DEPARTMENT OF ESTATE MANAGEMENT FACULTY OF ARCHITECTURE, PLANNING AND SURVEYING UNIVERSITI TEKNOLOGI MARA SHAH ALAM

A NON-PERFORMING SHOPPING MALL CASE STUDY: ANGGERIK MALL SHAH ALAM, SELANGOR

This project prepared to fulfill part of condition for the Conferment of Bachelor (Hons) Estate Management

VICTOR VINCENT 2008309805 SEPTEMBER 2011 JANUARY 2012 i

STUDENTS DECLARATION

Academic Project Title:

A NON-PERFORMING SHOPPING MALL

I declare that this report is the result of my own research, unless otherwise indicated or acknowledge as referenced work. In the event that my report be found to violate the conditions mentioned above, I voluntarily waive the right of conferment of degree and agree be subjected to the disciplinary rules and regulations of Universiti Teknologi Mara

Signature Authors Name Declaration Date

: : :

. VICTOR VINCENT OCTOBER 2011

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SUPERVISORS DECLARATION

Academic Project Title:

A NON-PERFORMING SHOPPING MALL

I admit that I had read this report and from my opinion it has fulfilled the requirement and qualified for the purpose of conferment of Degree of Bachelor of Estate Management (Hons)

Signature

. NORINI AWANG OCTOBER 2011

Supervisors Name : Declaration Date :

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ACKNOWLEDGEMENT

There has been one year from the conception stage to the completion of writing this report. The process involved the contributions and efforts of many individuals. Without their genuine and valuable support, this research project may not have been brought to its completion.

I wish to express my heartfelt thanks to my supervisor Hjh. Norini Awang, Associate Professor for her perceptive guidance, encouragement, criticisms and helpful advice.

I would like to also express my deepest appreciation to my parents, friends and my classmates. Their encouragement and assistance have contributed to the completion of this research report.

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ABSTRACT

Malaysian has changed their pattern of shopping ever since the year 1973 when the first shopping mall in the country, Ampang Park was built. Their preferences had shifted from shopping at the traditional marketplace to the modern indoor shopping mall. Visitors prefer to shop at a place with comfortable surroundings, variety of goods to shops from, and provide better facilities such as parking. Success of modern shopping centres relies on a number of critical success factors such as attainability, effortless business, service variety, ambience, active marketing and cleanliness. Anggerik Mall is one of the newest shopping malls located at Shah Alam city centre. Among six most recognized shopping malls (PAS, PKNS Complex, Plaza Shah Alam, SACC, Ole-ole and Anggerik Mall) in territory of Shah Alam, Anggerik Mall is the least prefer shopping mall. This study aims to identify factors contributing to failure of Anggerik Mall in attracting visitors and to suggest possible ways to increase its performance. Examination of these factors was conducted from observation and substantiation through secondary data. It is found that factors contributing to Anggerik Mall underperformance falls under two categories, which are major factors consist of poor visibility, absence of concept or theme, absence of strong anchor tenant and poor maintenance; and minor factors consist of less complementary tenant mix, small range of offered facilities and inefficient promotional activities. In order to overcome these deficiencies, suggestion to create Beauty and Healthcare Mall; to have new suitable anchor tenants and tenant mixing; to have better signage; to build a bus stop; to put up a re-launching event; to conduct continuous promotion; to add new facilities; and to impose higher rent were made.

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TABLE OF CONTENTS

CHAPTER

ITEMS COVER PAGE STUDENTS DECLARATION SUPERVISORS DECLARATION ACKNOWLEDGEMENT ABSTRACT TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES LIST OF APPENDICES

PAGE i ii iii iv v vi ix xi xii

CHAPTER 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7

INTRODUCTION Introduction Problem Statement Objectives Scope of Study Research Importance Methodology Structure of Study 1 2 3 3 4 4 5

CHAPTER 2 2.1 2.2 2.3 2.4 2.5

LITERATURE REVIEW Definitions of Shopping Centre Characteristic of Shopping Centre Types of Shopping Centres Review of Shopping Centre Development across Malaysia Factors Contributing to Success of a Shopping Centre
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2.6 2.6.1 2.6.2 2.7

Reviews on Successful Shopping Centres in Malaysia Mid Valley Megamall Shaw Centrepoint Conclusion

14 14 17 19

CHAPTER 3 3.1 3.2 3.3 3.4 3.5 3.5.1 3.5.2 3.5.3 3.5.4 3.6 3.7 3.8 3.9 3.10

INTRODUCTION TO CASE STUDY Background of Anggerik Mall Location and Catchment Area of Anggerik Mall Accessibility Design and Parking Layout Floor Layouts Ground Floor Layout First Floor Layout Second Floor Layout Third Floor Layout Facility Building Management Tenant List and Rental Rate Promotion Conclusion 21 22 26 29 31 31 32 33 34 35 35 37 42 43

CHAPTER 4 4.1 4.2

ANALYSIS AND DISCUSSION Introduction Analysis and Discussion of Factors Contributing to Anggerik Mall Underperformance 4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 4.2.6 Location Accessibility Visibility Design and Layout Anchor Tenants Tenant Mix
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47 47 48 49 50 51 52

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4.2.7 4.2.8 4.2.9 4.3

Maintenance Facility Promotion Conclusion

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CHAPTER 5 5.1 5.1.1 5.1.2 5.1.3 5.1.4 5.1.5 5.1.6 5.1.7 5.2

SUMMARY AND CONCLUSION Recommendations Create a Special Theme Mall New Anchor Tenants and Tenant Mix Better Signage Build a Bus Stop In Front of Anggerik Mall Active Promotion Better Building Facilities Higher Rental Rate Conclusion 58 58 59 60 61 61 61 62 62

BIBLIOGRAPHY APPENDICES

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LIST OF FIGURE

NO OF FIGURE 1.2.1 3.1.1 3.2.1 3.2.2 3.3.1 3.3.2 3.3.3 3.3.4 3.4.1 3.5.5.1 3.5.5.2 3.5.5.3 3.5.5.4 3.6.1 3.7.1 3.8.1 3.9.1 4.1.1

ITEMS Geographical Location of Anggerik Mall Anggerik Mall Front View Anggerik Mall Location and Catchment Area Shah Alam City Centre Anggerik Mall Sidewalk and Entrances Rapid KL T601, T602, T529, U80 and Seranas Route Network of Roads to Anggerik Mall Anggerik Mall Vehicle Entrances and Exot Anggerik Mall All Sides View Anggerik Mall Ground Floor Layout Plan and Pictures Anggerik Mall First Floor Layout Plan and Pictures Anggerik Mall Second Floor Layout Plan and Pictures Anggerik Mall Third Floor Layout Plan and Pictures Anggerik Mall Facilities Anggerik Mall Building Management Company Anggerik Mall Tenants Anggerik Mall Event Pictures of Vacant, Abadoned and Locked Lots Inside Anggerik Mall

PAGES 3 21 22 23 26 27 28 28 29 31 32 33 34 35 35 42 42

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4.1.2

Pictures of Vacant, Abadoned and Locked Lots Inside Anggerik Mall 46 47 50 51

4.2.1.1 4.2.4.1 4.2.5.1

Anggerik Mall Location and Catchment Area Anggerik Mall Second Floor Layout Plan Anggerik Mall Anchor Tenants
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4.2.6.1 4.2.6.2

Women Apparels and Accessories Shops in Anggerik Mall Food Courts, Salon and Computer Gadget Store in Anggerik Mall

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4.2.6.3 5.1.3.1

Anggerik Mall Office Spaces Signboards Location for Motorist

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LIST OF TABLE

NO OF TABLE 3.2.1 3.7.1 3.8.1 3.8.2 3.10.1 4.2.7.1

ITEMS Shah Alam General Infrastructures Anggerik Mall Type of Management Anggerik Mall Rental Rate Anggerik Mall Latest Tenant List Summary on Anggerik Mall Rental Comparison between Anggerik Mall and Plaza Alam Sentral

PAGES 25 36 37 41 43

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LIST OF APPENDICES

APPENDICES

ITEM Anggerik Mall Tenant Lists (January 2009) Anggerik Mall Floor Plans 64 64

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CHAPTER 1

INTRODUCTION

1.1 Introduction

Malaysian has changed their pattern of shopping ever since the year 1973 when the first shopping mall in the country, Ampang Park was built. Their preferences had shifted from shopping at the traditional marketplace to the modern indoor shopping mall. Visitors prefer to shop at a place with comfortable surroundings, variety of goods to shops from, and provide better facilities such as parking. In other words, they prefer to shop in comfortable shopping mall which has series of stores that well-mixed with all the facilities that make it convenient for them.

Shah Alam is one of the cities that has number of shopping malls such as Plaza Alam Sentral, (PAS), SACC Mall, Plaza Shah Alam (formerly known as Shah Alam Mall, also known as Plaza Masalam), Ole-Ole Section 18, Kompleks PKNS and Anggerik Mall. The number of shopping malls available in Shah Alam can be logically reasoned because of its population and potential. Shah Alam is the capital city of the state of Selangor; ranked at 7th as the most populated city in Malaysia with population of 671,282; and has several of public and private institutions of higher learning such as Universiti Teknologi Mara, Universiti Industri Selangor, Management and Science Universiti, PTPTL College and many more.

Shopping malls in Shah Alam are mostly situated at the vibrant commercial areas, which are at the city centre, Section 14, Section 13 and Section 9. Supposedly, running a shopping mall around these areas should be a success. However, having a blessed location alone does not guarantee sucess. There are many other interconnected factors influence the performance of a shopping mall.

Anggerik Mall is one of the newest shopping malls located at Shah Alam city centre. The shopping mall seems non-performing as it does not have many visitors and few lots in COPYRIGHT UiTM
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the building are unoccupied. Located at a blessed location, Anggerik Mall becomes the ideal case to be studied in determining factors contributing to a non-performing shopping mall.

For this purpose of dissertation, the underperforming Anggerik Mall will be studied in an effort of bringing in to its true potential.

1.2 Problem Statement

Among six most recognized shopping malls (PAS, PKNS Complex, Plaza Shah Alam, SACC, Ole-ole and Anggerik Mall) in territory of Shah Alam, Anggerik Mall is the least prefer shopping mall. Although this is only a rough assumption without latest and specific study has been made, Anggerik Mall certainly has issues. For instance, a statement stated by tenants picked from article of Selangor Kini on 4 th August 2009, premises which lease to them from Maljis Amanah Rakyat (MARA) since last 2007 has low response because the absent of promotion and no clear direction. A tenant from this article named Abdul Rahman said, about 120 tenants in Anggerik Mall have been enduring and continue their operation at the rented premises even though the response is low. They, in about 120 tenants, in obtaining profit of RM30 RM40 per day is hard. Her friend, Sabariah has to look for customers outside in order to cover the rental because there are no visitors at the mall. (Persatuan Usahawan Anggerik Mall Persoal Tindakan Inno Elegan , 2009)

Anggerik Mall is a 4 storey shopping mall which consists of 21 units of shop at ground floor; 14 units of food courts and 36 units of shop at first floor; 41 units of office at third floor; and MARA office at fourth floor. The best quality of Anggerik Mall is its location. It is situated at Section 14 of Shah Alam that conveniently accessible from Federal Highway, NKVE and GCE and strongly supported by an impressive population of around 671,282.

Anggerik Mall is blessed with very a strategic location in highly a populated area. Therefore, it could fetch way more than what is fetching currently.

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Figure 1.2.1 Geographical Location of Anggerik Mall

1.3 Objectives

The study has two (2) objectives and set out as follows:-

i.

To identify factors contributing to failure of Anggerik Mall in attracting visitors.

ii.

To suggest possible ways to increase Anggerik Mall performance according to findings.

1.4 Scope of Study

The scope of study for this research is limited to factors contributing success of all shopping malls that found in previous studies and books. All these factors will be checked to ensure fit with Anggerik Mall.

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1.5 Research Importance

The importance of this study is to find out contributing factors to non performing shopping mall. For this particular study, the research is specifically focus to non-performing Anggerik Mall.

Anggerik Mall has the potential to be a destination of choice for shopping and leisure experience through right strategies. Owner could obtain promising income in long-term and tenants would able to enjoy the benefits of being a part in highly visited shopping mall. Supposedly tenants could increase their income and productivity once Anggerik Mall implemented the right strategies. In addition, neighbouring community would have a convenient shopping and entertaining place to fulfil all their needs and wants without the hardship to travel farther than necessary.

1.6 Methodology

The data and information for this research is planned to be obtained through two (2) qualitatively methods, namely desk research and observation.

i.

Desk Research

Secondary data will be collected from various reliable sources such as journals, books and articles that related to the subject matter. It is beneficial as secondary data can provide information that already found and known about the subject before extended to own observation. Secondary data will be selected carefully to make certain of the data quality and suitability.

ii.

Observation

Anggerik Mall and its neighbouring conditions planned to be observed and studied. Observation will be focused on the mall itself from design, positioning and tenants. This observation is meant to identify the lack of Anggerik Mall that

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contributing to its underperformance. Primary data obtained through observation is more genuine as no actually interaction exists with respondents.

1.7 Structure of Study

This study is entirely presented into five chapters. In brief, the structures of this study are as below:-

The first chapter sets out the introduction, problem statement, objectives, scope, importance and methodology of the study.

Chapter two provides general aspect of shopping mall and factors influencing its performance which comprise of definitions and literatures. Chapter three then provides the context of the study. Anggerik Malls background, location, accessibility, design, parking layout, floor layout, facilities provided, management practiced, tenants, rental rate and promotion is reviewed in this section.

Chapter four is devoted to the analysis and discussion of these case study findings. Primary data from observation and secondary data analysis is the main content of this chapter.

Chapter five summarises the whole study within the objectives set earlier. This chapter will include conclusion and recommendation for Anggerik Mall that drawn based on the analysed findings.

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CHAPTER 2

LITERATURE REVIEW

This chapter is aimed to provide understanding of the terms involved in this study. It first draws on the definitions of the shopping centre, types and characteristics. This chapter then continues to review factors contributing to shopping centre success found through previous studies, books and articles.

2.1 Definitions of Shopping Centre

According to J. McKeever in his article published on Urban Land Institute Technical Bulletin Vol. 20, shopping centre is a group of commercial establishments, planned, developed, owned, and managed as a unit, with off-street parking provided on the property (in direct ratio to the building area) and related in location, size (gross floor area), and types of shops to the trade area that the unit serves generally in an outlaying or suburban territory.

In other words, shopping centre can be defined as a collection of business activities that planned, developed, owned and managed as a unit.

Similar to definition made by J. McKeever, Clifford Guy in his book, The Retail Development Process, defines shopping centre as a planned retail shop unit in terms development comprising one or more anchor stores and several small units, in one building or an architecturally unified group of buildings, and usually with a single landlord. W.G. Rouse in his book Real Estate Encylopaedia defines shopping centre as a group of shop units that are built as one unit owned by an owner with car park meant to give comfort to costumers and visitors.
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In brief, Kamus Dewan Bahasa defines shopping centre as a building with several different shops and restaurants, together with a car park.

Therefore, it can be concluded that shopping centre is a building or main spot for several of shopping and other activities took place. It is a large and modern marketplace where foods along with other necessities are sold.

2.2 Characteristic of Shopping Centre

Following are among the characteristics of shopping centre from Shopping Centre Development Handbooks, an Urban Land Institute Publication:-

i.

Shopping centre has integrated design and provides retail spaces that can be managed as a unit for all tenants benefits;

ii.

Shopping centre is easily access through sufficient entrance and exit passage for vehicles as well as pedestrians;

iii.

Shopping centre has adequate car park and it should be located and arranged for visitors maximum comfort. Distance to walk from the car park to the main entrance and shop lots should be in acceptable length;

iv. v.

Shopping centre has loading dock for tenants and visitors; Shopping centre has improvement for landscape, lighting and signboards to create interesting plus safe shopping atmosphere;

vi.

Shopping centre has combination of tenants that support each other and can offer wide range items for visitors to shop; and

vii.

Shopping centre provides modern facilities for the comfort of visitors and costumers.

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2.3 Types of Shopping Centres

Mall is a type of shopping centre that typically enclosed, with a climate-controlled walkway. There are many classifications given for shopping centres. Some categorizes it according to size; whether it is small, medium or large. Some categorizes it according to functions. Following are several categories of shopping centres according to function by International Council of Shopping Centres (1999):-

i.

Neighbourhood Centres;

This centre provides conveniences shopping for the daily needs of consumers in the immediate neighbourhood. Roughly, about half of these centres are anchored by a supermarket, while about a third has a drugstore anchor. These anchors are supported by stores offering pharmaceuticals and health-related products, sundries, snacks and personal services. A neighbourhood centre is commonly arranged in straight-line strip without enclosed walkway or mall area. Sometime a canopy may connect the storefronts.

ii.

Community Centre;

A community centre normally offers a wider range of apparel and other soft goods than the neighbourhood centre does. Among the common anchors for community centre are supermarkets, super drugstores, and discount department stores.

iii.

Regional Centre;

This centre type provides general merchandise (a large percentage of which is apparel) and services in full depth and variety. Its main attractions are its anchors: traditional, mass merchant, or discount department stores or fashion specialty stores. A typical regional centre is usually enclosed with an inward orientation of the stores connected by a common walkway and parking surrounds the outside perimeter.

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iv.

Superregional Centre; and

Similar to a regional centre, but because of its larger size, a superregional centre has more anchors, a deeper selection of merchandise, and draws from a larger population base. As with regional centres, the typical configuration is as an enclosed mall, frequently with multilevel.

v.

Fashion/Specialty Centre.

A centre composed mainly of upscale apparel shops, boutiques and craft shops carrying selected fashion or unique merchandise of high quality and price. These centres need not be anchored, although sometimes restaurants or entertainment can provide the draw of anchors. The physical design of the centre is very sophisticated, emphasizing a rich decor and high quality landscaping. These centres usually are found in trade areas having high income levels.

There are many other types of shopping centres like power centre, theme/festival centre and outlet centre. From these types of shopping centres, it can be concluded that Anggerik Mall falls under Regional Centre since its fit the criteria.

2.4 Review of Shopping Centre Development across Malaysia

In the late 1980's, a cluster of retail outlets and other facilities into a single building was brought by foreign retailers, mostly Japanese. Almost all of the shopping malls had a wide range of recreational and dining facilities besides retail outlets. Most Malaysians feel shopping malls are places for family outings, social events or simply relaxation. This modern form of retailing were only exists in big cities where the population is more than 500,000 people like Kuala Lumpur, Penang and Johor Bahru. These shopping malls provide "one-stop shopping, and their popularity was on the rise. Many of the large trading groups are involved in planned shopping malls and have well-established connections with retailers and foreign companies (Rohaizat Baharun).

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A survey of retail performance in the Klang Valley and Malaysian retail chain stores show that overall business has improved after the Asian economic crisis in 1997. Surveys of chain stores in 1999, showed a general increase in turnover above 10 per cent for most fashion, grocery, and convenience categories in the Klang Valley (New Straits Time, 2000).

Today, there are numerous shopping malls in Klang Valley such as Midvalley, Suria KLCC, Lot 10, Sogo, Bukit Bintang Plaza, 101 Mall, Ampang Park, Subang Parade, Jaya Jusco Bukit Raja Plaza, Sunway Pyramid and many more. Besides Klang Valley, the northern region also experienced remarkable growth of shopping malls. For example, Komtar, Summit Square Penang, Megamall Penang, Ocean Sungai Petani, Central Square Sungai Petani, City Plaza, City Point, Putra Plaza and many others.

2.5 Factors Contributing to Success of a Shopping Centre Location is the primary concern for every shopping centre. Location, location, location used to be the mantra of every successful retail development. However, location alone does not guarantee success for today shopping mall. There are a lot of factors contribute to success of a shopping centre.

According to Arto Lindblom, Professor of Retail and Channel Management at the Helsinki School of Economics, the success of modern shopping centres relies on a number of critical success factors. These factors include attainability, effortless business, service variety, ambience, active marketing and cleanliness.

Success in this case is defined as a shopping centre with few or no vacancies, a high level of shopping activity, and, in general, an owner and manager pleased with the shopping centres performance. Following are factors contributing to success of a shopping centre:-

i.

Accessibility;

According to Chan and Kwan, accessibility can be defined as a convenient transportation network with comprehensive and direct vehicular and pedestrian COPYRIGHT UiTM
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links leading to the shopping centre. The success of a shopping centre relied on how easily it is for public to visit it. Accessibility is very much dependent on the availability of mass transport such as shuttle bus, taxi and pedestrian walkways link with neighbouring developments.

ii.

Design;

Shopping centre design is usually judged by its success in building a high level of differentiation from other shopping centres. This can be exposed in terms of creating a special theme mall or by providing a one-stop shopping solution. Some shopping centres may select to have a strong focus on entertainment to differentiate themselves from others. It is a core factor in promoting a sustainable competitive advantage for the mall (Chan and Kwan, 2003).

iii.

Existence of an Anchor Tenant;

According to Christopher L. Carneghi in The Appraisal Journal Volume IL, the existence of an anchor tenant, such as a supermarket or drugstore, seems to be an important factor in the success of a shopping centre. The reason is that these anchor tenants attract repeat shoppers who then are exposed to the smaller stores inside the mall. Shoppers come to the mall to patronize the supermarket and other convenience stores such as a pharmacy or bank. At the same time that the shoppers come repeatedly to the shopping centre because convenience merchants, they also are exposed to the restaurants and speciality retailers selling shopper foods such as clothing and gifts.

iv.

Effective and Comprehensive Tenant Mix;

A balance of tenant mix is aims to taking care of shoppers' needs within the catchment area instead of maximizing rent return from trades. "One-stop shopping" is a popular term in design of trade mixes in recent years in which the tenant mix design would try to satisfy visitors' shopping need by providing a wide range of trade nature in shopping centre.

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Secondly, an effective and comprehensive tenant mix is of importance in achieving leasing success and maintaining pedestrian flow and shops' sales volume for sustainability of future development. It is because a balanced tenant mix of preferred trades and retail operations could enhance and add value to the operating environment of all shop tenants. Nowadays in order to keep a flexible and positive trade mix approach, majority of floor plans of shopping centres are adopting a flexible zoning and layout strategy to allow greater flexibility to market changes in future (Kit, 2010).

v.

Effective Management and Maintenance;

According to Malathi Thevendran, an executive director of property consultant Jones Lang Wootton, management and maintenance play a vital role in the success of a shopping centre. When centres are poorly managed, over time they deteriorate and will not be in a position to attract shoppers in the wake of newer and better quality shopping malls. Issues such as security and cleanliness are the managements responsibility and if these are not properly addressed, shoppers might not be comfortable visiting a particular shopping centre.

Anthony Chua of KGV-Lambert Smith Hampton adds, well-managed and maintained malls give a perception of cleanliness and safety to shoppers. These are vital consideration as shopping increasingly being viewed as a leisure activity.

vi.

Experienced Tenants and High-Quality Merchandise;

Managers sometime are forced to accept inexperienced operators in an attempt to fill vacant space. Inexperienced tenants and poor-quality merchandise are key factors in many shopping centre failures. Therefore, a shopping centre needs stronger tenants to improve its performance. The selection of tenants are important, however it is only possible to be choosy if the demand to rent premises inside the mall is high (Carneghi, 1981).

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