Developing the grading instrument for the super regional shopping centres in Malaysia

Abstract

In the past two decades, the shopping centres industry in Malaysia has grew significantly in term of number and types. However, so far there is no official classification and grading system was developed for shopping centres in Malaysia. The absent of official grading system may create an issue of asymmetric information in the industry.The information about the grade is also important to the policy makers and shopping centres customers.In practice, industry normally have their own grading system, which may base on one of combination of mall’s attributes. In most of the cases, one variable, which is sales per square foot has been used to measure mall’s performance hence its grade. However, this approach ignores other important variables that may significantly contribute to the mall’s quality and grade. Therefore, the objective of this paper is to develop a grading instrument that could be used to grade the shopping centres in Malaysia with special focus on large size shopping centres;with the Net LettableSize of more than one million square feet. Specifically, this paper proposed a grading instrument which is based on mall’s score on four main-attributes; anchor tenants and the quality of tenants, location, facilities and value-added services, and branding and marketing. From the four main-attributes, a total of 23 sub-attributes has been identified, and mall’s total scores on these 23 sub-attributes will be used to assign grade to the mall. There are four levels of grade was proposed; A, B, C, and D. Mall’s that achieved at least80% of the maximum total score will be assigned as Grade A, while mall with total score less than 50% will be considered as Grade D.The proposed grading instrument has been tested by conducting a pilot study on two randomly selected regional malls in Klang Valley. The findings from the pilot study indicated that the proposed instrument is capable to differentiate the grade of comparable shopping centres involved in the study. In conclusion, this paper argued that the development of grading instrument should be in-line with its purpose. Different attributes used in the grading system reflect different aspect of quality of the shopping centre. Since the instrument proposed by this paper is not based on the sales turnover, it’s not reflects the business performance of the shopping centre