Explaining the variations in the pedestrian flow values of shopping centres

Abstract

Previous studies suggest that pedestrian flow in shopping centers is one of the key determinants of shopping centre rent. Much emphasis in shopping center management has focused on strategies to increase pedestrian flow. However, increase in pedestrian flow may be different impact on rental value in different shopping centres. Furthermore, pedestrian flow cannot be increased without costs and that such costs often increase at an increasing rate as pedestrian flow increases. The financial benefit (increase in rental value) due to increase in pedestrian flow is not the same for different shopping centres. Therefore, it may not always be beneficial to spend resources on increasing pedestrian flow. To determine an optimal strategy for managing pedestrian flow in a shopping center, it is necessary to understand the factors that affect the value of pedestrian flow to the owners of the shopping malls which is coined in this research as Pedestrian Flow Value (PFV) which is measured by net rental income per floor area per pedestrian flow. This study identifies the key determinants of PFV based on literature review, interviews and theoretical deduction. Based on rental and pedestrian flow survey data of 146 shopping malls along the stations of one of the most important mass transportation system in Hong Kong, i.e the Mass Transit Railway (MTR), we have estimated the marginal effects of these determinants on PFV. These determinants explain almost 90% of variations in PFV across shopping centres along the MTR line. We found that shopping malls owned by the same owners tend to achieve a lower PFV, which suggests that owners of multiple shopping malls may tend to adopt a uniform pedestrian flow management strategy that may not be optimal for each individual mall.