By José Falcão Mena
The shopping center sector is currently expanding at the international level. With specialized companies entering the sector in developing countries of North Africa and South America, together with the economic recovery of mature markets like those in Europe, new forms of development have appeared that innovate on the traditional shopping center concept.
With a better economic situation at the global level and many investment funds interested in the shopping center sector, the door has opened for the development of new asset that broadens the offer of shopping centers at the international level. In view of this situation, companies with a longstanding presence in the sector, specialized in the development, management, and lease of this type of asset, have the opportunity to offer their knowledge and expertise through the provision of services to this type of investor seeking to set up a new shopping center.
Over the past year, the construction of new shopping centers has been constant. In mature markets like Europe, moreover, the development of new mixed-use centers in which the shopping center forms the backbone to a larger project including offices, hotels, or medical centers has become a very strong market trend. The appearance of these new projects is due to the greater weight of large cities in a country’s economic development. In this sense, this new type of format requires collaboration for the integration of each building with different activities that offer their services in this area. For this reason, experts in the provision of this type of service play a key role in the construction, design and operation of these new assets, even though they do not own them.
This type of mixed-use project is seen not only in new neighborhoods in large cities but is also increasingly employed as a method to revitalize a specific area or convert an industrial zone into a service area with a shopping center, offices, and other buildings for tertiary use. One common feature of this type of business is its presence in large cities or their surroundings, however.
Is this type of development appropriate for all countries? In principle, it is—with a few exceptions. Mixed-use projects, with buildings used for different purposes, are more successful in all cases in large cities. It should be noted, however, that the best results are normally obtained in mature markets in which shopping centers are an essential element of the population’s commercial cultures, in comparison with developing markets, in which consumers show greater loyalty to other commercial formats.
Nonetheless, new forms of collaboration between service companies and investors have appeared for the development of this new type of project. In contrast to the traditional investor-supplier relationship, a new option has been created in which the service provider assumes a small part of the ownership for the purpose of sharing part of the risk with the investor. This creates a relationship of greater trust and service provider involvement on the strategic front. In addition, this arrangement allows the investor to find a reliable partner who ensures the best-specialized services, which in turn enable the new project’s success. The relationship between the parties continues to evolve at the same time as the new commercial formats evolve.
The sector is evolving and, with it, the new developments and the relationship between owners and service providers. The adaptation of the sector to these new trends is key to achieving sustainable market growth and greater loyalty on the part of visitors.
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