mall management

Mall ManagementPaper 580/2.6.2

Thesis & Case studySubmit by- Submit to-Kawinder jit Sakshi SharmaEnroll no.-5800800101

Intro to Mall Management

The management demands of a shopping centre are substantially beyond those of an office building or an apartment complex. These responsibilities are best

handled by a professional shopping centre manager; either an experienced staff person or an outside thirdparty consultant with experience in the operation of

shopping centres. The less experience the owner has in shopping centre management and/or ownership, the

greater the need for an experienced manager. A background in office building or apartment

management is not sufficient for a full charge shopping centre manager, especially in the super charged

environment of the Indian shopping centre market.

Intro to Mall Management cont:Mall management has been identified as a critical factor for the success of malls and the retail industry across the world. Mall management broadly includes mall positioning, zoning, tenant mix, promotions/marketing and

facility/finance management. Currently, the Indian retail market lacks designated mall management firms. Large real estate developers and retail

chains either have their own mall management arms operating as subsidiaries or have contractual agreements with international property

consultants. Till recently, mall management was limited to facility management by a majority of developers in India, leading to gaps in mall

management practices. Given the high future supply of malls and increasing competitiveness within the Indian retail market, developers must correctly address these gaps to ensure success. When you shop, you aren't just shopping -- you are performing a science. From the way you move your

eyes, to what path you take through the store, even items you touch on the shelves, is all part of how each individual consumer makes a purchasing choice. A store nowadays is usually intelligently designed with the aim to part consumers from their hard-earned money, and how easy it is to be

manipulated into spending more than was planned.

Malls trajectoryThe revolution in retailing industry has brought many changes and also opened door for many Indian as well as foreign players. In a market like India there is a constant clash between challenges and opportunities but chances favour those companies that are trying to establish themselves. So to sustain in a market like India companies have to bring innovative solutions. Indian market has potential to accommodate many retail players, because still a small proportion of the pie is organized. Organized retailing in India witnessed a gross turnover of USD 320 billion1 in 2006. Although this figure is low compared with other developed economies, industry experts expect the growth rate of this sector at 35% 2 until 2010. At present, about100 malls are operational at a Pan-India level with total area of 19 million sq ft. As per the current estimates, about 3003 additional malls are expected tope constructed across the country by 2010.specific to individual malls. We anticipate that the success of Indian malls will not only be achieved by housing the biggest and the best mix of retailers, but also by setting up new standards and procedures in mall management that will provide a platform to differentiate its products and services from competitors.

As organised retail grows, we expect the market to be more competitive by providing more choices to consumers and retailers.

At this point, developers will have to work harder to create a differentiation for their product. We believe consumers and retailers will be attracted to malls that are professionally managed, making effective mall management a critical factor behind the success of

a mall.

Malls are fast becoming sought-after entertainment hotspots. From a situation where there were no malls about a decade ago, the country will have over 300 malls translating to over 100 million

sq.ft. In available mall space by the end of 2007. Mall management is likely to be the next hottest trend in the Indian

retail market. There is planning for the development of 300 more malls. With such a strong move waiting for its turn, builders will have to learn things to ensure their success. There are around 100 exclusive shopping malls in India and 300 are scheduled to come up in the next levels of constructions. Data showcased by the study of Jones Lang La Salle Meghraj says that more than

90% are still not at par with the international standards

Mall Management will take care of the issues like positioning, tenant mix, infrastructure facilities, the kind of environment required, and

finance management which is the most crucial part of all. Mall management will also be highly helpful for builders and retailers. Unlike

earlier, property developers and retailers have come up on thesame platform which is better known as progressive partnership.

Therefore, success of both retailers and mall operators are dependent on each other’s efforts to render effective services to customers. Of the total mall space likely to be developed in India over the next two years, the share of the Capital City has been estimated to be 22 million sq ft. Following in footsteps will be Mumbai and Bangalore. The market size of Indian retail sector is believed to be USD 320 billion in 2006 and the

value is expected to grow 30% to 35% by 2010. Considering thegrowth of organized retail and increasing transparency in the sector, only professional malls will be able to survive among such a fiercer

competition.

MALL /SHOPPING CENTRE CATEGORIES

There is often a question as to the differences between managing a very high-end shopping centre and one that is aimed more at the middle to lower end of

the economic spectrum. Generally, day-to day management is the same for both with a few exceptions. High-end centres most often have much higher level of finishes, fewer kiosks, less banners and fewer amusements for children. In the

high-end centre the atmosphere is generally very serene, it may have substantial artwork, and a very high level of cleanliness and maintenance. Additionally,

restaurants and food operations are more high end and there are more personal services provided. High-end centres will almost always have valet parking, where a middle market centre may or may not offer that service. High-end centres will often have concierge services as do many middle centres, but in the high-end

centres they will often provide buying assistance, registration for gifts for weddings and showers, package carryout, tickets to major entertainment events and even in one case, transportation to and from the mall upon request. High-

end merchants are quite willing to pay higher rents and service charges, provided they are able to generate sufficient volumes to support those costs. It is

incumbent upon the owner to be sure that there are sufficient trained personnel to meet the needs of the shopping centre

Small Centre Organization The least complicated staffing is generally found in smaller shopping

centers

Centre ownership

Financial functions Centre manager Leasing director

Accounting

Lease administration

Contract marketing

Contract maintenance

Contract security

High end shopping centre organization

Centre ownership

Financial manager Marketing manager Accounting manager

Centre manager

Administrative assistant

Leasing director

Maintenance manager Security manager

Reports to owners Advertising &promotion Accounts payable Maintenance personnel Security personnel

Lease administration Display manager Account receivables Contract oversight Retailer coordination

Tenant sales analysis

Multiple Mall OrganizationCenter

Ownership

OutsideCertified Public Acc.

MarketingConsultant

CenterManager

LeasingDirector

SecurityDirector

MaintenanceDirector

FinancialManager

MarketingManager

AccountingManager

MaintenanceManager

SecurityManager

Reports toOwners

Advertisingand Promotion

AccountsPayable

MaintenancePersonnel

SecurityPersonnel

LeaseAdministration

DisplayManager

AccountsReceivable

ContractorOversight

RetailerCoordination

TenantSales Analysis

AdministrativeAssistant

FACTORS FOR SUCCESSFULSHOPPING CENTRE

MANAGEMENT• Technology Tools- computer programmes to provide the

oversight and control the maintenance of shopping centre

• Administration Programme -An effective administration programme will include lease summaries for all of the leases within the shopping centre, to include all lease changes and/or options during the lease term.

• Utility Management- utilities includes air conditioning, electronic logs for tracking security information

ROLE OF THE MALL MANAGER• Value Enhancement-The astute manager will spend a large amount of his

or her time visiting with the merchants to see how they are doing and what is working for them and what is not.

• Cost Management-The manager will be expected to maintain the property, at all times in first class condition, but at an effective cost.

• Maintenance• Accounting• Marketing• Tenant Programme -An effective temporary tenant programme is essential

for the good management of any larger shopping centre. This includes vacant spaces being utilized until they are leased to a permanent tenant as well as kiosks ,wall shops and cart vendors.

There is hundreds of million of square feet of retail real estate under development currently; and for the best to succeed, there is a need to operate these centres professionally. The need to give each one of them an identity, make them stand out with their own brand values and individual personalities in order to provide unique reasons for customers to visit. There lies a need to look into and apply the science of 'Mall Management

The mall management process broadly deals with design and development consultancy, marketing of the mall, finance and

administration, operations and tenant relationship or coordination

Designing & Development of Shopping Mall

Design Consideration Designing for Shopper’s experience Shopper’s Behavior and Buying habits Visual Impact Design consideration for physically challenged people New trends in shopping mall design like Media Architecture etc.

SHOPPING MALL DESIGNRequirements• Information centre• Anchor stores• Medium size outlets• Small size shops• Theatre -1000 capacity• Food Courts• Bowling Alley• Rentable Office Space• Administration Department• Maintenance Department• Electrical Department – Power Maintenance

SHOPPING MALL DESIGN cont:Building Services• Lifts & Escalators• Centralized A/C• Public rest rooms• Fire fighting system• Generator room & EB room• Safety & Security servicesParking• Temporary Parking –Site Level Parking• Permanent Parking – Building level – Basement &

multilevel parking

SHOPPING MALL DESIGN cont:• Getting the Basics Right: in terms of design and

management set-up. Design, not only to provide great customer experience but much more in terms of operational efficiencies.

• Transparency: An open book policy with the retailers and the way in which we administer the service charge. A better operations-oriented design would also bring efficiency in operational costs.

• Efficiency: How we maximise the income and returns from our shopping centres.

Design consultancy• THE ARCHITECT'S BASIC DESIGN• SHOPPING CENTRE OPERATIONAL BUDGETING We

need to prepare a Common Area Maintenance (CAM) or service charge budget, a realistic estimate of what it will cost to operate the centre

• EFFECTIVE MALL MANAGEMENT Shopping centre development encompasses a huge array of skills, development consultancy, design, leasing, marketing and asset and financial management. All of these disciplines are intrinsically linked; our failure to bring them all together, or to engage consultants who can, puts the entire project at risk

Design consultancy cont: Safety and/or security- the nine most potentially

dangerous areas, especially in the Indian context• Pedestrian vs. Vehicular movement, inside and outside

mall buildings.• Lifts• Escalators• Parking Areas• Fire Safety• Health & Hygiene specially in Food Preparation &

Service Areas• Railings & similar fixtures around atriums and cut-outs • Public Restrooms and other common facilities • Children Play Areas and other Entertainment Zones

Categorization of malls: A brief explanation of some of the different criteria used in

considering/categorizing shopping centers today is listed below • Catchment : ■ Regional: population in excess of 100000 people ■ District: population in excess of 40000 people ■ Local: population in excess of 10000 people.• Location: in -town, out –town ,sub-urban• Tenant Mix: The tenant mix can be interpreted into the design to inform the architecture to

represent a different character. For example, festival and tourist attractions can be represented in more frivolous and playful architecture, while up-market fashion retailing may be more formally represented.

• Style of Retailing: Shopping environments are now designed to cater for a specific tenant mix. For example, a centre based largely on quality clothing becomes a ‘fashion’ centre . Alternatively, selected fashion retailers can be grouped together alongside compatible homeware stores and upmarket catering to represent aspirational living – these centres are called ‘lifestyle’ centres. The architecture can be designed to complement or respond directly to the same aspirations.

• Combination with Other Uses: In addition to the complementary nature of retailing, catering and leisure/entertainment uses, there are other new types of shopping centre arising from the combination of shopping with other building uses in mixed-use developments. Some of these existed before in simpler guises, such as combinations with hotels and offices, while others are emerging as completely new formats

• Physical Form:The physical form of the built environment can differentiate a type of shopping centre. For example, in its simplest interpretation the difference between an open or an enclosed space can make fundamental differences to the qualities of the environment. This is especially important in addressing the ‘urban agenda’, in order to form open streets with naturally lit and ventilated spaces as opposed to internalised artificially lit and ventilated enclosed spaces

Mall management broadly includes:

• positioning a mall• zoning – formulating the right tenant mix and its• placement in a mall• promotions and marketing• facility management – infrastructure, traffic and

ambience management• finance management.

Positioning a Mall

Positioning a mall refers to defining the category of services offered based on demographics, psychographics, income levels, competition in

neighbouring areas and extensive market research of the catchment. For example, if the market research indicates that the average number of

households living in a particular area belongs to the upper middle class, then a high-end retail mall would suit the

location. An example of this practice can be seen in the upcoming malls, Select City Walk in Saket and DLF’s Emporio in Vasant Kunj. We believe

that these retail developments are prime examples of good mall positioning. These malls have been specifically designed after an

extensive market research, based on the catchment area of South Delhi. The malls provide high-end luxury products catering to the elite class (socio-economic classification A and B consumers) residing in South

Delhi. Positioning also refers to the location of the shopping mall. A good location defined in terms of factors like ease of access via roads, good visibility, etc. is considered as one of the prime prerequisites for a mall. Although other activities such as trade/tenant mix can be revisited

or redefined, the location remains fixed, making it an imperative factor for a mall .

Zoning – Formulating the Right Tenant Mix and ItsPlacement in a Mall

Tenant mix refers to the combination of retail shops occupying space in a mall. A right tenant mix would form an assemblage that produces optimum sales,

rents, service to the community and financiability of the shopping mall venture.

Zoning refers to the division of mall space into zones for the placement of various retailers. A mall is dependent on the success of its tenants, which

translates to the financial feasibility of the tenant inthe mall. Generally, there are two types of consumers

visiting malls – focused and impulse buyers. Thetime spent by focused buyers in malls is relatively

lower compared with impulse buyers who also enjoywindow shopping.

Promotions and Marketing

Promotional activities and events in a mall form anintegral part of mall management. Activities like

food festivals, handicraft exhibitions and celebrityvisits increase foot traffic and in turn sales volumes.

Organising cultural events has time and againproved vital in attracting consumers to a mall. Suchactivities may also act as a differentiator for a mall.

Developers can work on drafting marketing strategiesfor individual malls to meet the needs of the local

consumer base and the challenges of local, and insome cases, regional competitors.

Facility Management

Facility management refers to the integration of people, place, process and technology in a building. It also means optimal utilisation of resources to meet

organisational needs. It broadly includesinfrastructure, ambience and traffic

management

Facility Management cont:

1. Infrastructure Management – Infrastructure management refers to the management of facilities

provided to the tenants within the mall. This includes provision of adequate power supply, safety issues in

case of emergency and miscellaneous issues related to signage, water supply, sanitation, etc.. These form an integral part of mall management as they are the basic

amenities that any tenant would look for in a mall. Infrastructure management also includes risk

management issues such as essential safety measure asset liability and environmental audits as well as

emergency and evacuation training

Facility Management cont:

2. Ambience Management – The overall shopping experience provided for consumers

becomes an important factor for the success of any mall. Ambience management includes

management of parks, fountains and overall look of the mall. A mall is not just a place for shopping but is also a place where people spend their leisure time. In favorable, lush

green landscaping with seating facilities and the presence of food and beverage inside or outside the mall can increase foot traffic

Facility Management cont:3. Traffic Management – Traffic management

includes managing foot traffic into the mall and parking facilities. Foot traffic management involves crowd

management inside the operational area of a mall. The flow of people is related to the design of the mall and the

spatial distribution of its tenants. For example, a star-shaped mall tends to have a problem of crowding in the centre of the mall, as everyone has to pass through the centre while moving from one side to the other. Circular malls, on the other hand, would not have this problem.

They tend to have better pedestrian flow and less congestion. Managing parking facilities includes

provision of ample parking and maneuvering of cars in the parking lot.

Infrastructure Management

Power Safety Miscellaneous

Uninterrupted power supply with100% power backup

HVAC with adequate redundancyEmergency lighting in all areas

Fire-fighting and detectionsystem

Dedicated security system

Toilets – separate for customers andstaff

Building and floor directories detectionsystem

Dedicated security systemWater softening and purification

Signage directing customers towardselevators, toilets and fire exits

Finance Management

Professional financial management of a mall as a business venture is a must. Mall management also covers financial management, which involves monitoring and controlling of

various issues such as:•cash receipts and collection of income including rentals, service charges, car park receipts, electricity and other utility income•developing accounting systems to track the ageing of debts, payment delay patterns, bad debts and payment of all invoices and expenses•developing standard financial templates so that a detailed annual property budget is prepared•at times, organizing resources to deliver an efficient and effective annual external audit

Tenant mix

Introduction

The planned shopping centre or mall has become an important part of contemporary life style. It has been changing patterns of shopping as well as social and recreational activities since its first appearance in 1920s in the US: now malls are found almost everywhere in the world (Brown, 1992; Urban Land Institute, 1999). One of the major reasons for this creation was to engineer a better shopping environment and, thus, gain better operational performance. In this created shopping environment, negative agglomeration effects can be more easily eliminated or keep under proper control, further reinforcing favourable interactions among tenants. Consequently, agglomeration economies generated from the clustering of tenants are one of the most significant benefits to be pursued by retail managers.

What is a tenant mix ?

This cluster of tenants is referred to as the “tenant mix” by the shopping centre industry. It has been a long-term concern for shopping centre managers/operators and researchers in this area because of its significance in

establishing the shopping centre’s image and enhancing the synergies within the shopping centre. However, no satisfactory suggestions have been made for the best strategy for tenant mix; owners merely followed some

rules of thumb or their own experience. However, there is a still lack of operational principles to advise centre managers/operators how to perform this

crucial element for creating a pleasant shopping environment.

Tuning the Tenant Mix

The tenant mix will be influenced by the demographic survey and by the research into the likely demand of potential retailers.

Research Surveys- The research into potential retailers is usually completed by the commercial team and complements the

information required to consider the tenant mix.Wish List of Tenants - In the formative stages of a project, it is only

the anchor stores and major stores who are likely to show commitment to the project. The interest from the remaining shops

will, therefore, only be considered as a general indication. While the wish list of potential tenants can be prepared, a degree of flexibility

with this list will need to be maintained, as a proportion of it will change before completion of the project. The tenant mix should be wide-ranging and balanced to attract a wide field of customers. The mix should include a range of retailers to cover comparison fashion, household, leisure, specialty and anchor retailing. From the wish list

of tenants, for the purpose of establishing the brief, a broad assessment can be made of the likely spatial, loading, mechanical

servicing and delivery requirements of the different tenants

Tuning the Tenant Mix cont :

Balanced Mix - In parallel with the consideration of the optimum overall gross leasable area (GLA), an assessment should be made of the optimum number of

shops to be provided. The inclusion of anchor department stores, or an equivalent facility, is necessary in order to attract other tenants to the centre. As an incentive

to the department store to come into the scheme, they are offered lower rental arrangements and sometimes financial contributions towards their fit out costs. While the anchors are important, it is also necessary for the centre to have the

correct balance of anchors and unit shops, and not to have too large a proportion of anchor units. With the anchor stores paying little rent, it is important that there

is sufficient space for the higher rent paying unit shops, in order to make the scheme viable. Experience of successful shopping centres reveals that the

proportion of unit shops should be between 55 and 70 per cent of the total GLA for the scheme to be viable.

Catering/ food court/restaurants -While considering the number of shops and optimum area, it is also important to consider the type and extent of catering

facilities to be included in the scheme. each single unit can vary from 50sq.m (500 sq.ft) to 600sq.m (6500 sq.ft), from a café to a large restaurant. The requirement

for a fast food area with shared seating should also be established, along with the number of covers (seats), to be provided. When considering the catering strategy, a view should be taken as to whether the catering should be grouped together or

spread throughout the centre.

Tuning the Tenant Mix cont :Tenant Grouping- Centres that have tuned the mix to group together similar

tenants and tenants with a natural synergy have a more positive dynamic. Grouping tenants into similar types is more convenient for customers, particularly

in the larger centres where this grouping helps to reinforce a local identity and helps with customer orientation. The grouping of tenants can also be extended into the architectural character of the space to reinforce the identity and help customer way-finding around a centre. The tenant groupings tend to be

based on the generic types of shops such as:■ youth fashion■ aspirational fashion■ leisurewear and activities■ high street (retailers)■ homeware■ lifestyle■ perishable goodsIn practice, tenant groupings are simplified and tend to be organised into three or four broad types. Generic retailer types are combined together where there is a

natural synergy, for example, youth fashion combines with leisurewear, high street combines with perishable foodstuffs. Tenant groups may be loosely

defined at the briefing stage only to be pinned down as leasing agreements are finalised during the later construction stages of the project.

Tenant mix Empirical Analyses by Tony Shun-Te Yuo, Neil Crosby, Colin Lizieri and Philip McCann(The

University of Reading Business School Whiteknights, Reading RG6 6AW UK )Three sets of tests of the beneficial patterns of tenant mix variety are

conducted:first, given the proposition of the relationship between variety and

performance (rent), five operational variety indices - size of shopping centre, number of units, average unit size, number of retail/service categories and

number of brands - will be examined through econometric methods; second, the impact of concentration or diversity in tenant mix patterns are

tested using Herfindahl indices (The Herfindahl index (HI), also known as the concentration index, measures industry concentration by summing the

squared market shares of the firms in the industry. ) of retail/service categories and the number of brands within each shopping centre

third, the value of concentration on core categories and brands is tested by a factor analysis used to extract the exact core/periphery retail/service

categories from the tenant lists of the exiting regional shopping centres

What is Leasing ?

Leasing is, in essence, an agreement between two parties for the rental of

property (land or asset). It allows one party, the Lessee, to use an asset or property owned by another party, the

Lessor. The lessee makes the economic use of the lessor’s assets and pays in the

form of a rental for this privilege.

Basic Principles of Leasing

Types of Leases -Leases can be conducted in several different ways by varying the terms and conditions of the contract. However, these can be divided

in two broad categories - Finance Leases and Operating Leases.Operating Lease- An Operating Lease is a pure rental agreement with three distinctive features: (i) the cost of the asset is not fully amortized over the lease

period, (ii) the lessor provides maintenance of the asset, and (iii) the asset is usually returned to the lessor. Therefore, the lessee has the advantage of

procuring an asset, utilizing it for its benefit and returning the same when it has served its purpose.

Finance Lease - A Finance Lease is in essence similar to a loan because substantially all risks and rewards related to the leased assets pass on to the lessee. It is mainly characterized by (i) the asset being fully amortized over the lease period, (ii) the lessee is responsible for

maintenance costs, and (iii) the ownership is usually transferred to the lessee at the end of the lease. In this respect, the involvement of the

lessor is restricted to financier

Components of a Lease -

• Adjusted Lease Amount or Adjusted Capitalized Cost

• Security Deposit / Down Payment• Lease Term• Rental• Residual Value• Termination

Adjusted Lease Amount Or Adjusted Capitalized Cost

The starting point in the calculation of any lease payment is the capitalized cost. This cost is

equivalent to the "purchase price" of the asset and generally known as the lease amount. It is reduced by the amount of any security deposit /down payment, and miscellaneous charges. These adjustments are called capitalized cost reductions. After all adjustments are made, the final amount is referred to as the adjusted lease amount or adjusted capitalized cost. This is the

amount of financing provided by the lessor to the lessee.

Security Deposit /Down Payment

The security deposit, often termed as a Down Payment or Equity Contribution, is the amount

most Lessors obtain at the onset of a lease. This amount serves as a security for the lessor (apart

from the asset itself) and is refunded to the lessee at the end of the lease provided the terms and conditions of the lease contract have been met. For the lessee, a higher amount yields a

lower adjusted lease amount resulting in reduced rentals. Therefore, the lessee has to make a

trade-off between a higher security deposit and higher rentals.

Lease Terms and Measurement Concepts Net and Gross Leases

Net and Gross refer to whether the base rent includes operating costs. When a lease is Net, it means that the base rent being paid does not include building taxes,

insurance, utilities or other operating expenses. These must be paid for separately by the tenant. On the other hand, when a lease is a Gross lease, the tenant pays a lump sum each month, and all of these additional costs are included in the rent. Because of the many different

variations on these lease structures, it is highly recommended that practitioners refrain from using the terms “Gross” and “Net” in lease language. As a rule, it

is always better to spell out the actual obligations of the parties.

Lease Terms and Measurement Concepts

• Base rent – The initial rent that must be paid under the lease contract. For commercial space this is typically specified in dollars per square foot per year. For residential property this is usually specified in dollars per unit per month

• Asking rent – The stated base rent the landlord requests when advertising the space

• Contract rent – The base rent listed in the lease agreement. • Market rent – The rent that the space would command on the open market

if it were available for lease today. The market rent may differ from the contract rent because of changes in market conditions over time.

• Indexed leases – Indexed leases tie changes in the base rent rate to some pre-specified index such as the consumer price index.

• Step leases – Leases in which the base rent will change in the future by pre-specified amounts. Although rent payments will change over the term of the lease, unlike with an indexed lease the amounts to be paid are fully determined and known with certainty at the time the lease is signed.

Lease Terms and Measurement Concepts cont:

• Percentage leases – For retail properties, it is common for the landlord to receive a fraction of the tenant’s sales above some predetermined breakpoint. Sometimes this is called overage rent. In percentage leases, the natural breakpoint is the annual base rent divided by the overage rate. This is the level of sales at which overage rent will begin to be paid. Of course, it is possible for the tenant and landlord to negotiate a different contractual breakpoint.

• Gross lease – Also known as a full service lease. A lease in which the landlord will pay all operating expenses of the building

• Net lease – A lease in which the tenant must pay some or all of the operating expenses, maintenance, insurance, or property taxes. The specific meaning of a net lease varies from market to market, so each lease agreement must be analyzed carefully to determine which expenses are paid by whom. A lease in which the tenant pays part of the operating expenses is sometimes called a hybrid lease.

• Net net lease and net net net lease – Also known as double-net and triple-net leases, these terms refer to leases in which the tenant is required to pay for progressively more of the property’s operating expenses. Generally, a triple-net lease is one in which the tenant pays all operating expenses, taxes, and insurance. The specific expenses paid in double- and triple-net leases vary based on local conventions. A lease in which all expenses are paid by the tenant is sometimes called an absolutely-net lease


• Expense stops – Some leases require the landlord to pay operating expenses up to a given level, above which they become the responsibility of the tenant.

• Common area maintenance – This is a common expense pass-through in which the landlord pays for the expenses of operating and maintaining common areas, and these expenses are charged back to tenants on a pro rata basis.

• Rent Concessions – Many lease agreements provide for initial concessions to “sweeten the deal” for the tenant (e.g., several months free rent or above-normal tenant improvements).

• Tenant improvements – Improvements or changes made to the property for a new tenant to make the space suitable for their needs.

• Building Measurement• The terms outlining how office spaced is measured are based on

standardized definitions created by the Building Owners and Managers Association (BOMA).


• Gross measured area – Also known as gross building area or gross square feet. The entire physical area of all floor space in a building.

• Total rentable area – Also known as gross leasable area or rentable square feet. This is the area for which rent can be charged, including the tenant’s usable area and any common areas for which tenants are charged on a pro rata basis. For the entire building this is the gross measurable area minus any vertical penetrations (e.g., elevator shafts, vents, stairways, etc.).

For a given floor this is the gross measured are of the floor minus major vertical penetrations.

• Common areas – Floor common area is the space on a given floor that is for the common use of all tenants on that floor (e.g., elevator lobby, bathrooms, mechanical rooms, etc.). Building common area includes space for the common use of all tenants in the building (e.g., main lobby, mail room, etc.).


• Usable area – Also known as office area or usable square feet. The secured area occupied exclusively by a tenant within a tenant’s leased space. Equals rentable square feet minus common areas.

• Add-on factor – Also known as the load factor or the common area factor. The add-on factor is calculated as rentable square feet divided by usable square feet. It is used to calculate the total number of square feet for which a tenant will pay rent given the usable area.

• Efficiency percentage – The ratio of usable to rentable square feet (the inverse of the add-on factor). This shows what fraction of a building’s rentable space is actually available for the exclusive use of tenants .

Rental

The rental represents periodic payments of agreed rent over the lease term. It

represents a charge for the depreciating asset as well as a rent charge. The rent

charge includes the cost of funds, overheads and services being provided by

the lessor. It is the compensation that a lessor claims for providing the lessee the

economic use of the asset.

Residual Value

The residual value is the amount the asset is considered to be worth at the end of the

lease. It is generally expressed as a percentage of the lease amount. In cases where the ownership is transferred to the lessee, the residual value forms the sale price. Like the security deposit, a higher

residual value can lower the rental payments.

TerminationMost leases cannot be terminated before the end of

the lease by design. Terminations are possibleif the lessee wants to payoff the lessors or when a

forced termination is undertaken in the event that the underlying assets are destroyed, i.e. stolen or made

unproductive. If one terminates the lease early, he has to pay for the privilege. For the lessor, an early

termination results in generating an unexpected cash inflow. The lessor looses the expected income from the

lease until the terminated amount is redeployed in another investment. Generally, lessors charge a penalty for early termination to avoid this loss of

income.

Benefits of Leasing: Leasing offers many substantial benefits both for the lessee and the lessor. The following are some of

the benefits that a lessee can derive from a lease.

1. Leasing is acceptable within the Islamic modes of finance as fixed rental payments are made and interest is not involved.

2. Large lease payments are fully tax deductible at the time of payment, therefore an incentive may exist to load payments into a particular tax year.

3. Lower present value of after-tax leasing costs compared to purchase costs.4. Leasing provides long-term lending at fixed rentals.5. Leasing assures maximum conservation of capital as it makes large investments in

fixed assets unnecessary. The lessee can use this for other purposes such as working capital, trade debts, and seasonal expenditures.

6. Leasing permits conservation of existing lines of credit that can be used for other purposes.

7. Leasing guards against technological obsolescence.8. The terms and conditions are flexible and can be customized for the lessee.9. Lease rentals can be structured in accordance with the Lessee’s cashflow

requirements.10. Leasing being long-term provides a hedge against inflation.11. Facilitates capital budgeting as rental payments are fixed.12. Off balance sheet financing may enhance ability to borrow by improving apparentliquidity and enhancing return on investment.

Lease vs. BuyThe primary difference between Leasing and Buying is the

ownership of the asset. A straight purchase gives a person an immediate ownership of the asset. However, in a lease, the

ownership of the asset vests with lessor. The lessee benefits from the economic use of an asset that does not belong to him.

A closer look reveals that it is the usage of the asset that is important rather than its ownership. The economic benefit of the asset lies with a person whether he leases or buys the

asset. For personal usage, it is the pleasure of say, driving a new car. For business purposes, it’s the usage that translates

into profits. Another difference is the initial cash outlay requirement. When buying, a person pays the cost of the asset as a lump-sum amount at the onset. However, leasing enables

a person to pay only a part of the cost (down payment) and begin utilization of the asset before repaying the full amount. The remaining amount is repaid with fixed payments over a

period of time.

Understanding Satisfaction Formation Of Shopping Mall Entertainment Seekers

Entertainment consumption is a common activity in the shopping centre environment. However, very little

research has examined the concept of entertainment consumption in the shopping centre context. Hence, this conceptual paper presents a research model which aims

to understand shopper satisfaction with entertainment consumption. The proposed model is an extension of the

recent work conducted by Sit, Merrilees and Grace (2003). The model comprises five key constructs,

namely hedonic motives, functional evaluation, affective evaluation, overall satisfaction, and

behavioural loyalty.

Shopping Mall Entertainment Seekers cont:

A shopping centre caters to a diversity of shopper segments including the convenience shopper and the

entertainment shopper However, some shopper segments are not enthusiastic about entertainment

consumption, for example the convenience shopper. However, this proposed study focuses primarily on

understanding the satisfaction formation of ‘pro-entertainment’ shopper segments, such as the

entertainment shopper. Shopping centre entertainment can be classified into three categories, namely special event entertainment, specialty entertainment and food

entertainment

Shopping Mall Entertainment Seekers cont:

The key distinction between these entertainment categories is their length of operation. For example, special event

entertainment is offered on an occasional, temporary and discrete basis and includes events such as fashion shows and celebrity signing. Conversely, specialty entertainment and food entertainment contribute to the more permanent tenant mix of a shopping centre. Specialty entertainment involves movie theatres and video arcades, while food

entertainment includes a range of eateries, cafés or restaurants. Shopping centre entertainment is emerging a

major element of shopping centre innovation worldwide

Discussion of Key Constructs

Hedonic Motive.

Hedonic motives reflect the psychological forces which predispose a

shopper to engage in entertainment consumption. These forces are beyond task completion or purchasing product in a deliberate and efficient manner .

Instead, hedonic motives are driven by the potential enjoyment, fun and adventure offered by entertainment consumption. Indeed, a review of the

leisure literature reveals three dimensions of hedonic motive which may be relevant to entertainment consumption. They are ‘affiliation’ (e.g. I thought the family would enjoy it, the family can do something together, to watch other people, to enjoy the crowds), ‘escapism’ (e.g. to have a break from my shopping, to get away from my daily duties, to have something to do),

and ‘novelty’ (e.g. I like to try different food, I like the variety of things to see and do, it was interesting because it was something different)

Functional Evaluation

Functional evaluation is concerned with the appraisal of the tangible attributes of entertainment consumption. The nature of functional attributes will differ between specialty entertainment, special event entertainment

and food entertainment. For example, functional attributes which are important to food entertainment

may include the variety of eateries, friendly service and convenience, while functional attributes for special

event entertainment may include the ability to easily view the event (visibility and perceived crowding).. A list of generic functional attributes which may be applicable

to all three entertainment categories is yet to be developed.

Affective Evaluation

Affective evaluation represents the appraisal of affective characteristics of entertainment consumption. That is,

emotions or feelings induced byentertainment consumption. The emotions

of pleasure and arousal identified in theenvironmental psychology theory are

deemed to be relevant to entertainment consumption

Overall Satisfaction

Overall satisfaction reflects the summative assessment of entertainment consumption

as being satisfying or dissatisfying, and reflects the general impressions of

shoppers with the activity

Behavioral Loyalty

Behavioral loyalty reflects the preference and continued support of a shopper for

engaging in entertainment consumption. Thus behavioural loyalty generally is

measured by intentions for repeat consumption, increased spending, or to

recommend to others.

To clarify aforesaid Mall Management review. We take a conceptual work of Essel

group venture in Mall Management

E-City Property Management & Services (India) Pvt Ltd (EPMS): An E-City Venture company that provides the most comprehensive and reliable mall/property management and retail services in India, including overall operations, marketing, consultancy, occupant management, retail leasing services and advisory services. EPMS, one of the biggest mall management companies in India, manages over 3 million square feet with twelve premier and successful malls in nine cities, two corporate office spaces in Delhi and one school in Gurgoan. EPMS, by 2011, would manage and market 20 million sq ft of premium real estate in India.

EPMS LegacyEPMS, One of the constituent

companies of E-City Ventures (An ESSEL GROUP Enterprise)

1. • EPMS2. • E-City Entertainment (I) Pvt.

Ltd.3. • E-City Digital Cinemas (P) Ltd.4. • E-City Films (P) Ltd.5. • Fun Multiplex (P) Ltd.

Objectives• To provide World Class

Management Outsourcing for Real Estate Infrastructure

• To provide cost effective, productive & quality services

• To create the biggest, specialized manpower database

• To maximize tenant cash flows and continual occupancy

Core Values

CustomerIs the

Superstar

Integrity

PeopleFirst

Innovation

EPMS – PostOperation Services

Accounting&billing

Parkingmanagement

Wastage management

Façadecleaning

Securitymanagement

Housekeeping

BMS

O&M

Occupantmanagement

Marketingmanagement

EPMSservices

EPMS - Property Management Services

• Technical Operation & Maintenance

1. Power generation& distribution

2. Periodic Energy Audit3. HVAC Systems4. AMC Coordination5. Fire Fighting systems6. Inventory Management

• Occupant Management

1. Billing &Collection2. Periodic Feedback3. Attending Grievances4. Helpdesk5. Co-ordination


• Housekeeping1. Scheduled Cleaning of

Areas2. Floor Polishing3. Debris Removal4. Mechanized Cleaning5. Replenishment Public

Amenities

• External Cleaning1. Façade Cleanings2. Floor Polishing3. Water Tank Cleaning4. External Glass

Cleaning5. Mechanical6. Road Sweeping


• Waste Management1. Waste Collection2. Storage3. Removal4. Sorting

• Security Management

1. In-Out moment Records

2. Day\Night Security Watch

3. Control Systems4. CCTV Monitoring 5. Managing Public &

Private Area


• Parking Management

1. Daily Inflows2. Managing Park

Vehicles3. Daily Reports4. Collection Of Park

Charges

• Marketing1. Space-Signage's2. Event Marketing-

Celebrity’s Endorsements

3. Enhancing Footfalls Customer Feedback

EPMS – One Windowfor All Services

EPMS 6 “Ps” Mantras1. PRICING - Competitive2. PLACE - PAN India3. PEOPLE - Experienced4. PROCESS - 6 Sigma5. PROMOTION - EnhanceFootfalls6. PASSION - Clients & CustomersOriented

EPMS –Value Addition Model

Customers Retailers

Developers

EPMSValue model

EPMS Value Addition Model

Developers• Generate Income• Price Appreciationof Malls• High RetailersRetention• Regular Income

Retailers• More Clients• Increase inIncome• Better Relations• Better Services

Customers• More Range ofProducts• Good Ambiencein Malls• Regular Visits of mall

EPMS – Contract Model

EPMS

Cost to Cost

Fixed (Actual) Variable (Actual)

Operations Manpower CostManagement Fee

Electricity/ DG /TelephoneConsumables & Equipments

R&MAdministrative

Our Business –To better yoursBusiness

EPMSThe Client

Property Services

Value toThe Client

Value to the client -Cost Reduction thru•Energy Savings•Reimbursable & Actual•Group SynergiesPassion for Client•Management Support•Cost Saving Analysis•SQI & CRP AnalysisResponse Time•Mapped as per client.Process DrivenOperations•PreventiveMaintenance•Checklist for everyprocess•Proactive Approach

EPMS Management Model

EPMS Management• Management of the Facility team• Property Administration• Management Reporting (SLA and KPI)• Coordination with future vendors

Cleaning Services• Daily Cleaning• Window Cleaning• Waste Management• Special cleaningtasks• Washroom Services

Security Services• Internal Guardand Security• Entry Exit PointSecurity• CC TV• In/Out MaterialMovement• ParkingManagement

Support Services• Reception• InternalServices/Logistics• Space management• Event & MarketingManagement• Accounts• Bills & Collections

Property Services• Power Supply Management• Horticulture• Pest Control• HVAC• M & E:• Systematic maintenance, Technical Installations ,Plumbing, Indoor maintenance, Indoor tropical plants• Miscellaneous Civil Job

EPMS Flowchart

Vice PresidentOperations

ManagerAccounts

ManagerOperations

Client

ManagerTechnical

MarketingManager

SecurityManager

HousekeepingManager

EPMS Support Formats• Quality Assurance Reports (QAR)• Occupant Satisfaction Reports (OSR)• Daily Reports & Monthly Reports (MIS)• Monthly Audits Reports (MAR)• Site specific operating manuals (SOP’s)• Data Recording• Key Performance Indicators (KPI’s)

mall management

Documents