According to the Wall Street Journal, the newest trend for shopping centers is to include more “fun”, but what exactly does that mean? Well, shopping malls are trying to attract more customers, as they are facing tough competition from online shopping platforms. The way many malls are achieving this is through adding new and exciting entertainment aspects to their malls including high-tech golf driving ranges, skydiving simulators, escape rooms, go-kart racing tracks and laser-tag.
One of the malls on the forefront of including new entertainment to attract customers is Destiny Mall, located in Syracuse, New York. I actually have quite a bit of family in Syracuse, New York, so I have personally experienced a few of these new attractions for myself. I raced in the go-karts as well as well as the Canyon Climb, both of which were a lot of fun!
Marc Strang, corporate marketing director at Pyramid Management Group, which owns and operates 15 malls, including Destiny in Syracuse, says “guests stay here for over six hours.” Attracting more guests and having them stay longer is a fantastic revenue boost. They also are spending more when they come to the mall. Destiny offers day passes ranging from $38 to $48 to access a number of different attractions including laser tag, climbing adventures, glow-in-the-dark miniature golf and an outlet of the Build-A-Bear company.
According to CoStar Group Inc., food and entertainment currently account for 22.1% of the leased space in shopping malls, compared to the 19.2% in 2012. So it’s obvious that the amount of spaced being leased by food and entertainment within malls is increasing. It’s obvious that the amount of time being spent by customers, as well as the number of customers is increasing. It’s also obvious that revenue is increasing, but by how much? This figure is going to change from mall to mall, but there is data from one report that can be indicative of a larger trend. EPR Properties, a real-estate investment trust that is based out of Kansas City focuses on building state-of-the-art movie theaters and golf entertainment complexes near or inside shopping centers. EPR reported “revenue of $236.8 million in the first half of 2016, compared with the $200.7 million in the same period of 2015.” The company’s shares have hit a record high this year of approximately $85 a share, rising 39.5%, compared to 11.7% for the broader equity REIT index. If the rest of the companies involved with entertainment near or within shopping centers are increasing their revenues and increasing share values close to as much as EPR has, then this could be an enormous trend in commercial retail real-estate and development as well as the entertainment industries.