Reasons for the loss of economic efficiency and methods of increasing shopping centers profitability

REASONS FOR THE LOSS OF ECONOMIC EFFICIENCY AND METHODS OF INCREASING SHOPPING CENTERS' PROFITABILITY SUMMARY At present, shopping centers' stock has reached a high level with the acceleration of shopping center development in Turkey after improvements in America and Europe. Although some shopping centers operate successfully, others lose their economic efficiency because of some reasons such as design, location and competition. These shopping centers are transformed into other different functions according to the market conditions and regional dynamics or hold on as unproductive estates. Within the scope of the thesis, in Istanbul sample, the main factors causing the shopping centers to lose their economic efficiency and become unproductive estates, the strategies and methods that are effective in ensuring economic sustainability of operational centers and reusage of the centers that lost their retail functions in different ways are investigated. According to the results of the analysis, the main reasons for the loss of economic efficiency of the shopping malls in the Istanbul sample are design and brand mix faults and competition, which occured in the first stage of the development process, and the centers started to operate as inefficient real estates. When we look at the operation periods of shopping centers that have lost economic efficiency, almost half of the total stock(48%) have closed in the first 5 years of their operation. In addition to these, it is observed that the majority of centers lost economic efficiency are developed by non-professional firms. It has been analyzed that the centers that lost economic efficiency concentrated in three basic sub-regions in Istanbul, Beylikdüzü-Esenyurt, Şişli - Beşiktaş - Sarıyer aksı ve Bayrampaşa – Bahçelievler. These subregions, when assessed within themselves, show similarities in terms of economic efficiency loss reasons. It is also important to ensure the sustainability of centers based on the changing trends and consumer habits, as well as the importance of success of shopping centers in the development and opening stages. The most fundamental factor in the sustainability of economic efficiency is increasing the number of visitors and all strategies must be determined according to this. The increase in the number of visitors can be achieved by analyzing the population of the shopping center's catchment area very well and determining the strategies for customer profile and preferences. In centers operated with low efficiency, it is possible to increase the number of visitors and indirectly their productivity by some revisions which take place based on the present consumer needs. In present, food and beverage, experience and entertainment focused solutions, integration with technological developments and architectural design are important dynamics in customer preference. Nowadays, the integration of online shopping and physical retailing and omni-channel developments are crucial and it is expected that shopping centers will become more experience-focused areas if physical retailing is to adapt to the new system. When it is not possible to improve by keeping the retail function, it is considered that the value of operations can be increased by the transformation to other functions in line with market dynamics and regional needs. Many shopping malls which have lost economic efficiency have been transformed to many functions such as office, hospital, educational facility, hotel in America and after this transformation, it has been seen that these estates have become more functional and productive areas. In Istanbul, there are examples of transforming to different functions such as offices, educational facilities and hospitals, but there is no professional large-scale transformation example in this regard. However, when shopping malls are considered to be located in strong transport links and central locations, they are thought to be transformed into more productive areas.