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MallStrategiesForEstablishingSuccessfulWorldClassMalls v7 PDF
MallStrategiesForEstablishingSuccessfulWorldClassMalls v7 PDF
% Vacancy
Sq Ft
3,000 12%
2,000 8%
1,000 4%
2%
0 0%
Mall A Mall B
Convex Public Spaces (CPS)
Axial Public Spaces (APS)
Vacancy Rate
1
mall that does not give them the experience of an aesthetically
superior public space
A mall that caters to high volume and low margin players would
have different anchor and tenant strategies as compared to a
mall catering to the youth. In the Indian context, apart from some
prominent names, most malls are in the range of 50,000-100,000
sq ft of GLA which falls in the “Neighborhood mall” category. Only a
few come even close to the half a million sq ft “Super-regional mall”
sizes. However a lot of the new city malls do not have a clear
positioning strategy and attempt multi-anchor strategies without
having the GLA to support it.
2
3. Build a sustainable Anchor strategy:
Anchors are the life-blood of a mall whereas the in-line stores are its
muscle and bone. These are large format stores which pull in mall
footfalls both from immediate as well as ex- catchments areas.
Anchors can take upto 25% of the total mall GLA. Increasing beyond
this can compromise having a robust tenant mix strategy which is
being discussed later in this article. Choosing a flagship anchor is
all about creating both merchandising variety and enduring
categoric strength in the mall relevant to the primary target
segment. In-line stores depend on the anchor for sustenance and
cluster around it to get a piece of the footfalls. “Category Killer”
anchors can decimate retail competition for that product for miles
however require a ruthless blend of range, price and brand in a
particular segment or product a rare and difficult expertise.
3
large anchor within a mall space is dependent on the anchor
strategy, the spatial definition of mall core and siting of other in-line
shops. More often, wrong anchor placement can result in fringing
and inappropriate zoning thus causing in-line stores to loose
footfalls and ultimately pull out from a mall.
6%
69%
25%
A well-planned and executed tenant mix can help a mall sustain its
“destination” status even in the face of ferocious competition. The
objective of a tenant mix strategy is to maintain the delicate
balance between diversified product and service offering and
revenue imperatives of the leasing business. Jewelry and food
tenants typically pay the highest rentals while occupying the least
rental area. Books, Music, Apparel and footwear pay the next
highest rentals while anchors such as departmental stores pay 25-
30% of the per sq ft rentals of the in-line stores.
Malls also need to balance between the relatively modest price and
high range option of the food court with specialized and maybe
higher priced restaurants. Close to 40% of total GLA of a mall
should be occupied by in-line shops with each category not
occupying more than 5% of the total GLA. Globally apparel shops
occupy the highest GLA after Anchors and Entertainment.
4
5. Parking:
Dallas, TexasNorthPark
8 2,100,000 160 7,842 268
Centre
5
Apart from these key issues, a mall strategy will also include zoning
of tenants, mall maintenance strategy, competitive positioning, and
a promotion and marketing strategy for the entire mall off and
during festival seasons. Mall managements also need to manage
mall-wide tenant behaviour. A leading mall in Mumbai has tenants
opening and closing shop at varying times. To ensure mall visitors
know where they stand in terms of mall timings, malls should have
standard opening and closing times for all tenants- with
entertainment and food zones being the exception only.
Although there are many malls that have mushroomed in the Indian
context, the market is still ripe with opportunity. This is reflected in
the famous quote of John Wooden “It is not so important who starts
the game but who finishes it.”
Cedar Team
About Cedar
Cedar is a global consulting, advisory & analytics firm. With over 25 years of experience, it has assisted over a 1000 clients globally.
Formerly part of Renaissance Worldwide, a $1 Billion consulting firm, co-founded by the creators of the Balanced Scorecard. Cedar,
winner of the 2010, 2011, 2012, 2013 & 2014 Best Advisory Firm Awards, is US headquartered with 16 network offices worldwide.
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