In the world of property there are literally billions of pounds to be gained and lost in the retail sector as the modern day shopper looks for the ultimate shopping experience, everything under one roof and the best goods on the market at the lowest prices. While many have tried to dictate the local consumer market in various parts of the world, not all have been successful even with venues which have cost hundreds of millions if not billions to build.
Check out this top five list of the largest shopping malls in the world and the varying rates of success which they have experienced :-
1. Sough China Mall – Dongguan, China
The Sough China Mall tops the list of the world’s largest shopping malls and with a total area of some 9.6 million square feet and over 6.5 million square feet of area for lease it is not difficult to see why. However, while the idea was good and the structure was built to perfection this is probably the world’s largest White Elephant.
Even though the Sough China Mall only opened in 2005 it was forced to close down in July 2008 after the vacancy figure reached as high as 99.2% which meant that at one point only 12 of the 1,500 stores available were open!
2. Jin Yuan (Golden Resources Mall) – Beijing, China
At number two we have the Jin Yuan shopping mall which has a very impressive 6 million square feet of leasable area out of a total area of 7.3 million square feet. The mall itself took only 20 months to build and opened in October 2004 to a fanfare and expectations of 50,000 shoppers a day, tourist flocking to the area and every brand name under the sun fighting to be part of the Jin Yuan shopping mall.
However, in reality the 50,000 shoppers a day never happened, the big brand name shops just used the mall for promotions and advertising and it never really go off the ground. While it is still open for business it is inaccessible for many in China and the goods on offer are out of the price range of the average citizen.
3. CentralWorld – Bangkok, Thailand
While not really in touch with the top two shopping malls in the world, the CentralWorld shopping mall still offers a very respectable 4.8 million square feet for lease out of a total area of 6.1 million square feet (although the total project has 11.3 million square feet including other uses).
The CentralWorld shopping mall originally opened in 1990 and was known as the World Trade Center until a later name change. It was renovated in 2006 and extra floor space was added for a whole range of new uses such as a hotel, entertainment venues and business office space. The mall is now more than just a mall but is widely regarded as the largest and most success shopping complex in South East Asia.
4. SM Mall of Asia – Pasay City, Metro Manila, Philippines
The grandly named SM Mall of Asia has actually managed to live up to its title with an average of 200,000 people walking through the venue on a daily basis. As with any property this is all down to location, location, location with the shopping mall situated central to a number of up and coming areas such as the Central Business Park and the Manila Bay complex.
While there is some debate as to the total size of the complex it has a land area of some 14 hectares and offers 4.4 million square feel of leasable floor space for retail. As well as being central to some up and coming areas of the city it also has parking for in excess of 5,000 vehicles.
5. Dream Mall – Kaohsiung. Taiwan
Close behind the SM Mall of Asia is the Dream Mall which offers 4.3 million of leasable retail space although there is again some debate as to the exact dimension of the project. However there is no confusion as to the services available in the complex which include retail, movies, restaurants, gyms and the theatre to name but a few.
To be successful in the world of retail you need attractions to get customers there, shops for them to visit and places where they can take a break before continuing their shopping ventures – the Dream Mall seems to have them all.
Even though there is no area of industry left untouched by the ongoing economic slowdown, retail is the industry which many people fear for the most. All around the world we are seeing levels of disposable income disappearing with many of the luxury retailers seeing business literally fall off a cliff. There is also some debate as to when this may return and even if the current mood in the market will see more and more people move to online shopping, reducing the demand for floor space, reducing the income of these monstrous shopping malls and pushing many towards financial trouble.
When you consider these top five venues offer over 26 million square feet of leasable retail floor space can you even begin to imagine the costs associated with running these malls?
While each and every property asset around the world is in some way valued upon the income which it can derive, the domestic home is more heavily influenced by basic supply and demand elements. If an investor was looking to acquire any shopping mall, the only figures they would be interested in is the net rent receivable and the cost of maintaining the mall. When you move into this area of the property market is it a basic mathematical formula which includes the current income and how you could improve this in the future.
When economies are doing well and the retail sector is flying high it can be easy to forget the lows that this sector reaches with each and every boom and bust cycle. The future value of any of these investments would depend upon a number of factors, but the main one is rental income and the vacancy levels at the time.