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Anchor tenants to shopping centres go beyond simply setting aside a substantial area for the purpose and determining the rent, it is also important to assess the ability of the anchor to contribute and enhance the revenue of the shopping centre, and equally important to recognize and reconcile its impact on the image of the shopping centre, its positioning and compatibility with other tenants, thereby achieving the original objective of leveraging on the anchor’s ability to attract shopper traffic and hence improve the performance of the shopping centre.
The traditional purpose of anchors in shopping centres had hinged upon their ability to attract shopper traffic that would generate a spillover effect to benefit the other retailers in the shopping centre, hence the predominance of research into achieving the spillover shopper traffic. However, a more effective gauge would be to assess if the spillover shopper traffic results in purchases beyond the anchor. For the purpose of this study, the concept of “externality”, a term borrowed from economics, shall be introduced to expound the effects of anchors on leasing, finance, social and other factors. Studies on the financial impact of anchors on shopping centres shall be referred to as the “Commercial Externality”.
The effectiveness and different stages of the anchor’s “commercial externality” can best be separated into 3 stages starting with the manner in which it attracts shopper traffic (anchor shop pulling power), the distribution of shopper traffic to other parts of the shopping centre and finally purchasing pattern of shoppers. It stands to reason then that a strong anchor would be highly beneficial to a shopping centre with a complementing tenant mix meeting the needs of the shopping public. Conversely, an anchor would do little for the shopping centre if the latter does not possess the right mix of tenants nor meet the needs of shoppers.
From the shopping centre perspective, if the anchor does provide a strong rental income stream and possesses a strong and positive “commercial externality” influence, it can be reasonably assumed that the shopping centre would do well from its rental revenue. In reality, however, anchors often do not offer a satisfactory rental income. Even if the anchor delivers through its “Commercial externality” factors, it is often insignificant given the low rents, nor do these factors attract enough shopper traffic befitting the positioning that the shopping centre had set for itself. If the problem is compounded by shops failing to complement each other and, worse still, not meeting the needs of shoppers, the relationship between the anchor and the shopping centre would be predictable.
TaiMall’s novel “A-Zone 動力站”, located at it basement covering an area of 5,617 ping (including the gymnasium) and offering a wide range of sports related and leisure facilities, meets the conceptual definition of an anchor. The substantial area devoted to this use resulted in the low yield and at first look seemed obvious that the result would not be satisfactory. If such a facility maximizes its potential, perhaps it would justify its existence and appropriate to expand on the theme. However, as there is no readily available basis to gauge such a relationship, it is the purpose of this study to explore with similarly themed shopping centres, perhaps “ACE歡影城” (shopping area of about 4,800 ping), to make “commercial externality” comparisons. It is hoped that through the comparative study, the positive or negative impact of “commercial externality” of “A-Zone 動力站” may be assessed and hence rationalize its continued existence.
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