Hong Kong shopping centres are increasingly losing their local charm as small-business tenants are being forced out by hefty rent increases and replaced by multinational brands.
While it is easy to paint the landlords as the bad guys in the demise of local stores, the retail property business is taking these issues very seriously. As such, candidates wishing to work in retail property management need to have a much broader view of "sustainability" than just barrier-free access and energy efficiency.
According to The Link Sustainability Report 2012, rising rents and the impact they have on smaller tenants are key stakeholder concerns. "We have 90 wet markets in Hong Kong," says The Link CEO George Hongchoy. "If they are not run in a sustainable manner, business will die as the older generation retires."
Addressing claims that landlords are forcing the demise of the local business, Hongchoy says this is not the full story. A genuinely sustainable mall or shopping centre business will also want its tenants to be economically successful.
"Rent on its own is a small fraction of the cost. If people don't know how to run their businesses, even if we don't charge them any rent, they still have increasingly high input and labour costs and they won't be able to survive. For a tenant to have a sustainable business, it must have a good business model," he says.
This is why The Link now runs a Tenant Academy that helps tenants run their businesses in a more economically sustainable manner. It also organises marketing events to increase foot traffic in the vicinity of smaller businesses.
Professor Judy Tsui, vice-president (international and executive education) at PolyU and co-creator of the university's new Executive Diploma Program in Shopping Mall Management with The Link, says there is no "sustainability" module in the diploma as sustainability is entrenched across the whole programme.
"In shopping mall management now, when they calculate the costs, overheads, how they do property real estate valuations, the return on equity … when they talk about all this, they must look at sustainability," she says.
"Shopping mall managers should not just look at creating financial value for The Link or any other property-development company in the future, but how to really create social and environmental value," Tsui adds.
Hongchoy believes that this is why the diploma is so important for staff. "I hope that with more knowledge from the diploma programme, our staff will be able to execute the sustainability model even better," he says.
