Page 42 - RLI February 2019

RLI LEISURE INSIGHT

HOW CAN THE RIGHT LEISURE

EXPERIENCE ADD VALUE?

IN THIS ISSUE’S LEISURE INSIGHT, ALISON REHILL-ERGUVEN,
CEO OF PRADERA RETAIL ASIA IN CHINA TAKES A LOOK HOW
ONLY THE RIGHT LEISURE EXPERIENCE WILL ADD VALUE TO
RETAIL ASSETS AROUND THE WORLD.

n recent years the words ‘leisure’, ‘entertainment’, and ‘food & A perfect example of a concept working within a larger scheme
beverage’ (F&B), have become buzzwords throughout the retail is that of the Shanghai DUNGEON within Mosaic Shanghai.
Iproperty industry. Structural change caused by the rapid rise of Already a recognised landmark in London and 12 other cities
online shopping, smartphones and click & collect, has left those managing around the globe, The Shanghai DUNGEON opened in October
retail assets racing to incorporate new leisure and entertainment last year and has become an important destination on Shanghai’s
concepts. If you offer experiences that can’t be replicated online, would Entertainment and Leisure map. With its 10 themed experiences
footfall, tenant sales, and rents not automatically? The answer is - not featuring immersive storytelling professionals, visitors are able to
necessarily - and careful planning is required. see, hear and smell the ten legends of old Shanghai’s colourful past
In our view, some landlords and asset managers seem to have and enjoy a thrilling drop ride.
lost direction. In the rush to incorporate leisure or entertainment Full aquariums and even smaller scale aquariums require a study
concepts as quickly as possible, adequate time isn’t necessarily to ensure the structure can handle the weight of the fish tanks, as we
allocated towards strategic thinking. Important questions around have recently experienced with the Oceans of Colours aquarium,
which concepts will work and unlock value at retail destinations which opened on Mosaic Xi’an’s ground floor in September last year.
are not always adequately considered. Taking into consideration these types of constraints early can save
Often exciting new concepts have failed to move the dial on significant time and abortive design costs. From an asset management
footfall and therefore on asset performance. There is no specific perspective, consideration must also be given to reconfiguration
formula for incorporating the right leisure format, but there are works. Questions such as: where can new leisure concepts be placed
universal steps that should be taken. to best drive footfall and how can more effective wayfinding facilitate
Firstly, don’t expect every leisure or entertainment concept to work this? What will the impact on existing tenants be?
in every retail asset. There is no ‘one size fits all’ approach. The first Incorporating new concepts may indeed be exactly what is
fundamental step is to understand the demographics of the population required to turn a shopping centre around, but the cash outlay
surrounding your retail asset and introducing concepts that will align to could be significant on both sides of the equation which is why
their interests. If the catchment area has a higher millennial or younger taking the time to do detailed analysis is important.
population, concepts such as private cinema rooms for small groups, At Cevahir Shopping Centre in Istanbul, reconfiguration works
or virtual reality, are two examples of good options. In a more family were undertaken to include Turkey’s largest indoor amusement
dominated area, trampolining, adventure playgrounds or kids-focused park. These are innovative new initiatives for the retail assets,
edu-tainment (blending learning with play) will be more relevant. But a however it is important to ensure buy-in was given from all
decision on which type of leisure activity is incorporated should not be parties. In-depth due diligence was required to build the necessary
made until relevant market research has been undertaken. confidence to make it happen.
Furthermore, floor space typology is another important Another common mistake some landlords and asset managers
consideration. Which leisure, entertainment or F&B concepts will make is seeing leisure as a replacement for traditional anchors, such as
work in the space? For example, quality trampoline parks demand major department store chains. In general, leisure concepts should be
a minimum ceiling height of five metres. The latest Virtual Reality one of many ‘mini anchors’, and form part of the overall tenant mix
attractions allow guests unrestricted movement around a room, that drives traffic to an asset. If a shopping centre is being reconfigured
however to do this they require an open plan space free of columns. to include a children’s amusement park, is it complemented with family
friendly food and beverage outlets and retailers? Is there “branded
playground” retail space, where physical space allows people to touch
and experience what they may ultimately buy online?
Attention must also be paid to the lifecycle of a new
concept before it is introduced. Trends come and go, and some
entertainment offerings will never be more than fads, whereas
other concepts such as aquariums, are easier to update and will
be more timeless. One way of minimising this risk is working with
concepts that have proven intellectual property.
One final challenge for retail operators is to find an economic
balance as many of the leisure and entertainment operators will
not support the same level of fixed rental paid by traditional
retailers. Therefore, an active asset management strategy which
drives rental levels on the surrounding units supported by
increased footfall is imperative.
In order to adapt to the fast-paced changes sweeping through
our industry retail destinations must become more than places
to just ‘buy stuff’. Providing experiences you can’t find online, or
experience at home, is undoubtedly a large part of the answer.

38 RETAIL & LEISURE INTERNATIONAL FEBRUARY 2019