseinspiredbythem.SomeshoppingmallsinSingapore,forexample,includebookstoresandcoffeeshopsthatareopenlatetoaccommodatemillennials’desiretoworkoutsidetheoffice.Manyshoppingmallshaveadjustedtheirhoursofoperationtostayopenuntilmidnightand, to cater to experience-driven millennials, some malls have developed themedrestaurantswithawideselectionofcuisines.
Source:FungGlobalRetail&Technology
7)GenZersAretheNewMillennials
Another demographic group thatmany speakers highlightedwas the generation thatfollows themillennials, Gen Z,whosememberswere born in 2001 and thereafter. Inmany countries, this age group is the second-largest demographic group after themillennials. IncertainAsiancountries(suchasthePhilippines)wherethepopulationisyoung, therearemoreGenZers than therearemillennials.WhileGenZdoesnot yetpossess significant spending power, itsmembers will be entering adulthood over thenextfiveto10years,andtheseconsumersare“themillennialsofthefuture,”accordingtosomepanelists.
Asagroupoftruedigitalnatives,GenZersexhibittraitsthataresimilartowhatdefinedmillennials when they were younger. However, Gen Z adopts new technology evenfaster.Somespeakers thinkthatGenZwillcontinuetoexert influenceontheirGenXparents and baby boomer grandparents. In countries such as the Philippines, where
5 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.
OCTOBER13,2016
multigenerationalfamilygroupsoftenparticipateinweekendactivitiestogether,GenZwillsetspendingtrendsforalargersetofagegroups.8)GreenSpacesImproveSalesforShoppingMallsinAsia
There isagrowingdesire to includemoregreenspace inshoppingcenters.Aspartofthe rapidurbanization inmanyAsian countries, thedevelopmentof shoppingmalls isreceivinggreaterconsiderationinurbanplanning.Inmanyplaces,shoppingcentersarelocatedinareaswherelargenumbersofcityresidentsconvene.
Alex Yong, Vice President of Project Development at The Jerde Partnership, a HongKong–basedarchitecturedesignfirm,sharedanexampleofaprojectinOsaka,Japan,inwhich green space comprisesmore thanone-thirdof amixed-use shopping area. Thegreen space features more than 40,000 varieties of plants, and the shopping centerfeatures nine floors of retail space. During the two phases of development, between2003 and 2007, the total sales generated at the property grew from $140million to$290millionandrentsincreasedfrom$4.00to$12.00persquaremeter.Theincreaseinmallproductivitywaslargelyduetotouristswhowereattractedtotheadjacentgreengarden,Yongsaid.9)3D-PrintedShoppingMallsCouldBecomeRealityintheNearFuture
DavidMcCarroll,PrincipalofBuchanGroup inChina,described3D-printingtechnologyasthefutureofshopping-centerarchitecture.Therearealreadysuccessfulcasesof3D-printed apartment buildings in Beijing and offices in Dubai, andMcCarroll noted that“thetechnologyisalreadythere.”Hesaid,“3D-printingtechnologycancreatedynamicbuildingswhoseshapescanevolveovertimeduetospecial,moldablematerialsusedintheprintingprocess.”
According to McCarroll, 3D-printed shopping centers would typically require lessmaterial thantraditionalbuildings,andsomeof thematerialscouldberecycled.Fromanenvironmentalperspective,3D-printedbuildingsarealsomuchmoresustainable,hesaid.10)ShoppingMallSaturationIsGlobal
BillGiouroukosrecountedthehistoryoftheUSretailindustrytoemphasizetheneedforshoppingmallstoreinventthemselves.Hesaidthatownersandoperatorsneedtocloseunprofitablepropertiesandreinvestinexperiencesatprofitablelocations.Hecalledthisprocess“demalling”inthefaceofoversaturationintheUS.Ashowofhands indicatedthatamajorityofconferenceattendeesexpectAsiatoalsobeatriskofshopping-centeroversaturationduringthenextfewyears,giventhespeedofdevelopmenttheyhaveseen.Annie Garcia, President of SM Supermalls in the Philippines, shared similar concernsabout oversaturation in the Philippines, especially in the cities. She added thatdiversifyingshopping-centerportfoliosbetweenurbanandsuburbanareas indifferentprovincesisonewaytopreventsuchaproblem.
6 DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.
OCTOBER13,2016
DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comJingWangResearchAssociate
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