Re1103 project

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Real Estate Management Project, RE1103

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Re1103 project

  1. 1. 1 Members: Celine Koh (A0112975B), Hong Kay Yeong Daniel (A0110994A), Merilyn Milyarti Wantasen (A0112993B), Tan Pang An Leonard (A0116560M), Tan Si Ying (A0112851N) Aims To discuss on the facilities and property management at Northeast Exchange (NEX) mall. 1. Introduction & Rationale The Northeast Exchange (NEX) shopping mall is one the biggest suburban malls in Singapore and it is the biggest in the north east region. NEX is strategically located at 23 Serangoon Central, and is fully integrated with the new Serangoon Bus Interchange and MRT Station, where the North East Line and the newly opened Circle Line intersect. The 6-storey mall boasts a diversity of over 360 specialty shops and restaurants as well as several unique facilities. Positioned as the lifestyle hub for the North East heartlands, NEX has shown to be extremely popular and profitable ever since its opening in November 2010. Furthermore, it is expected that a renowned developer such as CapitaLand would undertake such a large scale project but in fact this mall is developed by Gold Ridge Private Limited - a relatively unknown developer. 2. Physical/Architectural Features The following section will discuss the success in the architectural features of NEX. The facade design of NEX is made to support the profit maximization goal of the developer so that it can ease retail planning and functionality of the building. Therefore, the shape of the building is made regular to ensure efficient space management inside the mall. Another aim is to make an urbanistic design in which the architecture form engages and influences the
  2. 2. 2 urban environment. NEX looks modern and eye-catching among other suburban shopping malls. Moreover, it is possible for NEX not to have an iconic design as it is situated in the suburbs with low tourist traffic flow. It is also targeted to middle-income customers in the neighbourhood. Another successful attribute on the design is the amount of greenery incorporated. Serangoon Central is currently a dense residential estate with limited greenery. According to the Skyrise Greenery Project, they analysis how NEX can provide a green lung to the region (National Parks, 2011). Therefore, the mall has an opportunity to introduce a substantial amount of landscaped spaces to stand out among the rest of the buildings in the area. NEX has incorporated green wall climber as well as a roof garden. This design follows the architect’s concept of blending the surroundings to create a green necklace permeating the shopping mall. 3. Facilities Management This section will discuss about the provision of facilities in NEX which support the core business of the shopping mall and enhance the convenience of its visitors. Some of the facilities include carpark, toilets and nursing room, library, KidzPlay and escalators. Carpark When NEX mall first opened last November, the carpark was poorly designed. Even though its carpark had more than 400 parking spaces, they are usually filled during peak hours and weekends. Frustrated motorists turned to the HDB multi-storey carpark across the road beside NEX which has 500 spaces. Guthrie Consultancy Services the mall manager for NEX, proposed the construction of a new sheltered bridge to directly connect the HDB car park to the mall, which effectively helped alleviate the parking situation, making it more convenient for shoppers, especially when it rains. The mall's management also reacted quickly to shoppers' feedback by removing parts of the walls of the car park which prevented motorists from noticing oncoming vehicles (About Singapore Property, 2011). This has allowed the management to quickly convert the failure of providing insufficient car park space into a relative success by leveraging on the HDB carpark.
  3. 3. 3 Toilets and Nursing Rooms The toilets in NEX consist of both male and female toilets, are located at every level of the mall. The mall has also met the Building and Construction Authority’s (BCA) “Code for Barrier- Free Accessibility in Buildings” requirements by having one handicapped toilet located at every level (Building and Construction Authority, 2006, p. 53). These special cubicles were designed to have larger space and metal handles to help elderly and disabled people use the toilet safely and comfortably. Moreover, the nursing rooms in NEX mall are each equipped with a changing station, wash basin and hot/cold water dispenser that is catered to every nursing mother. The nursing room provide mothers and infants a comfortable and convenient environment as well as giving them privacy with curtains and a lockable door. Library One unique public facility that the mall has provided is a public library located at the rooftop of the shopping mall. A library helps to increase and diversify the shopper traffic in the shopping mall (Morris & Brown, 2004). This may be due to the higher probability of people going to the mall as they have larger range of activities and purposes that they can fulfil. This essentially supports the core business of a shopping mall as an increase in human traffic potentially increases retail revenue. KidzPlay KidzPlay is a wet and dry playground located at the rooftop of the NEX shopping mall, it includes spray tunnels, water sprinklers and slides for kids to play in. In contrast to Wild Wild Wet which requires users to pay an admission fee, children can use the playground for free. Parents can bring their children here to have fun at the playground, at the same time enjoy reading session in the library while keeping a look-out for their children. Therefore, this attraction of NEX mall is considered as a success because it draws many families to bring their kids to the mall, hence increasing the shopper traffic in the mall. Escalators Escalators play an important role on increasing convenience in malls by transporting large quantities of people in any building to a different level in the mall. It is especially effective in commercial retail buildings as they increase customer density and thus increase the revenue, especially in the upper levels. Strategic arrangement of escalators will help to evenly spread out customer traffic throughout the different levels of the shopping mall. In the case of NEX, the escalators at the southern wing connecting basement 1 to level 1 was not efficiently placed. Shoppers had to find and walk a distance to get to the escalator. Even though shopper traffic is still relatively high, it is not fully maximised due to the poor layout of that escalator. However, majority of the escalators in the mall has demonstrated an acceptable arrangement. Therefore, the escalators are successful as a facility that contributes to the efficient operations ofatheashoppingamall.
  4. 4. 4 4. Lease Management The developer Gold Ridge Private Limited, has adopted unique leasing strategies to reduce functional and economic obsolescence. This part will address the successes and failures of the approaches. One major strategy that the developer has used is to get a large number of anchor tenants and subsequently spread them out over the different levels of the shopping centre. This centre in an evenly manner. In the process of attracting a large number of anchor tenants, the developer has actually leased out retail space to two different anchor tenants which compete in the same retail market. Some examples include Cold Storage and Fairprice Xtra, as well as Food Republic and Food Junction. Theoretically, this would not be appropriate and suitable as competing tenants would reduce each other’s market share by locating in such close proximity. However, the developer has successfully executed this strategy by dissecting the market into two major segments of middle-end market and the high-end market. Fairprice Xtra and Food Junction target middle-end consumers whereas Cold Storage and Food Republic cater to the higher-end consumers. This market segmentation has allowed the respective anchor tenants to specialise in their own market segments which lead to increased profits. Another strategy that the developer has employed to maximise rental income and profits is by increasing the net lettable area of the shopping mall through leasing out available spaces on eachaflooratoakioskatenants. However, one failure in lease management which was observed during the site visit is the extensive number of leases which expired at the same time. This resulted in the Level 1 floor being extremely vacant. This had a spill over effect on the remaining tenants in the area as traffic flow is significantly lower as compared to other sectors of NEX shopping mall. 5. Maintenance Management One of the objectives in maintenance management is to comply with statutory obligations for governing the ownership and usage of this building. One representation of NEX’s management team complying is seen through the fire extinguishers being serviced and maintained every year to ensure they can function properly in case of emergency. Another objective of maintenance is to provide safety and comfort for the occupants. As seen from the figure, the toilet at the ground floor appears wet with foot marks alongside the squat-type toilet. The ground floor of the shopping mall usually has a higher number of human traffic compared to the upper floors, thus there is a higher frequency of which people use and dirty the toilet. Therefore, housekeeping for ground floor toilets should be done more often to ensure hygiene and avoid users from slipping due to the wet floor.
  5. 5. 5 In addition, preserving the value of investment and maximising net return over the economic life of the property is also one of the objectives in maintenance management. The vacant shop units in NEX are well- maintained to provide an aesthetically pleasing appearance so that these areas become more attractive to lease out. As seen from the picture, they also project an image to shoppers that the vacancies are planned and the management is bringing in newer and more appealing tenants in the near future. 6. Fire Safety Management Excellent fire safety management is compulsory in every property as it is concerned with the well-being and protection of the occupants in case of an unexpected fire breakout. Every development in Singapore is required to achieve a minimum fire safety standard set in the fire safety legislations before their building plans can be approved. Thus, it is undoubtedly expected that NEX comply with the minimum standard. However, attaining the minimum standard may not be equivalent to providing the best. This section of the report will give deeper insight regarding the fire safety management carried out in the development. As a regular standard of any development’s fire safety management, NEX has implemented a general fire safety precaution by not allowing any occupants - tenants and visitors to smoke anywhere inside the shopping mall. It is also equipped with a complete set of fire protection system such as fire alarm, smoke detectors, water sprinklers, portable fire extinguisher, dry riser system and hose reel. These fire protection systems alert occupants, help to detect the presence of fire and reduce its intensity so that the effect would be less disastrous. They are readily available in every level of the shopping mall and are located at conspicuous places so that they can be easily found by people during the chaotic evacuation process. In addition, all fire exits are clear and unblocked with its doors made of fire-resistant wood so that fire can’t pass through and invade the emergency stairs. Emergency stairs are wide to ensure faster evacuation process. The emergency stairs are equipped with fire alarm speakers for voice communication system. Furthermore, NEXhas a few staircases and escalators in the external facade of the building which can be used in conjunction with the fire staircase for evacuation. Fire safety managers of NEXhas also tried to improve its tenants’ evacuation skill by enforcing participation in an arson simulation exercise which was carried out as realistic as possible, in collaboration with Serangoon Neighbourhood Police Force, NEX security management team and the Seng Kang Fire Station. However, there are still some areas that are hindering NEX to provide maximum fire safety measures to its occupants. NEX lacks of evacuation map and signs that guide occupants towards the fire exits. Furthermore, clustered kiosks at some areas of the shopping mall that helps to maximize profit, may hinder evacuation process. Lastly, high-ceiling atrium causes water sprinklers to be ineffective on the particular area and results in more rapid smoke diffusion.
  6. 6. 6 7. Risk management Business continuity management is a vital part of risk management which enables an organization to minimize potential loss and manage a crisis efficiently. NEX’s management has adopted several risk management approaches towards crisis that can lead to business interruptions that result in financial and reputation losses. Risk management pinpoints and rank the potential threats that might be faced by NEX and applies cost-effective measures to curtail damages that might be caused when those threats become a reality. The following will address the successes and failures of the approaches. One strategy that NEX has adopted is by enhancing its current security management. As there are an increasing number of megamalls in heartland regions, these have become popular areas for minor theft. Due to an increase in shoplifting cases in the Serangoon area, an initiative titled “Mall Watch” was implemented in NEX shopping mall as a part of security management to educate and enhance tenant’s crime prevention awareness. Training was conducted for tenants and security officers. Workshops were conducted for tenants and pamphlets were distributed to engage visitors as well as educating them on the common crimes. Frequency of patrols around the mall has also been increased. Furthermore, installations of CCTV and motion sensor camera are seen at the vital areas of the mall to deter inappropriate acts in the mall. NEX is also located next to the Serangoon Police Station, which can act as an off-site crisis command centre so that any damaging situations can be better managed and solved quickly in order for the mall to be able to resume its business operation. Nevertheless, there was still one incident in which NEX shows a sign of failure in its crisis management. The incident was related to malfunctioning of the elevator. The elevator stopped working and the ventilation fan went off, leaving only an emergency light. The main problem is that there was no response given when the passengers called for help through the intercom. As a result, 11 passengers were trapped for approximately 45 minutes inside the elevator, before any help came and rescued them. They had to resort to climbing through the foot of the elevator to get out as the elevator stopped between floors. One of the passengers was appalled by the security guard’s response when she got out of the lift. In this case, NEX’s management has to be able to control the situation swiftly and efficiently as the passengers’ lives were being compromised. This incident may also damage the mall’s reputation.
  7. 7. 7 8. Conclusion and Additional Recommendations In conclusion, NEX is successful in terms of the overall project and facilities management. Guthrie Consultancy Services (property manager of NEX) was capable in maintaining and improving the value of the property as NEX was eventually sold to China Investment Corporation and Mercatus Co-Operative Limited at a tidy profit. Moreover, NEX has been a very popular suburban mall since it first opened which shows that visitors are convenient with their management and there has not been any obsolescence. There has only been a few minor incidents so far but they have implemented revamped solutions in their management process to keep a sustainable image and reputation. However, some improvements can be done to enhance the successfulness of the management. NEX is currently lacking in the number of fire safety evacuation maps and signages displayed. Thus, occupants might not be able to identify the assembly areas and escape route easily in an event of a crisis. NEX need to display more evacuation maps and signs at conspicuous places to improve its fire safety management. One recommendation for lease management would be to stagger the lease expiry dates among tenants so that all of them would not expire at the same time. Also, to mitigate the damage of the vacant shop units, the management could intensify advertising and promotions of the area to potential tenants. In addition, NEX is encouraged to always keep an emergency contact list and do a regular check on their risk assessment. However, the success of the recommendations we provide depends on NEX management team’s commitment to implementation.
  8. 8. 8 References About Singapore Property (2011, April 22). Your Guide to Singapore Property & Real Estate News. Retrieved from http://www.aboutsingaporeproperty.com/bridge-to-link- hdb-carpark-and-nex-mall/ AsiaOne (2011, February 16). 11 people trapped in lift for 45 minutes at NEX mall. AsiaOne News [Singapore]. Retrieved from http://news.asiaone.com/News/AsiaOne+News/Singapore/Story/A1Story20110216- 263803.html Building and Construction Authority (2006). Universal Design Guidelines (commercial buildings). Retrieved from http://www.bca.gov.sg/BarrierFree/others/ud_guides.pdf Morris, A. & Brown, A. (2004). Siting of public libraries in retail centres: benefits and effects. Library Management, 25 (3), pp. 127--137. National Parks, 2011. SKYRISE GREENERY PROJECT FACT SHEET. Available from World Wide Web: http://www.skyrisegreenery.com/images/uploads/misc/NEX_Shopping_Mall.pdf Schindler (n.d.). Planning guide for escalators and moving walks. Retrieved from http://www.schindler.com/content/sg/internet/en/mobility- solutions/products/escalators/schindler- 9700/_jcr_content/rightPar/downloadlist/downloadList/30_1341905662676.download.a sset.30_1341905662676/Planning%20Guide%20for%20escalators%20&%20moving% 20walks.pdf Yan, J. (2013, October 29). Watch out at shopping malls. Retrieved from http://www.hometeam.sg/article.aspx?news_sid=20131029PEPZNbGfPQe2

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