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Mass transit fast-tracks centers

By Mac Keliher

The cry across Asia has been sounding: The traditional shopping mall model may not be working. Developers have opened their ears and now have a new plan, turning mass transportation centers into consumer shopping stops.

  "The success of the North American shopping center is tied with the private ownership of automobiles," said Kozue Honda, marketing director of TECH-R&DS Co., a Japanese market research firm. She added that the majority of people in Asia use public transportation to commute or travel. Honda chaired a panel on "Turning Commuters into Customers: Retailing in Mass Transportation Facilities" at the seventh ICSC/Asia-Pacific Convention, held Sept. 7 to 9 at the Grand Hyatt in Taipei.

In Singapore, for example, 62% of the population use the MRT, Singapore's Mass Rapid Transit system, daily. Locating retail outlets in mass transportation centers is emerging as a new anchor strategy for the growth of Asia's shopping centers.

Kozue Honda, left, and Liao Ching-Lung discussed the trend toward placing retail in mass-transit hubs.

Already countries such as Singapore, Japan and Hong Kong have put retailing in mass-transit stations and had much success. "Trends show that people are less willing to travel to other districts for shopping and prefer to shop within the districts they live in," said Thomas Ho, property director of Hong Kong's MTR (Mass Transit Railway) Corp., at the same panel.

Putting such observations to practice, a natural strategy is to place shopping centers in direct route with people's daily commuter movements, Ho said. MTR Corp. has moved to offer prime destination shopping centers in Hong Kong in an effort to attract the daily 2.3 million passengers of the MTR system.

Two of Ho's most successful commuter shopping centers are Maritime Square and Telford Plaza.

Maritime Square opened this past April, and Ho estimates that more than 6.5 million people have visited the center since its opening. Located on two rail lines, the center is fully integrated with the station below and has ample car parking facilities.

In Telford Plaza, MTR Corp. has created a giant 700,000-square-foot one-stop shopping center containing more than 200 individual specialty shops. Located on a major transportation hub, the center attracts more than 70,000 people a day.

Ho noted the overabundance of retail shopping space in Hong Kong, but pointed to these two centers as successful examples of a strong strategy to take advantage of consumers needs and demands today. "The most popular shopping centers are those located above transport hubs."

Singapore, like Hong Kong, is a society with strong mass-transit facilities. Currently 1.67 million commuters use the MRT system daily, a number which is expected to increase by 5% yearly. "With the tremendous amount of commuter traffic, mass-transit shopping centers have become the anchor of choice among developers," said Tay Hun Kiat, deputy managing director of Singapore-based developer PREMAS International.

Average consumer spending in malls inside MRT stations amounts to about $100 per consumer per visit, and monthly sales can exceed $2.5 million, Tay said.

Continued growth of shopping centers inside MRT stations is expected to remain high as developers move to tap this resource. Currently, Singapore supports nine shopping centers within MRT stations and, although Tay had no figures for future development, he indicated that the future for MRT station shopping center growth would hinge on a number of factors.

The main factor Tay stressed was capturing the daily commuter. This entails locating shopping centers along downtown stations and alongside commercial centers; such sites have already been targeted by developers, he said.

"Despite its convenient location and high traffic volume, the success of these shopping malls require unique strategy," Tay said.

For example, the malls should aim to offer services for commuters and users such as postal offices, laundry, Internet, photo processing, etc., he said, indicating that the mall must recognize the needs of the consumer, not just provide easy access shopping.

Furthermore, lifestyle and family orientated retailing will rise in the consumer market.

"Entertainment, education, food and beverage outlets, incorporating such buzzwords like edu-tainment, eat-tainment and shopper-tainment for the shopper who has limited time" would be important, he said.

Beauty and health retailers such as spas, and gyms and heath clubs will also rise as a large market as Singaporeans become more health-conscious, Tay said.

Taiwan lags behind Singapore and Hong Kong in both mass transit facilities and consumer development patterns. Currently, only capital city Taipei has a mass transit system, which just opened this past year. The only retailers to be found in the station are drink vendors.

However, a high-speed rail system now under construction will link the island's major cities and expects to carry 300,000 commuters daily.

The Bureau of Taiwan High Speed Rail, which is responsible for the development and construction of the project is granting more than 1,000 hectares of land for station development which will include retail and commercial space.

The project is still under construction and although profitability is hard to estimate, Liao Ching-Lung, the bureau's director general, said low land costs and 50-year development rights offer good incentives.