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Shopping Mall Management
1
March 18, 2015 @ CUHK
Edward Yiu 姚松炎
Associate Professor, CUHK 中文大學副教授
Intended Learning Outcomes
• Introduction to Retail Sector of Real Estate
• Facility Management role in shopping mall success
• Illustrate the FM Concepts in Shopping Mall
Management
• Benchmarking of Shopping Mall Performance
• Corporate Real Estate Management – REITs
• Positioning Model – an Mall Ecosystem
• Cases Study
• Academic Research on Retail HK
HKRETAIL Research Team
Part 1
Introduction and the Retail
Sector of Real Estate
Take-up and Completion
Sources: Rating and Valuation Department (2014)
* forecasts
Year 2001 2005 2011 2013
Private Retail Stock
('000 m2) 9,063 9,521 10,750 10,844
Growth p.a. 2% 1% 0.7% 0.7%
Completion ('000 m2) 132 111 42 38
Take-up ('000 m2) 37 139 -7 -14
Vacancy ('000 m2) 751 980 859 782
% Vacancy / Stock 8.3% 10.3% 8.0% 7.2%
10,000
20,000
30,000
40,000
50,000
60,000
01 02 03 04 05 06 07 08 09 10 11 12 13 14
RETAIL_SALERETAIL_SALE_SA
Retail Sales Amount per month
Source: Census and Statistics Department
RS+158% in 15 years
Retail Sales Amount p.a.
Sources: Rating and Valuation Department (2014)
Year 2001 2005 2011 2014
Retail Sales Amount pa
(HK$000m) 184,386 204,619 405,733 445,525
Growth p.a. -1% 7% 25% -10%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
yoy Retail Sales Amt
Retail Rental Index
Source: Rating and Valuation Department (2015)
Retail Price Index
Source: Rating and Valuation Department (2015)
Retail Price to Rent Ratio
Source: Rating and Valuation
Department (2015)
0.0
100.0
200.0
300.0
400.0
500.0
600.0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Retail Rental
Retail Price
P+450%
R+80%
Indicators Growth from 2001 to 2015
Retail Sales Amt 150%
Retail Rent 80%
Retail Price 450%
Total Retail Spending by Visitors
Forecasts
No. of Visitors
(Planning Dept)
Per Capita
Spending
(HK Tourism Board)
Total Retail Spending by Visitors
(assumed 70% exp. on shopping)
2002 16,566,000 HK$ 5,000 HK$82,830 Million
2010 34,839,000 HK$ 6,000 HK$209,034 Million
2020 54,910,000 HK$ 7,000 HK$384,370 Million
2030 74,166,000 HK$ 8,000 HK$593,328 Million
HKRETAIL Research Team
Retail Sales Productivity due Visitors achieved $20,700 per m2 pa in 2010!
Almost double sale!!!
Visitors and Retail Sales Amt
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013
yoy visitors to HK
yoy retail volume HK
Retail Sales and Retail Rent
-30%
-20%
-10%
0%
10%
20%
30%
40%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
yoy Retail Rental Index
yoy Retail Sales Amt
Retail Rent Model
• Local
• Visitors
Consumers
• Income
• Exchange Rate / Tax
Retail Sales • Supply
• Monopolistic Rent
Retail Rent
Spending per
consumer
Sales per
square metre
(Productivity)
Supply per
person (Retail
Area per
capita)
Retail Price Model
• Actual
• Expectation
Retail Rent
• Interest rate
• Inflation rate
• Risk premium
Real Interest Rate • Liquidity
• Quality
• Management
Retail Price
+150% in retail sales
+80% in retail rent
RTTR = 6%-27%
+450% in retail price
Retail Sales per Consumer
Year 2001 2005 2011 2013
Total Retail Sales (HK$m) 184,386 204,619 405,733 494,436
Population (‘000) 6,730 6,838 7,108 7,222
No. of Visitors (‘000) 13,725 23,359 41,921 54,299
Equivalent to Daily Persons (‘000)
113 192 345 446
Total No. of Consumers 6,843 7,030 7,453 7,668
Retail Sales per
Consumer (HK$/pa) 27,000 29,000 54,000 64,000
Tourist Shopping Exp per
capita 1,630 1,804 3,186 3,413
Retail Sales Productivity
(HK$/sm/yr)
Sources: Rating and Valuation Department (2014)
Year 2001 2005 2011 2013
Total Retail Sales
(HK$m) 184,386 204,619 405,733 494,436
Private Retail Stock
('000 m2) 9,063 9,521 10,750 10,907
Retail Sales Productivity
20,258 21,488 37,596 45,332
RSP yoy -3% 6% 24% 11%
Retail Rental Index 96.3 103.6 140.6 169.2
RRI yoy -6% 7% 9% 7%
Efficiency Gain
by Mall Mgt
Retail Area per capita
Sources: Rating and Valuation Department (2014)
* forecasts
Year 2001 2005 2011 2013
Private Retail Stock
('000 m2) 9,063 9,521 10,750 10,844
Population (‘000) 6,730 6,838 7,108 7,222
Retail Area per capita 1.35 1.39 1.52 1.51
No. of Visitors (‘000) 13,725 23,359 41,921 54,299
Equivalent to Daily Persons (‘000)
113 192 345 446
Retail Area per capita 1.33 1.35 1.45 1.42
HKRETAIL Research Team
Part 2
Management Roles on
Shopping Mall Success
Management Role
• For other real estate properties, location
determines land rent dominantly.
• But the success of a shopping mall relies much
on management inputs.
• The following studies showed that mall rent
depends on management strategies, such as
tenant mix, shop size, promotional activities, etc.
• These management factors do not affect rent of
other real estate properties.
Retail Vacancy Rates
Category
District
Centre
Estate
Centre
Local
Centre
Shops in
Street
HK
Land
Overall
HK
Vacancy Rate in
2005 (%) 6.74 12.47 8.00 5.85 2.30 10.30
Sources: HK Land Annual Report, Link REIT (2005) & Rating and Valuation Department
1998 1999 2000 2001 2002 2003 2004 2005
Overall Hong Kong Retail
Vacancy Rate (%) 7.5 8.3 10.8 10.8 10.8 10.3
HK Land Vacancy Rate (%) 6.1 5.7 0.5 0.5 0.5 2.7 1.8 2.3
References
• Retail Rent Determinants – Hui, Yiu and Yau (2006) Retail Properties in Hong Kong: A Rental
Analysis, Journal of Property Investment and Finance, forthcoming
• Tenant Mix Performance – You, Crosby, Lizieri and McCann (2000) Tenant Mix Variety in
Regional Shopping Centres: Some UK Empirical Analyses, Discussion Paper, ICSC #0204, US.
– Yiu and Yau (2006a) Tenant Mix and Biodiversity, Discussion Paper, HKU, HK.
• Retail REITs Performance – Yiu and Yau (2006b) Are Retail REITs Performing Like Stock? – An
Empirical Study in Hong Kong, Discussion Paper, HKU, HK
– Yiu and Yau (2006c) Volatility Spillover between Retail REITs and Stock Exchange, Discussion Paper, HKU, HK
HKRETAIL Research Team
Source: Yuo et al. (2002)
Determinants (by Yuo)
Micro-determinants (by Tay)
Source: Tay et al. (1999)
Anchor tenants,
Chain stores,
proximity to
public transport,
frontage,…
Variables – see
next
Determinants of Retail Rent (Yiu
and Yau, 2006) -Variables
HKRETAIL Research Team
Cat. Symbol Unit of
Measure Descriptions
Rent R HK$ per m2
p.a.
Net rental income per unit area of the shop in the
Link 2004 per year
X
Age AGE Years Age of the shopping mall
Total floor area GFA m2 Gross floor area of the shopping mall
No. of shops NOS Each Number of shops in the shopping mall
Occupancy Rate OCR % OCR = (Occupied shop / No. of shops) x 100%
Efficiency Ratio EFR % EFR = (Lettable floor area / GFA) x 100%
P
District Centre DC Dummy DC = 1 if the mall is a district centre, zero otherwise
Estate Centre EC Dummy EC = 1 if the mall is an estate centre, zero otherwise
Local Centre LC Dummy LC = 1 if the mall is a local centre, zero otherwise
Shop SH Dummy SH = 1 if the mall is a shop on street, zero otherwise
Determinants of Retail Rent –
Variables (Cont’d)
Cat. Symbol Unit of
Measure Descriptions
L
Tseung Kwan O
TKO
Dummy TKO = 1 if the mall is located in Tseung Kwan O, zero
otherwise
Tuen Mun TMN Dummy TMN = 1 if the mall is located in Tuen Mun, zero otherwise
Tai Po TPO Dummy TPO = 1 if the mall is located in Tai Po, zero otherwise
Yuen Long YLG Dummy YLG = 1 if the mall is located in Yuen Long, zero otherwise
Kowloon East
KLE
Dummy KLE = 1 if the mall is located in Kowloon East, zero
otherwise
Kowloon West
KLW
Dummy KLW = 1 if the mall is located in Kowloon West, zero
otherwise
Kowloon Central
KLC
Dummy KLC = 1 if the mall is located in Kowloon Central, zero
otherwise
Kwai Chung
KWC
Dummy KWC = 1 if the mall is located in Kwai Chung, zero
otherwise
Ma On Shan
MOS
Dummy MOS = 1 if the mall is located in Ma On Shan, zero
otherwise
Hong Kong
Island
HKI
Dummy HKI = 1 if the mall is located in Hong Kong Island, zero
otherwise
Determinants of Retail Rent -
Results
HKRETAIL Research Team
Dep. Var. ln(R) OLS Method Sample 151
Variable Coefficient Std. Error t-Statistic Prob.
Constant 8.7162 0.3703 23.5400 0.0000
AGE -0.0296 0.0062 -4.7507 0.0000
GFA 1.51 x 10-5 0.0000 -1.8071 0.0730
NOS 0.0028 0.0013 2.0810 0.0394
OCR 0.0005 0.0033 0.1633 0.8705
EFR -0.0095 0.0032 -3.0043 0.0032
DC 0.3079 0.1701 1.8097 0.0726
LC 0.1265 0.1162 1.0881 0.2785
SH -0.4455 0.1305 -3.4145 0.0008
Adjusted R-squared = 0.4141 Durbin-Watson statistic = 2.0344 F-statistic = 7.2354
Same results as
Yuo et al. (2002)
Tenant Mix Performance (by Yuo)
Source: Yuo et al. (2002)
Tenant Mix Performance (by Yuo)
Source: Yuo et al. (2002)
Tenant Mix Performance
Source: Yuo et al. (2002)
Success
Determinants Determinants to A Successful
Shopping Mall
Location
Architectural
Design
Leasing Strategy
Promotional
Activities
Property
Management
Expenses /
Earnings
Age, Atmosphere, Image
Features, Style,
Facilities
Anchor Tenants,
Magnet Shops
Tenant Mix, Class of
Products
Theme, Catchments,
Target Groups
Discount Coupons,
Card Discounts
Variety Shows, Fun
Fair
Exhibitions, TV,
Displays, Games
Maintenance &
Operation
Security, Crowd &
Emergency Control
Cleanliness, IAQ, IEQ
Rental Level or
Shopping Costs
Turnover Rent or
Risk of Overpay
Vacancy rates,
Renewal terms
Size, Circulation,
Spatiality
Demographics,
Pedestrian Flow
Accessibility,
Transportation
Competition and
Demand
Asset
Management
Securitization
(REIT)
Disposition
(sublet, sell,
change use)
Positioning
Strategy
HKRETAIL Research Team
Part 3
A Global Benchmarking of
Performance of Retail
Markets
Retail Markets Performance
• Retail Area per Capita
• Retail Sales Productivity
• Occupancy Cost Ratio
HKRETAIL Research Team
Regional Retail Area Per Capita
Floor Space in 2004
(m2) Population
Ratio
(m2 per person)
Hong Kong 3,043,100 1,251,200 2.43
Kowloon 3,882,200 2,033,000 1.90
New Territories
2,482,500
3,551,400
0.69
Total 9,407,800 6,835,600 1.37
Source: Yiu (2005) based on data obtained from Rating and Valuation Department and
Census and Statistics Department
Retail Area per Capita – A Global
Benchmark
Countries 2002 GDP Per
Capita (US$)
Shopping Centre
(m2 per person)
Total Retail
(m2 per person)
United States (2003) 35,750 2 3.9
Australia (2003) 28,260 0.6 2.0
United Kingdom (2000) 26,150 0.3 1.4
Hong Kong SAR, PRC (2003) 26,910 N/A 1.3
South Korea (2002) 16,950 N/A 1.3
Singapore (2003) 24,040 0.4 1.1
Japan (2002) 26,940 0.3 1.1
Source: Baker (2004)
Sales Productivity – A Global
Benchmark
Year Hong Kong U.S.
All Anchors
Canada
BOREALIS REITs Australia
All Anchors
Sales Productivity
(in local currency and
uom)
HK$20,362.9
psm US$192 psf C$431 psf US$263 psf
Conversion 1US =
7.8HK$ 1sm=10.764sf
PPP (US-CAN)
= 1.21
PPP (US-CAN)
= 1.32
Sales Productivity
(US$ per m2 per annum ) 2,611 2,067 3,866 2,831
Sales Productivity – by store type
in the US, Canada and Australia
Source: Baker (2004)
Occupancy Costs of Shops in HK
Operating Costs 2003
(HK$ M)
2004
(HK$ M)
2005
(HK$ M)
2005 Unit Cost
(HK$ per m2)
% Total
OP Cost
Property Management 401 409 405 231.99 21.51%
Public Utilities 350 355 362 207.36 19.22%
Salary 484 382 264 151.22 14.02%
Cleansing and Security 211 235 252 144.35 13.38%
Repair and Maintenance 230 210 162 92.80 8.60%
Marketing and Promotion 99 131 140 80.19 7.43%
Other direct expenses 67 75 121 69.31 6.43%
Overheads 122 117 108 61.86 5.74%
Land Rent and Rates 72 78 69 39.52 3.66%
Total 2,036 1,992 1,883 1,078.62
Source: Link REIT (2005)
Occupancy Cost Ratios – A
Global Benchmark
Country / City Occupancy Cost to Sales Ratio
U.S. 13% (9%-16%)
Australia 14.8% - 16.5%
Hong Kong (Jewelry) 9.21% - 10.83%
Hong Kong (Apparel) 11.01% - 41.30%
Hong Kong (Department Store) 7.86% - 22.47%
Source: Baker (2004), Daniels and McDonnell (2003); Petty (2004)
Rent to Turnover Ratio (RTTR) –
A Benchmark of Listed Co.
Source: https://ecyyiu.wordpress.com/2011/09/19/e-book-on-hk-retail-sales-
productivity-and-rent-to-turnover-ratio/
Type of Retailing RTTR (%) RSP (HK$/sf/yr)
Department Store 26.4 2,310
Apparels 25.7 5,332
Restaurant 19.2 ~6,000
Travel Agency 15.3 7,382
Tuition School 14.5 8,460
Bag 5.7 109,242
HKRETAIL Research Team
Part 4
Corporate Real Estate
Management of Malls -
REITs
REAL ESTATE IS REAL
DIRECT
REAL ESTATE
Mortgages /
Collaterals
(Leveraged) MBS / REITs /
ABS
(Leveraged) CDO / CDS /
Minibonds
(Leveraged)
MBS/REITs/ABS CDO / CDS / Minibonds
DERIVATIVES – Less Tangible REAL ESTATE -
More Tangible
AAA
DIRECT
REAL ESTATE MORTGAGE
?
Real Estate
Finance
Direct Real
Estate
Spot markets
Sale &
Purchase
Rental
Developmen
t
Land
Auction
Forward
contracts (Pre-
sales)
Sales
Strategies
Financing
Bond
Mortgage /
Reversed
Mortgage
Collaterals
BOT / PPP /
Project Finance
Stocks
Developers REITs MBS / ABS
Derivatives
Index
derivatives
Futures
Options
Swap
Funds /
Bonds
CDO
CDS
Others
Real Options Portfolio
Investment
MBS: Mortgage-backed Securities
ABS: Asset-backed Securities
CDO: collateralized debt obligation
CDS: credit default swap
REAL ESTATE ECONOMICS AND FINANCE
45
REITs in Asia-Pacific
Introduced
Australia Hong Kong Japan Singapore South Korea
1971 2005 2001 2003 2002
No of Reits 50 6 23 7 6
Market Cap (US$ bn) 80 8.7 20 10 0.3
Development 1971 No No No
Tax Transparency Yes No Yes Yes
Foreign Assets Yes (Yes) Yes Yes
Distribution 50% 90% 75% 90% 100%
No
Yes
Yes
source: DTZ, 2005
46
Current REITs in Hong Kong
Name of REIT # Capitalization on
30-Apr-07 (US$) Date Launched
The Link REIT (823) 4.9 billion 25-Nov-06
Prosperity REIT (808) 0.3 billion 16-Dec-05
GZI REIT (405) 0.4 billion 21-Dec-05
Champion REIT (2778) 1.6 billion 24-May-06
Sunlight REIT (435) 0.4 billion 21-Dec-06
Regal REIT (1881) 1.1 billion 30-Mar-07
Total Value (Hong Kong) 8.7 billion (6)
Compared with US 200 billion (171) Since 1960
Compared with Australia 50 billion Since 1971
Source: Yau et al. (2007)
47
REITs
• REITs, real estate investment trust, is essentially a trust owning a portfolio of physical real estate.
• Thus, investing in a REIT is investing real estate assets, such as shopping centres, offices, hotels and housing.
• Rents collected from tenants are distributed to investors on a regular basis in the form of dividends.
• REITs are investment vehicle and investment tools with moderate risk.
Source: Vigers 2005
48
• In the form of a Trust
• All kinds of real estate： Shopping Centres Offices Hotels Housing Car-parks
• Liquid • Divisible • Moderate Risk • Flexible and Tradable at Stock Ex
REITs’ Benefits
49
• Development Financing
• Higher Asset Value Appraisal
• Retain Ownership
• Diversifications
REITs’ benefits for
developers
50
• Non-lumpiness
• Internally Diversified
• Transparent
• Stable
• Liquid and divisible
REITs’ benefits for
investors
51
Inve s tors
HK - REITs
Investm ent D ividend
P roperty A ssets
Incom e
P roperty
M anagerP roperty
M anagem ent
Trustee
A sset
M anagem ent
D esignate O w nership
M onitoring
M anagem ent
C om pany
H olding Fund
Fees
Operations
0823 LINK REIT
Why outperform HSI?
0435 Sunlight REIT
Why outperform HSI?
HKRETAIL Research Team
Part 5
Mall Positioning Strategy
An Ecosystem Metaphor
• Mall is an eco-
system (a platform)
for predators
(retailers) and preys
(shoppers) to coexist
and prosper.
Ecosystem Model
Developer
Retailer
Location
Leasing
Agent Shoppers Forces
Properties
Interactions
Flow
pathways
Feedback
loops
• “In the ecosystem of
shopping where species
continuously breed, are born,
adjust, mutate, age, and die,
shoppers move through the
patches and corridors of
shops looking for food,
clothing, and toys, with
senses heightened like
animals searching the land
for sustenance.” Cha (2001,
p.322)
Shopping Mall’s DNA
• Shopping malls are living creatures with a
“shopping mall’s DNA”. (Underhill, 2004,
p.143)
Mall Genes
PATRONS
RETAILERS
MPS
Vacancy
Rent
Shoppers
Sale
Expenses
Location
Arch.
Design
Leasing
Strategy
Prom.
Activity
Prop.
Mgt
• Six chemicals linked in a long chain and represents the unique genetic codes of a mall.
• The six genetic codes are Location, Architectural Design, Leasing Strategy, Promotional Activity, Property Management and Expenses.
Yiu (2007)
Macro
• Macroscopic system
refers to the coopetition
among eco-systems
themselves
• The supply and demand
of predators and preys
and
• the “fittest to be survived”. MP
S
MP
S
MP
S
Yiu (2007)
Micro • L, A, S, P, M, E.
• Variations of the
genetic codes are
responsible for the
unique
characteristics
and the success
or failure of a mall.
Mall
Gene
E
L
A
S
P
M
Yiu (2007)
Dynamic Adaptation
Process
• The Myth of Excellence!
• Survival strategies of
different species can be
very different.
• A pattern of an ecological
community is resulted from
interspecific interactions
Community Patterns
Evolutionary
Process Physiological
Constraints
Historical
Events
Regional Species
Pool
Interspecific
Interactions
Species Composition of
the Local Community
Habitat Selection Dispersal Ability
Mall Positioning
Strategies • Magnetic,
• Coopetitic,
• Specialistic
• Parasitic
Golden Resource shopping mall
Year Open : 2004
Location : West of Beijing
GLA (sq.m.) : 6million
Total Area (sq.m.): 7.3million
The largest shopping mall in the world
Yiu (2007)
Magnetic Malls • Attract new predators and preys to settle in this
breeding field.
• It draws from a much larger catchments area than their counterparts in the district. – good location with easy accessibility,
– large areas of catchments,
– strong consumption power demographics,
– high variety of tenant mix, and
– a great size of mall to accommodate anchors and tenants
Yiu (2007)
Year Open : 2001
Location : Abu Shagara
GLA (sq.m.) : 800,000
Total Area (sq.m.) : 400,000
No. of shops : 120 (4 Floors)
Sharjah Mega Mall
Coopetitic Malls • Confronts directly with the current and potential
cooperators and competitors in the same district.
• The success of a coopetitic mall rests on its own strength relative to their competitors, and
• the complementary synergy among cooperators. – It focuses on district catchments,
– a relatively good mix of the parameters enables a coopetitic mall to be successful,
– especially when the class of products and the target shoppers are clearly differentiated from its competitors.
Yiu (2007)
Specialistic Malls • Relies on the product and theme specialization
strength of the mall.
• When the location and demographics are not good for retailing and the current competitions are keen,
• the specialistic mall strategy attempts to draw a much larger catchments area by specializing the mall.
• It also requires a good accessibility or parking provision.
Yiu (2007)
Parasitic Malls
• Takes the advantages of the current
spatial distribution of other eco-malls,
• which have already created a very
prosperous retailing market in the district.
• It provides a good way of survival for very
small mall with high constraints in
providing tenant mix.
Yiu (2007)
5-macroscopic
positioning metrics • Population Growth
(PG),
• Consumption Power (CP),
• 1/Retailing Area per Person (AP),
• 1/Supply of Retailing Area (SU), and
• 1/Vacancy of Shops (VA).
SU AP
MAGNETIC
VA CP
PG
Yiu (2007)
5-microscopic
positioning metrics • Accessibility (A),
• Catchments (C),
• Mall Size (S),
• Tenant Mix (T), and
• Capital Investment (I)
C
T S
MAGNETIC
I
A
Yiu (2007)
Specialistic
CP
SU AP
SPECIALISTIC
VA
PG
T S
SPECIALISTIC
I
A
C
Yiu (2007)
MPS
Vacancy
Rent
Shoppers
Sale
Expenses
Location
Arch.
Design
Leasing
Strategy
Prom.
Activity
Prop.
Mgt
Demographic
s
Patrons Catchments
Consumption
Power
Tenant Mix
Size
Feedback
Simulation
Model • Catchments
• Shoppers
• Patrons
• Sale
• Rent
• Profits
Yiu (2007)
Case Study 1: Citygate Outlet
Case Study 2: World Trade
HKRETAIL Research Team
Part 6
Academic Research on
Shopping Malls and Retail
in Hong Kong
Academic Research
• Yiu, C.Y. (2010) The Impact of A Pedestrianisation Scheme on
Retail Rent: an empirical test in Hong Kong, Journal of Place
Management and Development, 4(3), 231-242,
10.1108/17538331111176057,
• Yiu, C.Y. and Ng, H.C. (2010) Buyers-to-Shoppers Ratio of
Shopping Malls – A Probit Study in Hong Kong, Journal of Retailing
and Consumer Services, 17, 349-354.
• Yiu, C.Y. and Xu, S.Y.S. (2010) A Tenant-Mix Model, European
Journal of Marketing, 46(3/4), 524-541.
• Yiu, C.Y., Xu, S.Y.S. and H.C. Ng (2008) Tenant Placement and
Space Allocation of High-rise Shopping Malls, Journal of Retail &
Leisure Property, 7(4), 315-324.
Pedestrianisation Effect on
Retail Rent
Independent Variables Coefficient t-Statistics
Constant 14.78 103.43* Age 0.005 1.71*** Size 0.005 9.79*
Frontage 0.15 8.96* Layout 0.03 0.65
Distance to MTR 0.13 2.03** Corner Site -0.54 4.39* PS x PRE 0.48 5.19*
(1-PS) x (1-PRE) 0.45 5.38* PS x (1-PRE) 1.1 12.32* Adj R-squared 0.51
No. of Obs. 330 Dep. Variable ln (Rateable Value)
Pedestrianisation Effect on
Retail Rent
PS x (1-PRE) 1.10 (1-PS) x (1-PRE) 0.45
PS x PRE 0.48
(1-PS) x PRE 0 1.1-0.45-0.48
Net Effect of PS 17%
Buyer-to-Shoppers Ratio Name of the mall NTP MT TMTP Average
PANEL A: Weekdays
No. of observations 60 60 60 60
Apparels 20.0% 20.0% 23.3% 21.1%
Audio video/electrical 13.3% 16.7% 10.0% 13.3%
Pharmacy/health care 61.7% 48.3% 48.3% 52.8%
PANEL B: Weekend
No. of observations 30 30 30 30
Apparels 20.0% 40.0% 46.7% 35.6%
Audio video/electrical 30.0% 23.3% 13.3% 22.2%
Pharmacy/health care 56.7% 63.3% 60.0% 60.0%
Buyer-to-Shoppers Ratio
Dependent variable: Buyer
Included observations: 810
Variable Coefficient z-Statistic
Constant −2.25 −9.73*
Staying time 0.12 10.88*
Female (cf male) 0.03 0.32
Apparels 0.71 4.87*
Pharmacy/health care 1.46 10.55*
Weekend (cf weekday) 0.25 2.31**
Teenagers (cf elderly) 0.30 1.68***
Adults (cf elderly) 0.26 1.50
NTP −0.02 −0.15
MT −0.06 −0.44
Tenant Mix Model
Tenant Mix Model
Largest Malls (GFA) 2008 Shopping mall Year opened GFA (m2) GLA (m2) No. of shops
South China Mall, Dongguan, China 2005 892,000 660,000 1,500
Berjaya Times Square, Kuala
Lumpur, Malaysia 2005 700,000 320,000 1,000
Golden Resources Shopping Mall,
Beijing, China 2004 680,000 560,000 >1,000
Dubai Mall, Dubai, United Arab
Emirates 2008* 590,000 377,000 1,200
West Edmonton Mall, Alberta,
Canada 1981 570,000 350,000 800
Beijing Mall, Beijing, China 2005 440,000 320,000 600
Cevahir Istanbul, Istanbul, Turkey 2005 420,000 348,000 280
Zhengjia Plaza, Guangzhou, China 2005 420,000 270,270 >1,000
SM Mall of Asia, Pasay City,
Philippines 2006 386,000 386,000 1,000
SM City North Edsa, Quezon City,
Philippines 1985 331,800 270,270 900
SM Megamall, Mandaluyong City,
Philippines 1991 331,600 324,300 800
Yiu, C.Y., Xu, S.Y.S. and H.C. Ng (2008)
Highest Malls (Storey) 2008
Yiu, C.Y., Xu, S.Y.S. and H.C. Ng (2008)
Name of the shopping mall No. of storey* (B=basement
level; /F=floor level)
Mega Box, Hong Kong 19 (G/F to 18/F)
Langham Place, Hong Kong 15 (B2 to 13/F)
Living Mall, Taiwan 15 (B3 to 12/F)
Times Square, Hong Kong 15 (B2 to 13/F)
Dream Mall, Taiwan 12 (B2 to 10/F)
Berjaya Time Square, Kuala Lumpur, Malaysia 11 (LG/F to 9/F)
APM, Hong Kong 11 (B4 to 6/F and 11/F)
Marunouchi Building, Japan 11 (B1 to 8/F and 35/F, 36/F)
New Town Plaza, Hong Kong 10 (B2 to 8/F)
Osaka Garden City, Japan 9 (B2 to 7/F)
Zhengjia Plaza, Mainland China 9 (B1 to 7/F)
TaiMall, Taiwan 9 (B2 to 7/F)
Shin-Marunouchi Building, Japan 8 (B1 to 7/F)
Grand Century Plaza, Hong Kong 7 (1/F to 7/F)
I-square? The One?
LFA and Floor Level
Yiu, C.Y., Xu, S.Y.S. and H.C. Ng (2008)
LFA and Floor Level
Yiu, C.Y., Xu, S.Y.S. and H.C. Ng (2008)
Variable Coefficient t-Statistic
C 10.1766 0.1473
FL 9.7011 1.7375***
M1 (TS) 94.9646 2.6597*
M3 (GCP) 120.9038 2.9902*
TBn various various*
Dependent variable: LFA
Sample: 1,653 IF FL>0
Included observations: 569
Floor Level and Non Impulse
Shops
Yiu, C.Y., Xu, S.Y.S. and H.C. Ng (2008)
Variable Coefficient Std. error z-Statistic Prob.
C -0.9962 0.1130 -8.8147 0.0000
FL 0.0494 0.0168 2.9362 0.0033
Shopping mall
No. of shops of
non impulse
trade
No. of shops of
impulse trade Coefficient of FL Prob.
M1 (TS) 26 155 0.3201 0.0000
M2 (LP) 45 139 0.0094 0.7316
M3 (GCP) 64 140 0.3905 0.0000
Dependent Variable: Non Impulse Trade
Sample: 1,653 IF FL>0
Included observations: 569
