{"id":6391,"date":"2019-10-28T13:17:06","date_gmt":"2019-10-28T10:17:06","guid":{"rendered":"https:\/\/trevian.fi\/?p=6391"},"modified":"2022-01-13T08:54:56","modified_gmt":"2022-01-13T08:54:56","slug":"future-of-shopping-centres","status":"publish","type":"post","link":"https:\/\/trevian.fi\/en\/future-of-shopping-centres\/","title":{"rendered":"Shopping Centre: \u201dThe reports of my death are greatly exaggerated\u201d"},"content":{"rendered":"

When I speak to investors, especially U.S. based, nobody wants to hear about shopping malls. During the past two years, I\u2019ve met only one investor who was looking for shopping centres and thought they are a very good investment category right now. There are many question marks around the future of the shopping centres.  But as always, uncertainty also creates possibilities and therefore I think it\u2019s worth spending some time figuring out the future.<\/p>\n

America will lead the way<\/strong><\/h2>\n

America, the home of the mall, is where to look first. Since the inception of the whole concept, everything new has come from the USA. Therefore, it\u2019s the best place to look for future trends. Investors in America are terrified of the slowing sales and closing malls. \u201cOnline sales will kill the mall\u201d<\/em> is the slogan of the day.<\/strong> But there are other factors influencing the number of malls and shops.<\/p>\n

The shopping centre GLA (Gross Lettable Area<\/em>) per inhabitant in the USA has always been growing. In 1990 there was 1700 sqm per 1000 inhabitants and 2018 the number was 2400 \u2013 an increase of 40%. As in any other business, there is a saturation point somewhere where the floor area per customer exceeds the demand. As the median household income grew only 15%, it is very likely that there are too many shopping centres in the States. The weak will die in the harsh competition. Even if many shopping centres are closing down, the GLA has remained stable during the past years and we haven\u2019t seen a decline yet. Some malls have  closed down, but the number of malls refuses to decline<\/a>.<\/p>\n

Nordic climate equals shopping centre success?<\/strong><\/h2>\n

Comparing the GLA of Europe<\/a> and USA tells about huge cultural differences both in consumer behaviour and urban design. The shopping centre GLA in Europe is just 10% of the GLA in USA. In some countries, the urban planning system prevents the construction of malls, but also the traditional way of shopping doesn\u2019t support them. The Nordics are different from the rest of Europe, their GLA being more than twice the average European GLA. Norway is the king of European shopping centre GLA with 800 sqm \/ 1000 persons, which is still 60% less than in USA.<\/strong><\/em> I haven\u2019t found any research regarding why the GLA is so high in the Nordics, so I need to rely on my own reasoning. It\u2019s pretty simple: the climate! Who wants to push carts in the snow, try to find a parking lot where your car might get stuck or carry the goods outside with icy rain and hard winds on your face?<\/p>\n

People seek convenience in their everyday life. It is quite understandable that this also applies to shopping. Online trade is part of this phenomena, but so are shopping centres. If you need to buy more than one category of items, it still makes sense to go to a place where you can shop them with one stop. The original idea of shopping centres will not go away until all trade is online, which most likely will never happen. In my opinion, the enormous waste of energy on unnecessary moving of goods and destroying the returned goods is going to be a big issue for online traders in future. See my previous blog on retail sustainability<\/a> <\/u>for more detail.<\/p>\n

Live is sometimes better than online<\/strong><\/h2>\n

Convenience is the key to success. The location must be easy to reach by public transport and car. The parking must be spacious and well lit. That is a good starting point for a convenient experience of \u2013 what exactly? Spending a Saturday with the family or just getting the goods you need quickly? Both types of customers need to be served, therefore a good area for restaurants and other services are needed, but the key is and will be the shops. A shopping experience that no online store can provide. The sales of the Finnish shopping centres are still growing despite all talk about declining sales \u2013 last year 0,7%<\/a> which is not huge, but it is still positive!<\/p>\n

About the author:<\/strong> Risto Vuorenrinne has worked in real estate business for 20 years. He holds a master\u2019s degree in laws and engineering. In Trevian he\u2019s responsible for new investments of international investors. Prior to joining Trevian Risto has worked with the world\u2019s leading private equity investors advising them in acquisitions of assets in Finland. He has a long experience on commercial property development.<\/em><\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

When I speak to investors, especially U.S. based, nobody wants to hear about shopping malls. During the past two years, I\u2019ve met only one investor who was looking for shopping centres and thought they are a very good investment category right now. There are many question marks around the future of the shopping centres.  But as always, uncertainty also creates … <\/p>\n

Read More<\/a><\/div>\n","protected":false},"author":6,"featured_media":6392,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_improvement_type_select":"improve_an_existing","_thumb_yes_seoaic":false,"_frame_yes_seoaic":false,"seoaic_generate_description":"","seoaic_improve_instructions_prompt":"","seoaic_rollback_content_improvement":"","seoaic_idea_thumbnail_generator":"","thumbnail_generated":false,"thumbnail_generate_prompt":"","seoaic_article_description":"","seoaic_article_subtitles":[],"footnotes":""},"categories":[60,47,141],"tags":[],"class_list":["post-6391","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-investment-management","category-shopping-centers"],"acf":[],"yoast_head":"\nShopping Centre: \u201dThe reports of my death are greatly exaggerated\u201d - Trevian<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trevian.fi\/en\/future-of-shopping-centres\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Shopping Centre: \u201dThe reports of my death are greatly exaggerated\u201d - Trevian\" \/>\n<meta property=\"og:description\" content=\"When I speak to investors, especially U.S. based, nobody wants to hear about shopping malls. 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