Full Members

Choy Lok Sze LouiseChu Kin Yee JennyLi Wan Hing

Associate Members

Chung Wai Hing ElvinaLai PrimusLau Pak Hang

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All Board members and Honourable members Mr.

Raymond Kwok, Mr. Michael Tien, Dr. Roger C.K.

Chan, Professor Rebecca L.H. Chiu, Professor

Eddie C.M. Hui, Professor Sin Yat Ming, Dr. T.M.

Kwong, Mr. Jimmy C.W. Wong, Mr. Kendrew C.Y.

Leung welcome the following new members :

Membership Info

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It is my honour to be elected as the Director of Internal

Affairs and take up the role of expanding the membership

base of the Institute.

It has been eleven years since I joined the Institute.

Looking back, I was a newcomer to shopping centre management at the time. Through

participating in the many activities of the Institute including seminars and study tours, I

did not only further my professional knowledge but also connect with many colleagues

from the industry, some of whom have become good friends of mine.

As my involvement in the Institute grew, I was pleased to have the opportunity to

take part in organising the Institute's annual dinner banquet, and to witness the event

grow in scale from year to year. It is now a highly-anticipated annual gathering among

the industry peers who socialise and reconnect at the event. This year, I have the

opportunity to be part of the Annual Dinner Committee again to help organise the

event. I hope you will save the date and join us on 17 March to support the Institute.

Speaking of the Institute's Membership base, 76% of the membership base consists of

real estate developers and property management companies, with the majority of the

members being professionals in senior management roles. However, the Institute has

been actively expanding its membership base in recent years. We welcome industry

peers from property agency, retailers, food and beverages operators to join the Institute

for broader exchange in business and management. In addition, we also visit local

tertiary institutions to promote the Institute, in the hope of attracting more new talents to

join the industry.

Last year, the Institute sought to recruit new members through organising activities

such as exchange and sharings, study tours and scholar seminars, which were

met with enthusiastic response. This year, we are looking to utilise social media or

interactive games at events to effectively attract new members to the

Institute. Please share this message with your colleagues and friends, and

join us to grow with the Institute.

Margaret Lau

Director of Internal Affairs (2016-18)

New beginnings, fresh starts and promises for a brighter future all come to mind as we ring in a New Year. Despite the fact that 2016 was a challenging year for shopping centre management, they are always flexible in turning risks into opportunities.

While the retail industry refocuses on local consumption and millennial shoppers, shopping centres have been revamping their tenant mix and bringing in new brands and concepts such as applying the latest Virtual Reality (VR) and Augmented Reality (AR) technology to get customers interested in the merchandise and in the mood to purchase. But, what else? Our Focus Feature may give you the clues. Besides, Market Updates would touch on the expansion of the least-affected F&B sectors during the economic slowdown.

Our Director of Internal Affairs, Ms. Margaret Lau, who is also our Fellow Member, writes us a message on her plans in expanding our Membership base. Let's join us and learn from each other. We wish you enjoy reading this issue and welcome your comments.

Thank you.

Editorial

Message fromthe Institute

Website：www.iscm.org.hkEmail：contactus@iscm.org.hk

Give us Feedback

Our Membership is open to any individual person who is a practitioner in shopping centre industry. Students who have enrolled in the course of shopping centre management at HKU School of Professional and Continuing Educa t ion ( HKU Space ) w i l l a l so be considered .

Grade of Membership Annual FeeFellow Member HK $ 1,500Full Member HK $ 1,000Associate Member HK $ 650Student Member HK $ 250

Online application can be completed at the following link:

www.iscm.org.hk

Membership Application

The BoardPresident Maureen FungChairman Baldwin KoVice Chairman Victor NgVice Chairman Katherine HoVice Chairman Wendy ChengTreasurer Chris KeungHonorary Secretary Michelle LeeDirector of Training Louis LeeDirector of Internal Affairs Margaret LauDirector of External Affairs Angie Chung

13th Anniversary Annual DinnerFriday, 17 Mar 2017

Scholar Seminar Series IIIFriday, 19 Jan 2017

Upcoming

Venue : Grand Ballroom, Conrad Hong Kong

For seat reservation, please visithttp://www.iscm.org.hk/AD17

Topic : Compulsory Sale for Redevelopment and

Related Retail Valuation Issues

Speaker : Sr . Dr . Lawrence

P o o n , S e n i o r

Lecturer, Division of

Building Science and

Techno logy, C i ty

University of Hong

Kong

ContentsEditorial/Message from the Institute 1Institute News 2Market Updates 5

Focus Feature 6Membership Info/Upcoming 8

商場管理學會 Institute of Shopping Centre Management

We had our 12th annual general meeting (AGM) on 15 December 2016. Our Board of Directors have

made their reports for the year 2015-16. On that evening, our Chairman Mr. Baldwin

Ko also presented the certificates to our newly joined members and welcomed

their joining our institute.

Our Insitute was honoured to present three renowned scholars from Hong Kong as guest speakers at our “Scholar Seminar Series”, where they shared their insights on shopping centres and other retail related topics.

Hong Kong's retail market is changing at a rapid pace. As shopping centres face a wider range of challenges than ever, what would be the key to success for them? Prof. Eddie Hui, Department of Building and Real Estate, the Hong Kong Polytechnic University was the featured speaker at the first seminar of the series, themed “Success Factors for Shopping Malls”, on 17 November 2016.

According to Prof. Hui's analysis, the three important factors of success for shopping centres are creativity and inspirations, the enriching of shopping experience, and the enhancement of shopping variety. The industry must continuously upgrade their software and hardware. For instance, some shopping centres in the Mainland have set up the “Family Corner” at the venues. At these family corners, the children may have a fun time playing video games together

with their father, while their mother goes shopping. Some overseas shopping centres have even constructed indoor artificial beaches.

The second seminar of the series was on 25 November 2016. Our speaker Prof. Rebecca Chiu, Head of Department of Urban Planning and Design of the University of Hong Kong, spoke on the topic of “Social Roles of Neighbourhood Shopping Centres”. The seminar was attended by close to 60 ISCM members and industry professionals.

She mentioned that given the city's population density, there are shopping centres in every housing estate or residential area. Shopping centres are not only venues for shopping, but a space for socialising and leisure for local residents, which makes it part of the community. Prof. Chiu noted that shopping centres are part of urban planning. For instance, “Jolly Place”, a“Senior Citizen Residence”, is connected to several shopping centres, offering leisure to the elderly at their convenience.

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ISCM to Host CASC Annual Conference 2017 in Hong Kong

12th Annual General Meeting

Our Founding Chairman and President Ms. Maureen Fung joined the panel discussion of "Future of Shopping Malls Business Conference and Exhibition" organised by Hong Kong Airport Authority held in the Hong Kong Convention and Exhibition Centre on 17 Oct 2016.Other speakers included Mr. Anthony Lau,

Executive Director of Hong Kong Tourism Board, Ms. Angelene Chan, DP Architect and its group of companies, Ms June Lo, Asia Pacific Operations, International Association of Amusement Parks and Attractions and Mr. Adam Rush, Executive Director, Consulting Department, Greater China, DTZ/Cushman & Wakefield.

Mr. Kevin Kwan, LonMark International, Ambassador in Asia Pacific and China Region, to have given our members and friends a nice presentation on "Internet of Things, Fast and Easy with Building

Management System--The applications in Shopping Mall" on 29 October 2016. Our Vice Chairman Ms. Wendy Cheng joined and presented Mr. Kwan a souvenir as a token of appreciation.

Future of Shopping Malls Business Conference and Exhibitions by HKAA

Internet of Things the Mega Trend

Renowned Scholars at Thematic Seminars on Shopping Centres

Our President and Founding Chairman Ms. Maureen Fung, Vice Chairmen Mr. Victor Ng and Ms. Wendy Cheng and Treasurer Mr. Chris Keung attended the Annual CASC Conference held in

Kaohsiung from 7-9 Dec 2016.

Ms. Maureen Fung was proud to announce that our Institute will host the annual conference of Council of Asia Shopping

Centres (CASC) in the 4th quarter of 2017. The CASC Conference is one of the most significant industry events in the Asia Pacific region and our Institute was the host of the same event in 2009.

More than 300 industry players from Asia attended the CASC Conference held in Kaohsiung in December 2016.

On the right is Wong Hong Rong, Deputy Director General, Economic Development Bureau, Kaohsiung City Government.

Highlight programmes including gala dinner and bus tour were arranged.

Maureen Fung joined the panel discussion of "Future of Shopping Malls Business Conference and Exhibition" organised by Hong Kong Airport Authority.

Our President and Founding Chairman Ms. Maureen Fung, Vice Chairmen Mr. Victor Ng and Ms. Wendy Cheng and Treasurer Mr. Chris Keung attended the CASC annual meeting in Kaohsiung.

CASC Board Members met at the Annual Conference in Kaohsing.

Our Board of Directors joined the members in a group photo at the AGM.

Mr. Ip Siu-chuen, our Chairman of Training Committee, presented a souvernir to Prof. Hui.

Our Vice Chairman Mr. Victor Ng (second from the right), Honorary Secretary Michelle Lee and Director of Training Louis Lee joined the seminar presented by Prof. Chiu (second from the left).

Mr. Kevin Kwan talked on the application of Internet of Things on shopping centre management.

Our Welfare Committee organised a Guided Tour to REFUSEE - Sergey Ponomarev Photo Exhibit ion at F11 Photographic Museum on 12 November 2016.

Sergey Ponomarev is the winner of 2016 Pulitzer Prize and the first prize of the 2016 World Press Photo Contest. Our participants found both his works on European refugee crisis and the F11 Photographic Museum impressive and inspiring.

Thanks to the sponsorship from Broadway Cinema and the support f rom apm shopping centre, Our CSR Committee arranged a pre-Christmas film watching show for 60 kids from St. Christopher's

Home in the morning of 17 Dec at Palace apm. This was the second mega CSR event our Institute after the New Year eve party arranged for the children from the low income families in 2013. Our Advisory

Board Member Mrs. Teresa Shiu and our Vice Chairman Ms. Wendy Cheng had joined and welcomed the kids.

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Food and Beverages Industry Blooming with Fresh Ideas

Pulitzer Prize Photo Exhibition

Film Watching Show for Children from St. Christopher's Home

Our Institute has arranged a Study Tour to Tokyo from 13 to 16 October 2016. Meetings were arranged with renowned retail and F&B groups including Blue Bottle Coffee, Dover Street Market Ginza, Daikanyama T-site and BEAMS JAPAN while management or representatives have shared their successful business models with our participants. Besides, guided visits were arranged to brand new and upmarket shopping malls including Sky Tree, Tokyu Plaza Ginza, NeWoman,

Lumine Shinjuku & Lumine Est and composite developments

such as Futako Tamagawa Rise and Shin-Marunouchi

Building.

Study Tour to Tokyo

Our participants found both Sergey Ponomarev's works on European refugee crisis and the F11 Photographic Museum impressive and inspiring.

Our Study Tour to Tokyo was well received by the participants.

Kids from St. Christopher's Home enjoyed a great film show organised by our CSR Committee.

Our Advisory Board Member Ms. Teresa Shiu welcomed the kids.

T he Korean dark cloud ice-cream and the small novel café are the latest

trends in food and beverage (F & B), where some of the recent additions in town are new brands from overseas. The F & B industry is blooming with fresh ideas, as the overseas brands have grasped Hong Kong people's appetite for dining out and novelties, and they are capitalising on the lowering rentals in Hong Kong to expand their business.

According to JLL's report, in the leasing market, mid-range and lifestyle retailers along with F&B operators remained as the main source of demand. New-to-market brands and gastronomic groups also continued to show keen interest in opening their debut stores in Hong Kong. Looking ahead, demand is likely to remain dominated by these players.

Mr. Simon Wong, Chairman, Hong Kong Federation of Restaurants and Related Trades remarks that the total turnover of the F & B industry in 2016 is expected to achieve a 2% to 3% increase, which is lower than that of 5% to 8% in the previous year. Venues for high-end consumption such as hotels are expected to be harder hit by the decline. However, specialty restaurants targeting young people are more resistant to the decline, since market fluctuations have minimal impact on the consumption sentiment of young people.

He notes that in the past year or two, Taiwanese and Korean styled specialty restaurants have been extremely popular among young people, since the ingredients and presentation of their cuisines are appealing to young customers. He also pinpoints that while the rentals of first-tier shops are falling, these areas are not popular among restaurant tenants whose rentals are generally stable. Food and beverages groups have greater bargaining power, and they may seize the opportunity to expand their business at this time. However, a drop in turnover is forecasted for the overall food and beverages market in 2017.

Business Growth for Specialty RestaurantsMr. Kevin Lam, Executive Director Retail & Office Service, Cushman & Wakefield quotes from the government's statistics and notes that in the second half of 2016, the sales of Chinese restaurants recorded a lower than 0.5% increase, while Western restaurants and cafés recorded a 5% to 6% growth. This points to a gradual increase in specialty restaurants targeting the public and young people.

Mr. Lam states that specialty restaurants are a popular t rend nowadays. In changing its trade mix, shopping centres are seeking to increase the number of F & B tenants, which leads to a greater

variety of shops for food and beverages operators to choose from. He adds that the daily life and entertainment of Hong Kong people revolve around food, and it is reflected in the consistently strong demand.“When the food and beverage operators see a good range of shops to choose from as well as strong spending power in the market, they will consider expanding their business.”

He mentions that a growing number of overseas brands are quartering in Hong Kong, while some Hong Kong operators have bought the franchise of overseas brands in recent times. The arrival of new brands in Hong Kong brings fresh vitality and appeals to consumers. He mentions that these overseas brands encompass categories such as ice-cream, candies, Korean coffee, and health-conscious bread, which are all popular among the locals.

He predicts that specialty restaurants like cafés and bars will achieve a 5% to 6% growth in the second half of the year, while more overseas brands will open their shops in Hong Kong to capitalise on the array of shop options and the stable spending power in the local market.

The Korean dark cloud ice-cream is one of the latest trends and popular among the younger generation.

The F&B industry is blooming with fresh ideas and is expected to capitalise on the lowering rentals in Hong Kong to expand their business.

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Coping with Online Challenges by Shopping CentresW ith the falling number of mainland

visitors to Hong Kong in the past year, the city's retail sector was also on the wane. The arrival of the year 2017 brings new hopes to Hong Kong's retail scene. In the face of threats from online retail, however, some industry professionals and scholars believe that the future direction for shopping centres lies in the creation of a multi-faceted, experiential entertainment space that combines the virtual and the real.

According to the statistics of the Hong Kong Tourism Board, the number of visitors to Hong Kong in the first eleven months of last year recorded a 5.4% year-on-year drop, leading to adverse impact on the retail sector. In particular, those rely on tourists' consumption such as jewellery, luxury items and photography equipment recorded a double-digit drop in retail sales. However, the decline has narrowed in recent months, and a low single-digit rise was recorded in the first half of December last year.

Shopping Centres as a Multi-faceted Space While the retail sector has welcomed positive news, the arrival of the online retail giant“Tmall”puts the retail industry on alert. Ms. Maureen Fung, Director, Sun Hung Kai Properties (China) notes that Hong Kong's online retail market only comprises about 1% of the city's retail market, and it trails behind that in the Mainland. However, the shopping centre business must strive for change amid the overall changing social environment.

She asserts that shopping centres must consider their operation from different perspect ives and comprehend the consumers' appetite for change, and incorporate new concepts into their business. As she puts it, the shopping centres as a multi-faceted platform are more than just a retail space, but a medium that combines lifestyle, entertainment and the fostering of social development.

Ms. Fung also notes that to enhance the shared experience, shopping centres should seek to bring different kinds of sensory entertainment to consumers through various activities, which play an important role in the efforts to encourage spending. These activities are set to

become more digitalised in the future. Indeed, the shopping centre industry is constantly thriving for breakthrough, as reflected in initiatives such as the incorporation of AR (Augmented Reality) and VR (Virtural Reality) technologies into their promotions. The Christmas promotions last year encompassed an array of fun and creative events. Apart from enjoying acrobatics performance, visitors could ski or watch the Aurora at the shopping centres, where the activities enhanced the interactive experience.

Emergence of New Brands to Open Up New Prospects According to Sin Yat-ming, Professor, Department of Marketing, The Chinese University of Hong Kong, the decline in the number of Mainland Chinese visitors to Hong Kong has slowed, while the decline in retail has narrowed. This points to Hong Kong's retail going through a period of adjustments, and the sector's recovery is

expected to take six to nine months. He adds that the number of incoming visitors to Hong Kong is rising, and retail categories like jewellery and electronic appliances are expected to be the first to benefit from this trend. However, a strong US Dollar puts depreciation pressure on the Renminbi. If the depreciation continues, it is expected to undercut the purchasing power of Mainland travellers.

Prof. Sin also states that local consumption remains stable at present; meanwhile, salary increases in Hong Kong are projected at 2% to 3% in 2017, which is at a similar level as the inflation rate. While the US has started to raise its interest rates, it is expected to have no impact on Hong Kong, given the abundant capital in the Hong Kong market. It is believed that Hong Kong's economy will remain stable and it will not experience significant fluctuations.He stresses that declining

rentals also lead to lower operating costs. This eases the pressure on businesses to raise prices, and attracts more foreign brands to enter Hong Kong. It also encourages the emergence of more local brands, which offers a greater variety of choices for consumers and opens up new prospects for the retail sector.

According to the statistics of the Census and Statistics Department, the total value of Hong Kong's retail sales in the first ten months of 2016 was provisionally estimated to have dropped by 8.9% on a year-on-year basis. Prof. Sin predicts that the total value of retail sales for 2016 would hit an over 10% decline. As this year's winter has remained relatively warm, it has had adverse impact on the retail of clothing, food, electronic

appliances and skincare products. He hopes that new policies to s t imulate the economy

will be launched with the new

government officials on board, which will create new momentum for the city's retail industry.

Adaptability to Meet New Challenges In the face of competition from online retail, Prof. Sin says that while online retail is an irreversible trend, shopping centres retain their advantages. He explains that Tmall mainly sells high-priced products, Hong Kong consumers are accustomed to purchasing a product only after they have seen the physical object, particularly for expensive goods. Shopping centres offer sales of physical products and credit card installment shopping, which are services that online retailers unable to provide.

He remarks that Hong Kong people tend to preview a product online, and then purchase it at the shopping centre. In this sense, Tmall should not be an immediate threat to the shopping centres. However,

he also cautions that Tmall is likely to make adjustments to its business operation after studying the consumer behaviours of Hong Kong people, and it may pose a medium and long-term threat to the shopping centres. In response to this, the shopping centre industry should utilise both“the virtual”and“the real”. They should set out to boast visitor flows with online promotion, as well as services that add to customer convenience like the use of mobile app for making reservations.

“The shopping centres as a multi-faceted platform are more than just a retail space, but a medium that combines lifestyle, entertainment and the fostering of social development, says Ms. Maureen Fung, Director, Sun Hung Kai Properties (China).”

The retail sales in the first half of December 2016 recorded a slight growth due to the pre-Christmas shopping sentiment.

Shopping centres have to create all-time unbeatable shared experience in order to draw shoppers .