Enhancing Value in a Dynamic Business Environment
Asset enhancement revitalises and renovates our existing property portfolio and is based on four objectives:
1. Enhancing shopping centre performance
2. Capitalising on changing district potential
3. Creating and delivering a consistent brand image
4. Improving utilisation of internal floor area
This growth driver has traditionally concentrated on providing better environment to introduce new tenant mix, improve operational efficiency, and provide new amenities to attract tenants and shoppers. Given the right conditions, enhancement is also used to reposition, expand and raise the profile of suitable shopping centres, capitalising on factors such as growing population, evolving customer preferences and the opportunity to build synergies with other nearby properties or attractions. We have extended asset enhancement to include properties that rank beyond our top 50 properties. Based on our experience to provide better environment, tenant mix, operational efficiency and the installation of modern amenities, our asset enhancement has expanded to include fresh markets. With similar objectives of modernising and upgrading, our revitalised fresh markets have re-energised a staple of Hong Kong communities while generating strong returns. Our impact is best observed at communities having a shopping centre and fresh market within close proximity. After enhancement, the two have transitioned from being standalone to a complementary and synergistic shopping hub that creates a destination that caters to the needs of shoppers and the community of an expanded catchment.
We lay the groundwork for asset enhancement programmes by -
1. Preparation of a project strategy based on business goals and objectives
2. Assessment of marketability to support the proposed business plan
3. Development of design options, asset value creation in the context of competition, planning framework and financial viability
4. Layout optimisation, improvement of efficiencies in the context of best practice and current legislation, rationalisation of circulation, review of sustainability/energy strategy and enhancing revenue generation
5. Programme and phasing options and proposals
6. Risk assessment and mitigating strategies
To date, 44 shopping centres and 6 fresh markets that have used this strategy with enhanced properties continually outperform the rest of our portfolio. Up to 31 March 2016, our asset enhancement programmes provided satisfactory return on investment across 44 completed projects, investing HK$4,844 million since our initial public offering.
Effects on Local Communities
As we have described in the previous sections, all our properties have a potential to impact local communities, both in positive and negative ways. We try to mitigate any concerns on our asset enhancement programmes through the following measures:
1. Communications with local groups/representatives to explain the nature of the project before renovation starts and obtain their assistance in liaising with local residents
2. Follow all applicable environmental laws and regulations
3. Provide employment opportunities where possible
We believe our ongoing engagement with various stakeholders and communities in which we operate will provide feedback to us should significant issues arise.
We strengthen our relationships with both local and international stakeholders by engaging with peers, industry experts, research and academic communities, as well as non-governmental organisations (NGOs) to monitor emerging trends and assess potential related risks and opportunities; introduce best practices to improve business performance and operational efficiency. We share our experience and knowledge to build trust and credibility in the international community as well as amongst our local stakeholders, including government, industries, academia and general public to strengthen our internal capacity for addressing emerging issues.
Siu Sai Wan Market
By providing a better operating environment and a vibrant and unique retail experience, Link is creating the sustainable business proposition for tenants and creating closer ties to the local community. Siu Sai Wan Market has re-opened after completing extensive asset enhancement. To better cater to the needs of office workers, this revitalised market offers first-of-its-kind services, including the "i-Chicken" service and 24-hour fresh fruit vending machine.
In addition to traditional items such as meat, poultry, vegetables, fruits and other groceries, the property's fresh market section offers a wide variety of international food, including premium fruits, imported vegetables and Japanese and Korean food specialties. At the fish section, fresh local aquatic products alongside a wide selection of fresh and frozen seafood from around the world and dried seafood products are on offer. The section's design embodies Hong Kong's iconic fishing village tradition, offering a stark contrast with the fresh market section's modern décor. A restaurant is also available, providing on-the-spot seafood-cooking services.
Case Study Sharing:
Caring Customer Service at Temple Mall North (Previously as Lung Cheung Plaza)
Our asset enhancement programmes aim to provide a better shopping environment with more retail choices for both tenants and customers. Link seeks to prevent or at least to mitigate inconveniences caused during the renovation period of a property with caring customer service.
The first phase of the Lung Cheung Plaza asset enhancement project started in June 2014. In consideration of the nearby residents' shopping needs at Wong Tai Sin Plaza, Link introduced the Caring Customer Service programme. Customer service ambassadors delivered goods for customers from Temple Mall South (Previously as Wong Tai Sin Plaza) to Temple Mall North free of charge during designated times during the renovation period. Although the walking time only lasts for around 5-10 minutes, the service has been well received by the elderly and people with disabilities with several dozen users per day.
In addition, to cater for the needs of visually impaired residents, Link provided free guiding services to familiarise them with the new routes in place during the renovation period. Every day in the morning and evening, customer service ambassadors led visually impaired residents in need to make trips between Wong Tai Sin MTR station, Temple Mall North and the mall's entrance near Upper Wong Tai Sin Estate. After two months of implementation, they were able to memorise the new routes and were able to walk independently in the area by themselves.