The dynamism of the sector
A very pertinent subject opened the chat: the dynamism of the sector. With 26 years of experience in retail, especially in the shopping center sector, Manuel highlights the dynamism of the market, essential for the sector to be able to go through such challenging periods, such as the social isolation imposed by the COVID-19 pandemic: ''when I started, like everything else in life, I had no idea how dynamic and diverse the shopping mall industry is. When you dive into it, you don't want to go out anymore. It is very satisfying to work with people, consumption habits. Shopping malls are living beings, it's like a chassis and an engine, depending on the location, the target audience, the offer and competition, you must adapt the engine to make the project viable. It is very gratifying to see the entire life cycle of the enterprise,'' he says.
For Manuel, what fascinates him is the fact that the mall is the only type of development in the real estate market where, in order to have a return on investment, in addition to occupying the space, it is necessary to generate business for the occupants.
The Secret of Successful Shopping
What characterizes a good mall or a bad mall? Manuel explains that a good mall is one that performs well. To perform well there are two equations that need to be taken into account: Investment volume x risk. These two points must strike a balance between scaling and positioning.
Shopping malls with a larger area have an area of influence for greater attraction in relation to smaller ones, as they have a greater offer, but it is necessary to understand the correct dimension in a given context so as not to continue investing in the wrong way and generate many vacant areas, transmitting the image of failure.
Brazil had a shopping mall boom between 2013 and 2016, the average vacancy in malls opened at the time was 40%, while the historical average was 3.5%. Just building more area does not guarantee that the mall will perform better, but in retail the critical mass is directly proportional to its area of attraction. Therefore, calibrating the largest possible dimension within the project's feasibility, allowing it to have sufficient supply to face competitors in the region, and mitigating the risk of this investment as much as possible, not building more than necessary, is a very important equation.
Characteristics of a successful mall:
• Well dimensioned
• Well positioned to meet your audience
• Well marketed, with a tenant mix aligned with its positioning, and retailers that add to the set
• Well managed, preferably in a unified way
There is still room, it is necessary to qualify the releases
The number of new mall inventories to be delivered between 2023 and 2024 exceeds 540,000 m², and many wonder, is there still room? There is still room, but especially in mature markets, where there is a lot of supply, it is necessary to qualify the ventures to find niches and meet audiences with different needs. Furthermore, in a country of continental dimensions, there is still much to explore.
Qualification is important even for malls that perform very well, so that they do not get complacent and are always ahead, invest in attractiveness, and pay attention to trends, especially in the more mature markets.
