Ninety-four percent of malls tracked are getting makeovers through common area improvements, rebranding and tenant upgrades.
NORTH AMERICA–Mall owners have invested more than $8 billion in renovations over the last three years in an effort to entice consumers beyond traditional retail purchases, according to professional services firm JLL.
The findings are part of JLL’s latest report, A New Mall Rises, which explores 90 super regional and regional malls that are currently undergoing or have undergone significant renovations during the three-year period.
According to the report, 41 percent of malls added food and beverage options in the last three years. Of those, 55 percent also added entertainment offerings.
Meanwhile, there has been a significant number of malls downsizing their retail space on purpose. For example, 43 percent of malls have added non-retail uses including multi-family, office, hotels, call centers, schools, distribution centers and/or medical facilities. An additional 20 percent of malls are also adding dedicated spaces for the community including open green spaces and kid-friendly play areas.
Furthermore, 22 percent of malls are de-malling the space or demolishing it for the highest and best use in the community.
“Malls must respond to changing shopper preferences with laser focus and evolve their purpose through redevelopments to be relevant,” says John Lambert, director of retail development, JLL. “Many of the 90 properties we looked at are elevating their role beyond purely shopping and becoming destinations for dining out and entertainment, community activities and even lodging and residential.”
Overall, 94 percent of malls are getting a makeover through common area improvements, rebranding and/or tenant upgrades.
“As a general rule of thumb, mall owners who place an impactful amount of capital into a renovation hope to see an 8-10 percent increase in sales. But, minor renovations that simply attempt to keep properties current and afloat aren’t likely to drive a noticeable change in the bottom line,” says Larry Jensen, director of business development, national retail property management, JLL. “Before an owner begins a renovation, they need to consider the value of the property and the cost of the redevelopment, as well as their anticipated return. But, they also need to consider the alternative. What’s the cost of not renovating as shoppers become bored and move on to other venues?”