Crowd pleaser: retail centres' popularity offers a substantial platform for increased revenue

Posted On Monday, 23 February 2004 02:00 Published by
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Investment in fun-raising pays off

IMPTI DU TOIT - Property Writer

Property owners, particularly in the retail sector, face the reality that, while critical for survival, tenant rentals provide limited-income growth opportunities.

However, considerable potential exists for property owners to increase revenue by extending their core business and developing innovative schemes designed to add value to tenants.

So said Andrew Weinberg, executive at New Ventures, a specialist division of Old Mutual Properties.

Weinberg said the retail and entertainment complexes in the company's South African portfolio attract more than 100 million shopper visits a year and are a substantial platform to tackle a challenge of producing 50% of the centres' revenue from non-traditional income.

He said alternative sources of revenue include advertising, specialty retail programmes involving temporary merchandising units in the form of carts and kiosks, exhibitions and sponsorships, gift vouchers, and innovations in information technology and customer relations management.

Handling these initiatives within New Ventures are a range of specialists.

Point of Presence (Pop), a subsidiary company focusing on shopping mall media, handles signage and advertising sales within the malls and parking areas.

Pop, which was nominated for an award for media innovation from multinational Unilever, has amassed research on the behaviour and demographics of mall shoppers.

Experienced media professionals plan media campaigns for major brands, utilising an extensive product range, from free-standing display units to lift banners and exterior and interior signage.

Pop also develops sponsorship opportunities across the lifestyle areas in the malls, one example being the world's highest indoor climbing rock at Old Mutual Properties' flagship, the Gateway Theatre of Shopping, outside Durban.

The malls all house areas suitable for exhibitions of varying sizes, providing linkages with community events and opportunities for revenue from exhibition organisers.

Said Weinberg: "Entertainment management is another area where we have developed a different set of skills and expertise to normal shopping centre management. We have found this is one of the areas least understood by traditional centre managers, but has potentially one of the bigger impacts on customer visits and hence on revenues.

"The fee-earning capacity of mall facilities is also leveraged to form part of the entertainment experienced by shoppers. At Gateway, the climbing rock features in an adventure challenge, a corporate team building exercise, along with a science centre, where companies sponsor interactive exhibits to entertain and educate, a standing wave for board riders, ten-pin bowling, and a 4x4 drive course. So shoppers get a free sideshow of seeing fee-paying teams having fun." In another initiative, the specialty retail and leasing team sets up programmes within centres managed by the company and complexes belonging to other landlords.

The programmes cover temporary units - a mixture of carts and kiosks - in walkways, vacant stores, parking and peripheral areas which provide low-risk, high-exposure opportunities for specialty retailers and an additional merchandise mix for the venues and shoppers. The division provides an on-site manager to ensure full compliance with house rules, to manage the specialty retailers' debtors book, and to pay a head lease rental to the property owner on the first of each month as a direct return on the investment in buying and installing custom-designed retail merchandising units.

In addition, the division has another revenue-producer in a nationally redeemable gift-voucher programme involving retailers at Old Mutual Properties centres, and also at other retail complexes, such as within Johannesburg, Durban and Cape Town International Airports.

Then there is The Office Suites Company, a division that provides furnished offices and support services on a daily or longer-term basis. "Through its specialist divisions, Old Mutual Properties is extending its core business and applying its expertise in commercial rental management to an innovative concept that delivers an additional revenue stream, and provides a cost-effective, quality alternative for business space," said Weinberg.

To generate these new ventures, the division has an incubator for concepts that are tried and tested before being brought to market by a team of concept engineers.

These are recent graduates who bring a totally fresh and out-of-the box approach to property management, customer relations and revenue generation. "The strength of these innovations is that we add value to centres managed by Old Mutual Properties or other managers," said Weinberg

Publisher: Weekend Argus
Source: Weekend Argus

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