Three factors determine the success of a shopping mall, according to Wang Jianlin, chairman of the property and entertainment conglomerate Dalian Wanda Group.
These are location, scale and anchor shops, Wang wrote in his column in the Hong Kong Economic Journal.
Although his advice is about running a mall in China, it may also provide some insight for people in the retailing business as a whole.
Location is considered to be of utmost importance.
“There is no textbook [about this], it all comes down to experience,” Wang said.
If you are targeting a particular place, you need to go there and observe.
“As long as the schedule allows, check out the place during different periods of the year, including peak seasons and low seasons. Also during different hours of the day,” he said.
Also try to know the government’s development plans in the area.
A certain location may not have enough population to be able to support a mall at the moment, but if the local government is committed to weigh in, like bringing in government offices, infrastructure upgrades and new schools, that will boost the appeal of residential properties nearby and help increase the traffic of people in the area.
Regarding the scale issue, Wang said a major project needs at least five anchor stores and 20 sub-anchor stores. The optimum size depends on whether it is possible to fill a mall with quality tenants.
On the selection of anchor tenants, Wang said the global trend is to focus on leisure-related activities instead of shopping.
“In our experience, Wanda malls that have done a good job in providing entertainment and catering services are always those that perform best in terms of sales and profitability,” he said.
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