Retail News CRM

Tag: Shopping Centre

  • Taiwan’s Retail Boom: Major Shopping Centre Openings Set to Transform Retail Landscape

    Taiwan’s Retail Boom: Major Shopping Centre Openings Set to Transform Retail Landscape

    A surge of new shopping centers is expected to hit the market in Taiwan this year as developers maintain their commitment to large-scale multipurpose ventures.

    One of the most anticipated launches is the Far Eastern Sogo Department Store’s Garden City in Taipei, which is slated to open its doors in March. With an impressive 99,000 square meters in size, this complex will encompass retail outlets, dining options, and cinema halls, all conveniently linked to the Taipei Dome.

    Company chairperson, Sophia Huang, expressed the company’s high expectations for Garden City, predicting it to pull in over $313.66 million in annual revenue. When combined with the total revenue from its Fuxing, Zhongxiao, and Tianmu locations in Taipei, the group’s annual earnings could potentially reach an impressive $1.58 billion.

    In Taichung, the upcoming opening of Hanshin Intercontinental Shopping Plaza this year marks Hanshin’s first business venture beyond Kaohsiung.

    In addition, Mitsui Fudosan is bolstering its presence in Taiwan. The company has announced that its third Mitsui Shopping Park LaLaport, currently under construction in Kaohsiung’s Fengshan District, is on track to open its doors before the year ends. This mall, with its 270 stores, will offer a variety of dining options, drugstores, a supermarket, a considerable-sized bookstore, and the Arte Museum.

    The development company also divulged plans for a new Mitsui Outlet Park near the Taiwan High Speed Rail Tainan Station. Expected to open either in the first or second quarter, the 240-store outlet center will accommodate home goods retailers, electronics stores, a Japanese-style supermarket, and food and beverage vendors.

    Concerning market conditions, Tsai Ming-chang, the chairman of the Taiwan Shopping Center and Commercial Real Estate Association, noted that while performance in department stores remained steady last year, it’s anticipated to see an improvement. He added that Garden City is poised to create a unique commercial and cultural ambience distinct from the Xinyi District.

    Tsai went on to say, “While Xinyi will persist in drawing in luxury and fashion shoppers, the Taipei Arena area will likely attract consumers who are more interested in cultural, creative, and green spaces.”

    Questions & Answers

    What is the expected annual revenue for the Garden City project in Taipei?
    The company chairperson, Sophia Huang, predicts that the Garden City project will generate over $313.66 million in annual revenue.

    What are the offerings envisaged for the Mitsui Shopping Park LaLaport under construction in Kaohsiung’s Fengshan District?
    The mall will feature several dining outlets, drugstores, a supermarket, a large bookstore, and the Arte Museum among its 270 stores.

    Who is the chairperson of the Taiwan Shopping Center and Commercial Real Estate Association, and what are their thoughts on the future of the retail market in Taiwan?
    The chairman of the association is Tsai Ming-chang, who believes that although department store performance remained steady last year, it is expected to improve. He also mentioned that different areas in Taiwan will attract different demographics of shoppers.

  • New Zealand-based property group buys Entrada Shopping Centre

    New Zealand-based property group buys Entrada Shopping Centre

    New Zealand-based Cook Property Group has bought the Entrada Shopping Centre in the heart of Parramatta for $41.32 million, reflecting a yield of 5.7 per cent.

    The the 5,570sqm Coles-anchored centre, which was developed by Dyldam Developments in 2011, is located in a high profile corner position – and supported by a number of specialty retailers, medical centre and child care provider.

    The centre, which also includes 196 car parks, is underpinned by a 20-year lease to Coles and total weighted average lease expiry of 10 years.

    CBRE Retail Investments’ Justin Dowers, Nick Willis, Mark Wizel and Peter Vines negotiated the sale of the centre on behalf of Centennial Property Group.

    “The sale of Entrada Shopping Centre further highlights that the market is pricing strata retail investments at a similar level to freehold investments,” said Dowers.

    “This is related to the lack of freehold centres offered for sale, but also an increased level of confidence in how these centres perform and the acceptance of this retail platform from the customers.”

    Dowers said strata retail centres are generally developed in highly built up areas where major supermarkets have found it difficult to get a presence in.

    “The benefit for owners of these assets is that they generally provide consistent rental growth underwritten by population growth, and the competition risks are much less when compared to outer growth areas of major capital cities,” he said.

    Willis said the property’s position in Greater Western Sydney’s growth corridor underpinned strong buyer interest in the asset.

    “We received a lot of interest from interstate and international investors given their desire to obtain retail holdings in Sydney – and more specifically the western growth corridor, noting the forecasted population growth in this region,” Willis said.

    Ben Cook of Cook Property Group said the Entrada Shopping Centre is a good strategic fit for his Sydney portfolio.

    “The anchor tenant, Coles, is enjoying exceptional turnover growth as a result of the centre’s prime location,” Cook said. “The barrier to entry for a competing development is significant, Parramatta’s growth story is compelling and the income generated from the asset is mostly non-discretionary.”

    “This fits with my investment model of acquiring defensive assets in core Sydney locations, with excellent growth prospects,” he added.

    Willis said major growth precincts in Sydney’s west such as Parramatta and Westmead were benefitting from significant investment that was helping underpin demand for retail amenity.

    “Investors see this as an opportunity to gain exposure in Australia’s most exciting future cities,” Willis said.

    “With over $10 billion worth of development occurring including the Light Rail, Parramatta Stadium, Parramatta Square and the Westmead Hospital, coupled an estimated 30,000 new dwellings in the region, the future income potential of Western Sydney will continue to underpin investor confidence.”

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  • Malaysia’s The Weld shopping centre for sale

    Malaysia’s The Weld shopping centre for sale

    Great Eastern Life Assurance Malaysia will sell the Menara Weld office building and The Weld Shopping Centre in Kuala Lumpur.

    Both properties, which have been under ownership by the insurance firm for 16 years, have been priced with a reserve of RM270 million (US$65 million) and will be sold by tender. They contain 400,000sqft net lettable area collectively.

    The buildings have been assessed in need of upgrading, although a complete redevelopment of the site could be an option for buyers. Industry observers have picked Hap Seng Consolidated as a good potential buyer for the buildings given its ownership of several nearby office towers.

    Great Eastern maybe releasing the asset as a consequence of its recent development of a Grade A Equatorial Plaza office building nearby, which is just 60-per-cent leased.

    The closing date for tender is December 4.

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  • Vicinity Centres Selects new Board

    Vicinity Centres Selects new Board

    Shopping centre operator Vicinity Centres has revealed that non-executive director Peter Kahan will replace Peter Hay as chair when he retires in August.

    Hay, who has served as chairman since Vicinity was formed in a 2015 merger of Federation Centres and Novion, will retire from the board after the company’s annual results are released in August.

    “It has been a privilege to work with such an exceptional board and management team to navigate through the merger and Vicinity’s formation, to see it become the unified and stronger organisation it is today,” Hay said in a statement.

    Hay said he is delighted Kahan will be taking over as chairman.

    “Peter is a highly experienced and thoughtful director who has made an outstanding contribution to Vicinity’s board during my tenure,” Hay said.

    “His extensive and successful property funds management, financial and business background, complemented by his highly strategic approach and vision, position him to be an excellent chairman through Vicinity’s next chapter.”

    Kahan, who has been a non-executive director of Vicinity since June 2015, also served as chairman of Vicinity’s Remuneration and Human Resources Committee and is a member of Vicinity’s Audit Committee.

    Kahan’s prior roles include The Gandel Group’s executive deputy chair, CEO and finance director.

    “It is an honour to be asked to succeed Peter Hay as chairman of Vicinity,” he said. “I am looking forward to working with the board and management team to continue our relentless focus and commitment to long-term value creation for Vicinity’s security holders.”

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  • Understanding shopping centre traffic trends to adapt consumer strategies

    Understanding shopping centre traffic trends to adapt consumer strategies

    Kepler Analytics is in a unique and privileged position. We have our sensors in over 60 retail brands within 1,700 locations across Australia. We collect traffic and other consumer behaviour measures. By aggregating and anonymising our information we can provide the retail industry with benchmark measures on traffic, sales, conversion and other related KPIs focussed on understanding sales and the drivers of retail sales.

    The Kepler Retail Radar newsletter is published every 6-8 weeks. We try to keep our analysis relevant and deliver helpful insights which assist in understand historical performance but also highlight where learnings can be implemented to deliver better retail results in future.

    Below are the key learnings from October 2018 to the End of February 2019, calculated on a Year on Year, Like for Like Basis.

    • There is a sustained drop in foot traffic into shopping centres in general.
    • Those consumers visiting the centres are doing so with a greater propensity to purchase – there is less of a browsing element than in the past.
    • Retailers are converting a higher percentage of inside traffic (in store traffic) into sales – due to the more serious nature of the ‘buying trip’ and the greater ability of store staff to satisfy their needs – either there is a lower ratio of staff:customer giving more time to focus on each sale opportunity or better abilities to convert (as these stores have been using the Kepler Conversion Programme for some time).
    • The reduction in dwell time and repeat visits and the increase in ATV reaffirm the premise that customers come into stores better equipped to make the purchasing decision than before – it takes less time and less visits to get to the buying decision point.
    • Retailers should consider tweaking their sales approach – it might not be a case of ‘how can I help you?’ but rather ‘what can I help you with?’ – subtle change of focus acknowledging the customer can done their homework and is prepared to buy.

    Where have all the browsers gone?

    The key metrics reveal that whilst centre traffic was down by approximately -8% in October and November (and Black Friday did little to stem the decline), the rate of decline has increased to -17.5% in February
    2019.

    The desire for customers to enter stores as they pass by (Shopfront Conversion) is also in decline, though it is improving. Whilst the rate of Year on Year decline in February 2019 is -1% on prior year, the November
    2018 result reached its nadir at -4.7%. Black Friday delivered its promise to drive the bargain shoppers into store… just not as many stores as retailers would have liked.

    The combination of these two elements means that retailers are having to cope with as much as a -18.4% change in their store traffic levels. This could well lead to catastrophic sales results. And those customers that do enter, are spending -7.6% less time in store. The impacts for merchandising and service focus can also be felt.

    Thankfully stores have been able to offset most of this decline through huge boosts in the Sales Conversion. Once a customer has entered a store, their propensity to purchase has increased by as much as +18.2%. For those retailers that had a softer than desired Christmas 2018, contemplate the result you would have had if your staff, stores (not to mention your online assets to support consumer research pre-visit) had not delivered a +17% change in sales conversion.

    The final piece that has returned sales for Australian stores into a marginally positive result is boosts in the average purchase value. These real aggregated figures show that a change in ATV of +3.8% are what is required to maintain
    even the smallest LFL growth.

    Your store staff are now facing vastly lower potential customers who are more aware of what they want, and willing to spend less time to find it. At the same time, they need to convert a greater proportion of them, and at higher values just to stay flat. Both simple and complex, all at the same time.

    The ability for Australian retailers to respond to these changes are critical. Awareness of the underlying factors that deliver the sales capability and potential of stores is the starting point. Modifying and supporting positive behavioural shifts both at a store and support office level are now the fundamental drivers of sales parity.

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