Secondary Shopping Centre Performance
Tuesday 2 February 2010
The poor financial performance of secondary shopping centres, by now, is self-evident. Falls of 44% on average tells its own story – asset managers did little to fix the roof when the sun shone. Still, as long as they’re not doing worse than their peers, they’ve always got an excuse to continue to do what they’ve always done. It is however a question of time before their shareholders begin to question this lousy performance. Meanwhile, here at I-AM, we’re refining our work on what the new model of asset management looks like.
We predict that doing “more with less” will be the mantra for the next decade. But trying to get extra productivity out of shopping centre workers worried about the future will not be easy. Right now there is little, if any, traditional “performance management” in the shopping centre industry. The FT’s Stefan Stern says “The recession has tested some basic management skills and found them wanting”.
Employees cannot be battered into producing more: they have to be persuaded. Managers will therefore need to be able to tell a convincing story about the future. At the same time useful technology needs to be implanted into the process of management so that knowledge can be used to drive financial performance. Empowered managers, furnished with the right information at the right time, have the knowledge to act, and are happier and more confident to do so.
There’s no doubt that investment risks will remain high if the same-old model continues to be used, especially with the lease expiry bubble that looms. This can only ever produce the same-old results. So in the 21st century we will have to work harder and smarter.
In Stern’s words “That means efficiency savings and increased productivity. It is the great management challenge of the age”.
The bottom line: if you aren’t part of the solution, you’re part of the problem.
Feel free to comment.
Mike.
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