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Pragma best practice white paper 2018
- 1. Strategic insight for decision makers to enhance asset value and profitability Global Case Studies
- 2. Introduction Ken Gunn, Managing Director, Property The majority of older shopping centres have been designed for a previous generation of customers and are increasingly obsolete. With the impact of technology increasing, these centres must adapt. However, many investors are paralysed by concerns about future values, wary of CVAs, blinded by the pace of consumer change and unable to decide if it is possible or viable to reposition and future-proof their assets. In conjunction with our partners within the Ebeltoft Group, Pragma has created this best practice guide to demonstrate how well- judged investment can be the catalyst for positive growth. We identify a variety of strategies including community engagement, format innovation, repositioning of offers, redevelopment and the extension of traditional roles beyond retail. Common to all is Pragma’s belief that the consumer is not the problem, but the key to a successful and sustainable long term future. A global alliance of retail consultants offering paradigm-shifting consulting for retail and service businesses around the world.
- 3. Pragma Framework Key components for asset optimisation Pragma’s framework for creating and managing a sustainable proposition contains three key components, built around placing customer needs at the heart of the strategy: Product: the mix of space utilisation, occupiers & positioning Programming: variable content & events to engage audiences Place: the quality of public realm, environment & design Product Programming Place Customer at the heart Sustainable Proposition
- 4. Redevelopment Oakbrook Centre, Chicago, USA Challenge Struggling retail tenants and mall lacking in character Actions Product New theatre, food hall and Bloomingdale’s concept Programming Retail concept incubator and screen for community events Place Full cosmetic update and innovative parking technologies Impact 37% increase in sales (2011-2017) 43% increase in sales density (2011-2017) Net value creation of $470m
- 5. Repositioning The Shops at Nanuet, New York, USA Challenge Increased competition from a larger, competing centre Actions Product New cinema, food market, gym and aspirational retail Programming Outdoor event space hosting concerts with street food Place Conversion from indoor covered mall to outdoor streetscape Impact Increase in occupancy rates from 67% to 96% (2007-2015) 45% increase in sales ($110m - $160m) 10% increase in tax revenues
- 6. Repositioning Glories Shopping Centre, Barcelona, Spain Challenge Dated shopping centre lacking point of difference Actions Product Creation of flagship stores and more public areas Programming Festivals, interactive family events and pop-ups Place Reduction in retail space, broadening of use to include public space and mixture of local and international restaurants Impact Reduction in stores from 190 to 130 Introduction of 12,500m2 of public space 40% increase in footfall (expected by 2019)
- 7. Repositioning Market Place, Bolton, UK Challenge Declining footfall and high vacancy rate at dated shopping centre Actions Product Transformation into a new retail & leisure destination for Bolton Programming Festivals, interactive family events and pop-ups Place Restoration and celebration of heritage Victorian Vaults Impact More than 60 new leases agreed 45% increase in footfall (2013-2016) 50% of visitors now dwell for more than 90 minutes at the centre
- 8. Engagement La Vaguada, Madrid, Spain Challenge ‘Dead’ space and poor circulation in an off-pitch part of the mall Actions Product First eSports arena in a Spanish shopping centre Programming Consumer interaction, competitions and community Place Activation of unused mall space and creation of atmosphere Impact 4,200 new members in first year 2,000 monthly users 60 minute average stay
- 9. Engagement L’illa Diagonal Centre, Barcelona, Spain Challenge Work with local authorities to provide fresh market products Actions Product Provision of small units and flexible space for independents Programming Introduction of tasting experiences to involve customers Place Careful management and promotion of ‘El Rebost’ brand Impact Increase in the proportion of sales from 1% to 9% in this category 10% increase in footfall 0% vacancy in this area of the scheme
- 10. Innovation Princes Quay, Hull, UK Challenge Declining footfall and sales in full-price mall in mid-tier city Actions Product Fusion of outlet, full-price retail, F&B and leisure Programming Art exhibitions and street food markets to energise the centre Place Creation of defined zones to enhance consumer experience Impact 22 new stores opened since June 2017 33% increase in footfall (2016-2017) Significant increase in full-price sales, on top of new outlet turnover
- 11. Innovation Shoppi Tivoli, Zurich, Switzerland Challenge Declining sales and footfall in a traditional covered shopping centre Actions Product 800m2 modern food offer and ‘children’s paradise’ concept Programming Highline FundRACE, with six lines between high-rise buildings Place Customer-centric with evening shopping and pet facilities Impact Footfall improvement of 24% to 5.6m visitors Decreased vacancy rate Increased occupier demand from broader merchandise categories
- 12. About Pragma Services we provide We are a strategic partner for operators and investors in consumer markets. WE HELP OUR CLIENTS BY PROVIDING EXPERT SERVICES IN: For further information please contact: k.gunn@pragmauk.com | www.pragmauk.com | (0) 207 902 6888 Our Property Division provides strategic insight for decision makers to enhance asset value and profitability.