BEYOND A GOOD LOCATION
by Lim Lay Ying
Property Times, New Straits Times
25th June 2004

Kudos to Suria KLCC for being crowned as the best of the best of retail developments in the world. The Fiabci Prix d’Excellence 2004 Retail Category Award conferred by Fiabci, the Paris-based International Real Estate Federation, on Suria KLCC is not the first official endorsement of the shopping centre’s winning qualities.

In 1999, it won the Fiabci Award of Distinction in Retail Development for the Malaysian Chapter. To the Malaysian public, it has won their hearts as one of the hot spots in the city for shopping and entertainment and is a “must-visit” in the tourists’ itinerary.

Suria KLCC attracted a record 42 million visitors last year! This figure translates to an average 150,000 during weekends and 100,000 on weekdays. Its combined retail turnover from the 138 retailers amounted to a whopping RM1.23 billion, leading the centre’s management to confidently target for a RM1.4 billion for this financial year (ending March 31, 2005).

On the back of such healthy sales collections, tenants in Suria KLCC have no qualms paying the steep rents. Monthly rents for prime retail space in the mall are as much as RM35 per square foot currently – about 30 per cent to 50 per cent more than the choice space in the established Bukit Bintang shopping district.

Lot 10, which commands the highest rates, rents at about RM27 per square foot for prime space at the ground level while Sungai Wang Plaza’s and Bukit Bintang Plaza’s rates are as much as RM23 and RM24 per square foot respectively. In the outskirts of the city, newer and increasingly popular shopping malls such as Mid Valley Megamall are calling rents up to RM30 per square foot a month.

Shoppers Gravitating Towards Suria KLCC

Despite “steeper-than-others” rents and indications from the centre’s management that rates will be hiked up further, retailers are queuing up for space. The turnover of tenants however is quite rare, unless pressured to do so because of under-performance. For financial year ending March 31, 2004 Suria KLCC grossed annual rents in excess of some RM100 million!

While many would conveniently pass off Suria KLCC’s success story as one which is location-driven, it must be remembered that prior to its ground opening in 1998, the spotlight for shopping in the city was fixed on the long-established Bukit Bintang area. Shopping centres along Jalan Ampang such as Ampang Park and Yow Chuan Plaza had all along stayed on the sidelines.

Since its debut, Suria KLCC made headlines in Kuala Lumpur’s shopping scene and expanded shopping options for the general public. Locals and tourists quickly gravitated towards it and its novelty never wore off. Credit must surely be given to the master planner of the project who cleverly executed the development strategy to ensure that “all roads lead to KLCC”. This astute move has successfully enhanced the centre’s accessibility.

That was not all. The developer, Kuala Lumpur City Centre Holdings Sdn Bhd (KLCCH), understood that at the end of the day, the success of the shopping centre will be determined by the quality and mix of the tenants in the centre – that shoppers are attracted to a centre for its stores, and a good location and/or architecture will not guarantee large visitor turnout.

Market Analyses Helped in Strategising

Thus, before the centre’s designers put pencil to paper, market trends were studied to understand shifts in demographic make-up, identify underserved demographic segments, customer shopping patterns and preferences, and establish the size and shape of the trade area. These analyses helped define the tenant strategy and identify the right tenant to attract and the array of spaces to provide in order to best serve the prospective markets.

Contributing further to the success of Suria KLCC is its spatial component which has been meticulously laid out to facilitate the movement of the shoppers – both physically and mentally. The mall’s crescent or convex shape and oversized atrium allow maximum unobstructed space within a 360-degree radius from a central point. Minimal indentations of storefronts and convulations in the vertical space design and sparse columns throughout the public areas, ensured that many stores are in the shopper’s line of vision.

The shopper didn’t have to “work-hard” to find the stores right from the point of entry – the inviting entrance gives him or her a broad view of many storefronts. From the streets through the building entrances to the leased retail space, the centre’s layout is like a seamless web which makes orientation and movement seem effortless. Its shopper-friendly design which effectively maximized natural lighting through the use of skylights, has been able to achieve overall harmony in style and at the same time, permit reasonable variations among tenants to give them identity.

Today, the six-level mall which overlooks the magnificent KLCC park, is successfully capturing increased purchasing power that is accruing with the growing population, number of households, employment, and income. It is fulfilling an unmet need in the market area and attracting customers from existing businesses within and even beyond the trade area.