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Sandy Li

Retail developers look to Hong Kong for skills in managing commercial centres

Demand in China's retail property sector for Hong Kong consultants is on the rise, thanks to a growing number of malls and a shortage of experience in marketing and managing them.

Industry watchers said the number of shopping centres in the mainland would climb to 300 by year end from 200 now, creating a need for consultancy services.

Industry veteran Stephen Sum Wing-nin, who has helped revamp 10 shopping malls in Hong Kong and the mainland over the past 10 years, said most of his clients now were in the mainland as the market here was mature.

His company, www.Dr.Mall,  is working on three retail projects in Shenzhen, Dongguan and Guangzhou with a combined gross floor area of about 1.8 million square feet.

Mr Sum, who is known as Dr Mall, set the trend for speciality malls in Hong Kong with the  Mongkok Computer Centre and Golden Computer Arcade in Mongkok, the Wan Chai Computer Centre in Wan Chai and Whampoa Gourmet in Hunghom.

But Hong Kong's economic slump in 1998 forced him to explore new opportunities in the mainland,  where many malls have been poorly planned and some have stood empty for years.

He said small to medium-sized developers on the mainland built retail complexes in the hope of quick returns but did not have the expertise to run them.

His company offers comprehensive mall planning services, including positioning, trade mix and promotions. It helps also clients find tenants via its connections in Hong Kong and abroad.

'We promise the operators will receive rentals at least 30 per cent higher after the makeover,' he said.

Shun Luen Development, the owner of a dormant shopping centre of 64,500 square feet in Panyu, Guangzhou, reaped revenue of $120 million after www.Dr.Mall turned it into an upmarket destination named Trendy Mall.

The centre had stood empty for seven years after all the residential units above it had been sold, Mr Sum said.

'I was shocked when I saw people cooking and sleeping there.'

The redevelopment took a year and cost $10 million.

'With an incentive of 10 per cent guaranteed annual investment returns for the first five years, all 300 shops were snapped up by Hong Kong investors,' Mr Sum said.

Mr Sum has also turned the retail complex of Shun Hing Square, the tallest residential-office-retail building in Shenzhen, into a food and beverage destination called Deli City.

Deli City is now being offered for lease.

Wang Wancheng,  vice-president of Hong Kong-Macau Shopping Centre, said: 'China is just starting in this sector and will become a hot spot for consultants with experience in managing shopping centres.'

Hong Kong-Macau Shopping Centre, a rival of www.Dr.Mall, is experienced in repackaging shopping centres under themes and subleasing the retail space at higher rentals.

Its successful projects  include World of Kids' Wear and World of Men's Wear in Shenzhen.

The company recently renovated a 12,000 square-metre shopping centre on one of Shenzhen's busiest streets. The centre was renamed Cepa Hong Kong-Macau Shopping City.

'It has been fully let since it was offered for lease in April,' Mr Wang said.

The centre has 600 shops that rent for $500 per square metre to $700 per square metre a month.

Hong Kong-Macau Shopping Centre is offering tenants one-stop services, including the processing of tax documentation, advice on customs procedures and help with environmental issues.

Alan Wong, director of DTZ Debenham's retail department in Shenzhen, said the special economic zone's mall industry lagged behind those of Shanghai and Beijing, although Shenzhen was one of the wealthiest in China.

'Most shopping centres in Shenzhen are relatively small and owned by mid-tier local developers,' he said, noting that the size of these malls ranged from 100,000 sqft to 200,000 sq ft.

Emerging areas such as Longgan county and Panyu would provide ample opportunities for Hong Kong mall consultants, Mr Wong said.



China shops for mall experts