The optimum refurbishment time of shopping centres

Abstract

The optimum time in the life cycle of a shopping centre when refurbishment must be undertaken was investigated, based upon the analysis of three shopping centres in Durban, South Africa, which were older than thirty years and where refurbishment had not taken place for at least twelve years. To determine the impact of age on the centres' performance, data was gathered from shoppers, tenants and the landlords. The results indicate that the life cycle stage, rather than physical age, plays a dominant role in determining the requirement to refurbish. Respondents prefer shorter periods (seven to ten years) between revamps to ensure that the shopping centre remains attractive to tenants and shoppers and rewarding in terms of financial returns to investors. The findings further indicated that the timing for refurbishment is moderated by internal factors such as management competency, investor strategy and feasibility of the refurbishment project as well as by external factors such as competition, market, social and technological environment. It has also been established that refurbishment must meet certain expected financial returns in order for it to be undertaken. This paper demonstrates the importance of understanding the stage of the shopping centre in the product life cycle and ensuring that refurbishment is undertaken when it is due before loss of competitiveness and financial returns occur.