Tenant mix planning in Hong Kong shopping centres

Abstract

The successful factors of a shopping centre include the location, accessibility, design layout, tenant mix, internal environment and design, facilities provision. Many scholars argue on the successful factors of a shopping centre which are either the location or the tenant mix. According to Abratt et al. (1985), he mentioned the tenant mix was the most important determinant affecting the shopping centres.

Once the shopping arcade is strategically positioned in a prominent location with frequent contacts to shoppers and the public, tenant mix will become the next most critical factor to the success of the shopping centres. Since Hong Kong has a comprehensive and convenient transportation network, it reduces the significance of location for a successful shopping centre.

The purpose of this thesis is to focus on the importance of tenant mix and determinants of tenant mix in retail property management in Hong Kong shopping centre. The objective of this paper accounts for (1) the significance of tenant mix and (2) the most critical determinants of trade mix and (3) making suggestions for retail property management.

There is a case study conducted in Mira Mall. It mainly focus on several theories related to tenant mix planning. They included (1) Central Place Theory, (2) Retailer Agglomeration, (3) Store Choice Model, (4) Retail Demand Externalities and (5) Bid- Rent Theory. Literature review, interview with leasing manager and survey questionnaire are under studied in order to get the result. The sample for this study is taken in form of simple random sampling. Interviewees were drawn from the shoppers in Mira Mall. Their opinions would be summarized for the analysis of a well-balanced tenant mix.

The research result showed that a well-planned tenant mix is necessary and it can provide positive effects. It firstly identifies most of the customers’ needs for the area in forming the tenant mix. Anchor tenants are the most critical determinants which affected the patronage and choice of the shopping centre. It helps to generate positive retail demand externalities and differentiation. Secondly, tenant selection of other tenants to match with the anchor tenants is essential. In tenant placement strategy, landlord is suggested to use the strategy of homogenous agglomeration. Stores should avoid vicious competition, they should treat them as synergy effect among the trade area.

Meanwhile in order to adapt to the changing environment and survive in the market, frequent reviews of the existing tenant mix is important. This act could help the centre to keep competitive power among the competitors nearby. Once the strategy is successful, they will have a great return and benefits including the reinforcement in promoting the corporate image and goodwill for both the developers and the tenants. This creates a win-win situation.