MAPIC Bounces Back as Mixed Use, Entertainment Trends Accelerate – WWD

CANNES, France – Bricks-and-mortars are back as retailers try to reconnect with consumers after two years of shutdowns and restrictions.

This was one of the main points of the event MAPIC retail real estate conference, back to the full program for this year’s edition.

Pre-pandemic “normalcy” may not be returning anytime soon in the face of ongoing global economic and political challenges, but retailers and mall developers are responding to new consumer patterns and an increasingly competitive environment with new amenities, entertainment, entertainment and services. presents. adopt omni-channel integration.

The conference opened under the theme “People, Planet and Profit” and the participants sought to offer a positive vision of the future of retail, not only encompassing all things environmentally friendly, but also focusing on sustainability to keep retail centers vibrant and vibrant. able to survive in the long term.

The two floors of the Festival Palace were once again filled with space for leisure and food concepts. Organizers named 5,000 participants from 75 countries, down from 2019’s high of 8,500, but showing the industry’s resilience. The show features 1,600 exhibitors and brands are returning, but this year many guests were either invited or paid a steep discount by new organizers RX France to secure attendance.

Countries in the Middle East and Asia have shown their growing retail ambitions with some of the biggest on-site stores. Saudi Arabia’s Diriya Square made its biggest announcement this week: It will host a 1,650-seat restaurant, event, exhibition and performance space in partnership with Time Out Market, which it plans to open in 2025 in its luxury village.

Consumers have changed the way they shop, but the future of retail centers remains vibrant and optimistic. Developers have doubled down as they search for new ways to appeal to busy consumers, while accelerating the growth of new concepts for entertainment venues and activities that were in play before the pandemic.

“Hundreds of malls around the world are struggling to establish their identity,” said Thomas Cartledge, CEO of consultancy Benoy. “We are tired [food and beverage], we finished our free time. What’s next? Is it art or culture?”

The next evolution of entertainment at the American Dream Mall, which includes DreamWorks Water Park, Legoland and Nickelodeon Universe theme parks in East Rutherford, New Jersey, is a massive esports arena.

The new venue is 40,000 square meters over 2.5 floors and will host events with up to 2,000 spectators each month. This space will include not only esports stars, but also musicians and professional athletes, as well as those who make money in-game through Twitch and other streaming services. The space will include a social media room where influencers can stream and create content.

It’s about American Dream’s partnership with Mr. Beast, where thousands of fans lined up to catch a glimpse of the YouTube star when he appeared there in September, even camping overnight. The activations are part of an American Dream effort to shore up several defaulted projects that have struggled to attract buyers after the pandemic.

As part of the €17.5 million expansion of its center in Seville, Spain, Via Outlets has created a Pink-Talk room for visitors to take photos and film content, and added an art installation to its social network. Property in Lisbon, Portugal, center near Davos, Switzerland. “It’s the ‘wow factor’ that adds something that guests don’t want,” said CEO Otto Ambagtsheer. “It’s part of the landscaping to create something that people will remember.”

Other developers have been cited as adding social services, such as a city library or health center. “It’s an amenity to be downtown, a retail center that can be consolidated to become a more long-term, sustainable place,” Cartledge said. “Some of the loss-leaders might think it’s worth it for a landlord to put it out there and lose money to generate traffic.”

“Shopping malls are becoming like the Roman Forum,” said Peter Wilhelm, chairman of the European Council of Shopping Malls. “We’re going back to the origins of retail, when people went to the market not just to shop, but because it was a place to meet people.” He noted that during the pandemic, many malls have turned into vaccination centers, reinforcing their central role as community centers.

New amenities are key to post-pandemic footfall, and so far, they’ve been elusive. Despite a slight increase from 2021, traffic numbers across the continent are still down about 10 percent from 2019, with Germany, France and the Nordics particularly down by more than 20 percent, according to a study by Procos-Eurelia, the European trade association.

Despite the decline, internal numbers show higher in-person spending, which helped stem ongoing online and brick-and-mortar disputes, several tenants said. According to Prokos, online sales are still higher than in 2019, but they are making deals. Brands, especially luxury and premium labels, have realized that online sales costs such as shipping, logistics and returns are eroding their profits.

“We have seen an inflection point,” said Patrick Delcole, head of European retail at BNP Paribas Real Estate. “We have basically declining online digital channels. It’s not against the other – it doesn’t matter to the customers. It’s true that physical stores are important to support digital channels.”

Rising interest rates and running out of free money are putting pressure on online retailers to show revenue, not just market share, he added.

Digital-native and direct-to-consumer brands, particularly in the beauty industry, are looking to open or experiment with brick-and-mortar physical stores. Online returns are good for outlet malls that are getting rid of excess inventory, and those spaces are expanding as inflation hits households and consumers become more cost-conscious.

“This year has been one of our highest turnover years for new leases and we’ve expanded brands that are doing very well,” said MacArthur Glen, managing director of leasing at Nick Brady, which works with brands such as Armani and Gucci. Karl Lagerfeld and Nike. “We talk a lot about making big big. We’ve done a lot with our luxury brands. They are looking to introduce new physical and digital concepts to their retail channels.”

As luxury and discounters expand, many executives predict a wave of consolidation between mid-tier centers in the U.S. and Europe. With property losing up to 70% of its value as investors revalue assets, the UK is particularly ripe for buying.

However, the market is still throwing money at mid-sized centers, said Delcol of BNP Paribas. “A lot of investors are waiting for a bit of clarity and interest rates to stabilize before they come back into the market,” he said.

Cost-conscious consumers and expectations that the world is headed for recession may be shopping. This could lead to a desire to consolidate the mall market, with a few big players focusing on redevelopment and snapping up older, smaller malls.

“I think you’re going to see a lot more involvement in the Asian market and buying some of these malls because they’re going to bring in some of the Asian retailers and maybe bring them back to life. Haven’t seen it in a while,” said Benoy’s Cartledge.

The market’s outward optimism masked a cautious undercurrent as developers assessed a combination of geopolitical headwinds and the economy, and Europe’s energy crisis was a hot topic of discussion. One tenant said their energy bills had risen 600 percent in the past year, forcing investment and expansion plans to be put on hold.

Ambagtsheer of Via Outlets says it has developed solar projects in Spain, Portugal and Norway to create its own energy supply, thereby offering tenants a way to cut costs.

The need to rein in energy costs is driving a leap in sustainable planning from developers to brands, who are under pressure from all sides.

“We consider stability as the main issue [in financing]”said Giles Membry, CEO of Rioja Estates.”[Investor funds] It’s coming to you saying, ‘We won’t see anything if it doesn’t meet our specific criteria in terms of sustainability and ESG testing.'” To work with high-end and luxury brands, it’s important to engineer a premium feel to the space. action.

“We see more and more regulations related to ESG standards and we need to implement them. But brands want a lot of information and clarity from us about what they’re doing to save energy and what materials they’re using,” said Annette Lund, CEO of Promenaden Management, which works with Balenciaga and Valentino. a Dior door this summer. “It seems to be coming from both directions.”

“Brands don’t want to be associated with development without a strong sustainability agenda. If your company’s strategy doesn’t align with the company’s strategy, there’s a risk that some brands won’t occupy the space,” said Alex Avery, CEO of commercial strategy firm Pragma.

From a brand’s perspective, as consumption patterns change, consistency is key to attracting customers. “The pandemic, the environmental crisis, and now the economy is accelerating the demand for more responsible consumption patterns. It’s clear that demand is there from our customers,” said Alexandra von der Gruen, vice president of retail expansion at adidas.

Von der Gruen remains positive, though one brand representative said “difficult conversations need to be had.” “We have approached all the big landlords and I can tell you, the doors are open everywhere. But I think both sides are currently being established [standards] phase. It will accelerate next year, but there’s a lot of speed on both sides.”

Ingka Centres, which operates 49 centers mainly in Europe, China and India, launched a 700 square meter circular concept space in Sweden in June and hopes to expand to other locations soon.

“Consumers say they want to live more sustainably, but sometimes they don’t know how to do it,” said Vasco Santos, director of global sales and leasing at Ingka Centers. “So they want to inspire companies, and it’s our responsibility to lead the way.”

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