The effectiveness of enlivening the shopping center by asset enhancement projects in Hong Kong

Abstract

Shopping centers are a kind of special commercial property that containing a variety of retail units with interconnecting walkways enabling visitors to easily walk from unit to unit. They play an important role of the customers’ lifestyle. They are not just only a center for shopping but also a community center for social and recreational activities can take place. They are the complex buildings including the dining, entertainment, clothing, supermarket, clinics and daily necessities. Moreover, most of the shopping centers in Hong Kong are the main pathway to homes since they occupy the first few levels of a high-rise building with interconnected by walkways or footbridges.

Buildings cannot have an infinite economic life. Refurbishment of the aged buildings can enhance their market value because it can restore and improve the building conditions physically and economically. After carrying out the asset enhancement works, the shopping centers can be improved. The physical structures, trade mix and customer services can be enhanced. It can also give beneficial returns to unitholders. The shoppers are served by more choice of shops, greater convenience and a better shopping environment. The aim of this paper is to discuss the effectiveness of enlivening the shopping center by asset enhancement projects in Hong Kong. The empirical background of shopping center and asset enhancement will be introduced first. The reasons for carrying out asset enhancement works and elements should be included in asset enhancement works are also discussed. One of the properties of the Link Real Estate Investment Trust (The Link REIT) named Choi Ming Shopping Center situated near the Tiu Keng Leng MTR Station is selected to be a case study. A survey is conducted to obtain the satisfaction level of the asset enhancement works of Choi Ming Shopping Center from the visitors. Moreover, in-depth interviews with selected ten shoppers, two tenants and two managers are also conducted to obtain the feedback of the asset enhancement works of the shopping center. The effectiveness of the shopping center by the asset enhancement projects is measured by the satisfaction levels of the visitors, shoppers, tenants and managers, including tenant mix, facilities, customer services, marketing promotions and carpark services of the shopping center. The revenue generated from the shopping center is also discussed.

The survey questions included to collect the consumption pattern, satisfaction levels towards the shopping center in terms of trade and tenant mix, facilities, customers services, marketing promotions and carpark services and the demographic characteristics of the respondents. The major findings are most of the respondents satisfied with the asset enhancement works of the shopping center and meet their needs. The overall appearance, services and image of the property can be improved.

In addition, in-depth interviews with six open-ended questions are designed to collect the feedback of the selected shoppers, tenants and managers of asset enhancement works of the shopping center. It included the physical structure, tenant mix, marketing promotion and customer services. The major findings are most of the interviewee satisfied with the asset enhancement works. The shopping environments can be rejuvenated by the implementation of the business strategies. Also, there are some drawbacks for asset enhancement works of the property. The increase of rent and fewer small local tenants would be found in the shopping center due to increase the cost of running businesses. Continuous asset enhancement projects should be carried out to generate higher patronage and investment returns to bring benefits to the shoppers, tenants and unitholders.