On recent trips to Nanjing and Xi’an, I was pleasantly surprised at the high quality of new domestically-developed shopping centres. Wonder City, the West market, and Deji Plaza Phase 2 all seemed to be getting the “ingredients” right for success. These projects were built by relative upstarts – new retail developers without any previous track record or existing retail portfolio – with the exception of Deji Plaza Phase 1. High quality tenants, tasteful interiors, clean circulation, and full ownership by the developer, were just some of the things that were planned well in spite of their recent entry to the industry.

It wasn’t long ago that high-quality domestically developed shopping centres were the exclusive domain of big national players like Wanda and COFCO. They have taken a decade to perfect their version of what a mass market mall should look like and how it should operate. They understand how and why shopping malls are not the same thing as department stores or street-side shops. They have centralised operations with deep retailer and distributor relationships. In the past few years, their formula for success has been replicated reliably in new centres across the country. Former staff from players like Wanda, as well as foreign mall operators have facilitated the spread of the shopping mall concept far and wide across the country.

But most importantly, the new upstarts are leapfrogging their predecessors by not repeating the same mistakes. Instead they are looking at the benefits of holding the asset for the long term and making the commitment required to nurture their shopping malls to maturity. Previously, new retail developers almost always followed the fastest path to returns, equating retail with residential: a simple churn formula – build and sell – involving basic shell construction, and strata titling to whomever would buy, with no management of tenant mix or adjacencies. These properties usually went into a tailspin of unsightly decay and even dereliction within a few years.

Wonder City couldn’t be more different. Sales density figures were respectable for its length of operation, in spite of what seemed to be a complete dependency on shoppers who drive to the centre. Warmly coloured interiors, a rich selection of national and international brands, column free store fronts, good attention to detail, and more importantly, clean restrooms, made the mall a pleasure to walk around in and browse. Even the handrails were sturdy and served more than a decorative purpose. And this is exactly what the creator of the shopping mall concept, Victor Gruen, intended – a place where customers would want to extend their visit and consume more.

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