Mall Management

Paper 580/2.6.2
Thesis & Case study
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Kawinder jit Sakshi Sharma
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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 third
party 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 trajectory
The 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 the
same platform which is better known as progressive partnership.
Therefore, success of both retailers and mall operators are dependent
on each others 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 the
growth 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 Organization
Center
Ownership
Outside
Certified Public Acc.
Marketing
Consultant
Center
Manager
Leasing
Director
Security
Director
Maintenance
Director
Financial
Manager
Marketing
Manager
Accounting
Manager
Maintenance
Manager
Security
Manager
Reports to
Owners
Advertising
and Promotion
Accounts
Payable
Maintenance
Personnel
Security
Personnel
Lease
Administration
Display
Manager
Accounts
Receivable
Contractor
Oversight
Retailer
Coordination
Tenant
Sales Analysis
Administrative
Assistant
FACTORS FOR SUCCESSFUL
SHOPPING 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 co- ordination
Designing & Development of
Shopping Mall
Design Consideration
Designing for Shoppers experience
Shoppers Behavior and Buying habits
Visual Impact
Design consideration for physically challenged
people
New trends in shopping mall design like Media
Architecture etc.
SHOPPING MALL DESIGN
Requirements
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 services
Parking
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 DLFs 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 Its
Placement 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 in
the mall. Generally, there are two types of consumers
visiting malls focused and impulse buyers. The
time spent by focused buyers in malls is relatively
lower compared with impulse buyers who also enjoy
window shopping.
Promotions and Marketing
Promotional activities and events in a mall form an
integral part of mall management. Activities like
food festivals, handicraft exhibitions and celebrity
visits increase foot traffic and in turn sales volumes.
Organising cultural events has time and again
proved vital in attracting consumers to a mall. Such
activities may also act as a differentiator for a mall.
Developers can work on drafting marketing strategies
for individual malls to meet the needs of the local
consumer base and the challenges of local, and in
some 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 includes
infrastructure, 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 with
100% power backup
HVAC with adequate redundancy
Emergency lighting in all areas
Fire-fighting and detection
system
Dedicated security system
Toilets separate for customers and
staff
Building and floor directories detection
system
Dedicated security system
Water softening and purification
Signage directing customers towards
elevators, 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 centres 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 caf 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 goods
In 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 lessors 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 tenants 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 propertys 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
Lease Terms and Measurement Concepts cont:
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).
Lease Terms and Measurement Concepts cont:
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 tenants 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.).
Lease Terms and Measurement Concepts cont:
Usable area Also known as office area or usable
square feet. The secured area occupied exclusively by
a tenant within a tenants 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 buildings 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.
Termination
Most leases cannot be terminated before the end of
the lease by design. Terminations are possible
if 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 Lessees 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 apparent
liquidity and enhancing return on investment.
Lease vs. Buy
The 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, its 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, cafs 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 by
entertainment consumption. The emotions
of pleasure and arousal identified in the
environmental 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 Legacy
EPMS, One of the constituent
companies of E-City Ventures (An
ESSEL GROUP Enterprise)
1. EPMS
2. 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
Customer
Is the
Superstar
Integrity
People
First
Innovation
EPMS Post
Operation Services
Accounting&
billing
Parking
management
Wastage
management
Faade
cleaning
Security
management
House
keeping
BMS
O
&
M
Occupant
management
Marketing
management
EPMS
services
EPMS - Property Management Services
Technical Operation &
Maintenance
1. Power generation&
distribution
2. Periodic Energy Audit
3. HVAC Systems
4. AMC Coordination
5. Fire Fighting systems
6. Inventory Management

Occupant
Management
1. Billing &Collection
2. Periodic Feedback
3. Attending Grievances
4. Helpdesk
5. Co-ordination
EPMS - Property Management Services
Housekeeping
1. Scheduled Cleaning of
Areas
2. Floor Polishing
3. Debris Removal
4. Mechanized Cleaning
5. Replenishment Public
Amenities
External Cleaning
1. Faade Cleanings
2. Floor Polishing
3. Water Tank Cleaning
4. External Glass
Cleaning
5. Mechanical
6. Road Sweeping
EPMS - Property Management Services
Waste
Management
1. Waste Collection
2. Storage
3. Removal
4. Sorting
Security
Management
1. In-Out moment
Records
2. Day\Night Security
Watch
3. Control Systems
4. CCTV Monitoring
5. Managing Public &
Private Area
EPMS - Property Management Services
Parking
Management
1. Daily Inflows
2. Managing Park
Vehicles
3. Daily Reports
4. Collection Of Park
Charges

Marketing
1. Space-Signage's
2. Event Marketing-
Celebritys
Endorsements
3. Enhancing Footfalls
Customer Feedback
EPMS One Window
for All Services
EPMS 6 Ps Mantras
1. PRICING - Competitive
2. PLACE - PAN India
3. PEOPLE - Experienced
4. PROCESS - 6 Sigma
5. PROMOTION - Enhance
Footfalls
6. PASSION - Clients & Customers
Oriented
EPMS
Value Addition Model
Customers Retailers
Developers
EPMS
Value
model
EPMS Value Addition Model
Developers
Generate Income
Price Appreciation
of Malls
High Retailers
Retention
Regular Income
Retailers
More Clients
Increase in
Income
Better Relations
Better Services
Customers
More Range of
Products
Good Ambience
in Malls
Regular Visits of
mall
EPMS Contract Model
EPMS
Cost to Cost
Fixed (Actual) Variable (Actual)
Operations Manpower Cost
Management Fee
Electricity/ DG /Telephone
Consumables & Equipments
R&M
Administrative
Our Business To better yours
Business
EPMS The Client
Property Services
Value to
The Client
Value to the client -
Cost Reduction thru
Energy Savings
Reimbursable & Actual
Group Synergies
Passion for Client
Management Support
Cost Saving Analysis
SQI & CRP Analysis
Response Time
Mapped as per client.
Process Driven
Operations
Preventive
Maintenance
Checklist for every
process
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 cleaning
tasks
Washroom
Services
Security
Services
Internal
Guard
and Security
Entry Exit
Point
Security
CC TV
In/Out
Material
Movement
Parking
Management
Support Services
Reception
Internal
Services/Logistics
Space
management
Event &
Marketing
Management
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 President
Operations
Manager
Accounts
Manager
Operations
Client
Manager
Technical
Marketing
Manager
Security
Manager
Housekeeping
Manager
EPMS Support Formats
Quality Assurance Reports (QAR)
Occupant Satisfaction Reports (OSR)
Daily Reports & Monthly Reports (MIS)
Monthly Audits Reports (MAR)
Site specific operating manuals (SOPs)
Data Recording
Key Performance Indicators (KPIs)