1. Land: Location, Location, Location is everything!
· Make sure the land is easy accessible, ideally on the main road
· Is not too far away from the nearby city
· Has enough “own” parking facility
· Does not create traffic congestion
2. Market: Is your market ready for a mall? The construction cost and maintenance cost of a mall is higher than a normal shopping complex. So this means, you will have to charge a higher rent from tenants, and hence tenants will charge a higher margin from the customers. So is the market ready to pay higher for a “Mall” shopping experience? So take time, to interview the tenants and land owners in that location, and know the market pulse
3. Customer Segment: Who should be your visitors? Nobody likes something that is built for everybody. People have varied tastes and preferences, and these people can be categorized like high income/middle income/ low income, Educated class/professional class / uneducated class, Teenagers/Youth/ Matured etc. If you target a specific class, you can have a tenancy mix that answers the need of that specific class, you can bring in facilities, themes and features that appeals them
4. ‘Something Different” Factor: What will call as the USP or Unique Selling Preposition? Why should tenants or shoppers come to tour property when it offers the same as other commercial premises? A solid “difference” in the form of a theme, special amenities, facilities will help you attract the your customer segment of choice
5. Case Studies: Learn from those who started before you. Visit leading successful and failing malls and study what works in them and what does not. You can avoid the costly mistakes they did and copy the good things they did, or come up with a totally new idea!
6. Research: Visit other malls are not enough. You have to know the technical aspects about planning footfalls, the tenancy mix, the industry best practices etc. For these you have to read relevant books, online resources etc.
7. Finalize your idea of the Mall: Finalize what theme it will be, how much square feet area you plan to build and sell/rent, the common facilities and amenities to be provided, etc.
8. Branding your mall: The investment needed to develop a mall is not limited to the construction cost. It is only the major component, but there are many other important components as well like branding, marketing and sales expenditure. You can decide, how you will be doing it, identify the cost of doing it and set it as the budget for the same
9. Operation & HR Expenses: Unlike shopping complexes or normal commercial buildings, a mall has to be managed 24/7. It should have a promotion team, administration team, security, cleaning and maintenance team. You have to calculate how many staff are required, how much should you pay them, when you should recruit them, how you should treat them etc. All this goes to your operational budget
10. IT & Technology Plan: Is your mall going to be high tech? Is the administration going to be fully computerized? Will the mall use technology for security monitoring? Will there be more technological usage? Get the costing and add these to a respective budget.
11. Investors: Do you have the funds to invest? Or do you need investors? If so, how much should they invest? What returns on investment will they expect? What break even period will be ideal for them? How do you attract the investors? What tools are required to attract them? How do you manage the investors so that I get to keep control over the business? How do you manage the investors when there is a dispute?
12. Financial Plan: Once all the budgets are ready, you should do a financial feasibility analysis in various scenarios. This will be based on the revenue and cost you have created. The projections will show the projected balance sheet (your assets and liabilities, in future), profit and loss statement, cash flow statement and ratios (stating the pay back periods, ROI and break even points), in each scenario.
13. Rework the business model: If the financial projection (ROI, Pay Back Period and Break Even) are not meeting your expectations, then you have to make changes to each of your planning (reducing your budget accordingly), until your financial plan is more acceptable. But it should not be unrealistic. It should not be based on making unrealistic assumptions to please oneself or the investors.
14. Selecting the architect: The architect should come only at this stage. At this stage, the total capital is finalized, the budget set aside for the mall construction is finalized, and the specific theme, amenities, facilities and features required are all well documented. This requirement should be given to the Architect. The architect’s duty should be to build an aesthetically beautiful mall, complying with legal and safety requirements, within the budget and meeting the full requirements of the client. At present, since the most clients do not know, how their malls should be, authorize the architects to do all the above steps. And since architects are not specialists in the mall business model, design based on their limited knowledge. Besides, they allocate a more than required capital for the construction itself, which will seriously affect the financial viability of the mall.
15. Start Branding Early: As soon as the construction starts, start branding works. Branding is the process of creating a desired impression in the minds of the people. The more people like your branding, the more they will be looking forward to take spaces at your mall or shop at your mall
16. Hunt for right tenants: Unlike shopping complexes, the tenant mix is important in a shopping mall. The more brands, the better. And it’s not wise to sit idle and wait for them to come. Instead, hunt for the ideal brands to setup at your mall. Market to them very early. So that they have enough time to plan fund and resource allocation in advance.
17. Inauguration with a bang! A Mall is often the pride of a city. So the whole town should know about it. Also when hundreds of people flow in, the mall should have all its shops open for business. A mall that is not fully functional is not something shoppers like to see.
18. Professional management: Unlike shopping complexes, a mall has to be managed that too professionally. There should be regular events to bring the crowd in, the security should be good, the mall should always be clean and tidy, the maintenance should always be preemptive.
Building a shopping mall is an exciting journey, and so are the rewards. Mall does not come with just higher rental income. It comes with higher land appreciation (it appreciates the entire locality). It brings a strong brand image to its promoters (as a mall is a local landmark).
So if you can do all the 18 steps, then you are fit to go and start one. If not, engage a strategy consultant do those work for you, representing your interests. At AASC, we are ready to serve you at each of the 18 steps.