Constant improvements, no complacency the key to success

This article first appeared in City & Country, The Edge Malaysia Weekly, on November 6, 2017 - November 12, 2017.

It was the right time to build a regional mall at the right location that was not only for shopping but also dining, education and entertainment.” — Barragry

Barragry (third from left) with The Edge Media Group publisher and group CEO Ho Kay Tat, managing director and editor-in-chief Au Foong Yee and City & Country editor Rosalynn Poh

Mid Valley Megamall was the first development in the 50-acre Mid Valley City

The mall is connected to The Gardens Mall via a link bridge

More than 20% of the space in Mid Valley Megamall is allocated for F&B outlets

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Excellence in Suburban Family Mall  | Mid Valley Megamall | IGB Real Estate Investment Trust

IGB REIT Management Sdn Bhd CEO Antony Barragry took a trip down memory lane during our interview, reminiscing about the opening of Mid Valley Megamall in November 1999, which was a nerve-racking experience as well as one filled with anticipation.

He recalls that on the opening day, the mall “was still in a mess” because there were ongoing construction works and the contractors had to tidy up the mall to make it look like it was completed. Instead of going into the office, the management stayed at the mall the whole day to count the number of cars and shoppers coming in, and to find out whether the visitors were shopping or dining.

“On the opening day of Mid Valley Megamall in 1999, we stopped all construction activity. We went through the first day, and then the first week, and pretty soon, we realised that it was a good attraction and people were coming to the mall.”

The megamall, the first in Malaysia, has a net lettable area of 1.7 million sq ft. Developed by IGB Corp Bhd, it was the first development in the 50-acre Mid Valley City in Kuala Lumpur. The mall later became one of the portfolios under IGB REIT. It now has over 400 shops.

The group’s effort in developing the mall has paid off — Mid Valley Megamall is one of the winners of The Edge Malaysia Property Development Excellence Award this year. 

The history of Mid Valley City

The name “Mid Valley” was derived from the location of the development, which is in the middle of the Klang Valley. Barragry says the Klang River had previously meandered through the site, before the Department of Irrigation and Drainage conducted its channelisation works. Some Kuala Lumpur City Hall (DBKL) low-cost flats and longhouses were then built there.

According to Barragry, IGB had had its eye on the location since the 1980s. But it was only in 1991 that the developer finally signed a joint-venture agreement with DBKL to develop the tract into an integrated mixed-use development with retail, commercial, hotel and residential components.

The developer built the Putra Ria Apartment nearby to accommodate the residents from the low-cost flats and longhouses. It also constructed the Petaling Jaya-Bangsar link under the agreement.

“After the acquisition of the land, Mid Valley City (MVC) went through various planning options to unlock its value. We realised early on that the retail component would be the driving force in the development. From there on, MVC was keen to retain as many of the properties built as possible so that they would generate recurring income and fund further development,” says Barragry.

Not many people in Malaysia knew of the term “megamall” back then but as the developer was aware of the performance of these malls overseas and the shift in urban population and lifestyle, it decided to go ahead with the idea.

Increasing car ownership and infrastructure expansion also contributed to the building of Mid Valley Megamall.

“In the old days, people used to go to city squares, town centres or high streets but the advent of purpose-built malls overseas in the 1970s, 1980s and 1990s changed the perception of retail. The thinking was to do the same thing in Malaysia,” Barragry remarks.

“It was also the right time to build a regional mall at the right location that was not only for shopping but also for dining, education, entertainment and generally enjoying a day out. In Malaysia, where it is not comfortable to walk outside because of the hot weather, it is like providing patrons with an air-conditioned town centre.”

After the completion of Mid Valley Megamall, the developer has continued to develop Mid Valley City, which has a total net area of 8.4 million sq ft with 33% of the area taken up by retail developments, 40% by commercial offices, 16% by hotels and 11% by the residential component.

Currently being completed is the final parcel there — an office-cum-residential block called Southpoint Tower, which will be opened by the middle of next year.

Constant improvements

Barragry says in the first year, Mid Valley Megamall was so busy — especially during school holidays — that the Mid Valley City traffic jam became infamous. That was when the group began to take notice of the components in the mall that performed well and those that needed to be improved on. One that needed improvements was the management of the traffic flow in the car park, especially providing a smoother way for vehicles to exit the mall.

“We won’t say that we are perfect but we have put in a car park guiding system to try to make it easier for visitors to look for parking bays. We have also put up more lights at the car park for safety reasons. A car park is very important for a successful mall,” Barragry adds.

To date, the group has spent RM300 million on improving accessibility to the area. Moving forward, the completion of S P Setia Bhd’s KL Eco City will also see Mid Valley City being connected to the Abdullah Hukum LRT station.

Another issue faced by the mall in its early days was the restrooms, especially the women’s. It was apparent that there was a capacity problem, which subsequently led to long queues.

Barragry explains that IGB eventually decided to double the size of the restrooms while ensuring they remained in good condition even with frequent use.

Mid Valley Megamall’s management also decided to improve the retail offerings. While the shopping component was important, it decided that the food and beverage section was equally essential. Instead of following the industry practice of 10% to 12% space for F&B outlets, it allocated some 20% of the mall’s space for this section and ensured that a wide range of offerings was available.

Barragry believes that store clustering is important for a big mall, whereby stores are grouped based on their common characteristics, so that shoppers would know where to go when looking for a particular product.

“Retail clustering is very important, especially for a big mall, because, for example, the distance from one end of Mid Valley Megamall to another is 500m.”

For Barragry, building a mall does not stop with its completion — it is a continuous job to ensure that the mall remains up to date and relevant, and constant upgrading is needed. For example, the team refurbished the third floor of Mid Valley Megamall over the last two years, virtually creating a street mall above the main mall.

“One of the best assets of our mall is that we have had nearly the same team running it since 1999 and that continuity is the unique point that allows Mid Valley Megamall to always remain contemporary and relevant,” Barragry explains.

“A great danger in an organisation is complacency because when you are complacent, you don’t have the same drive to keep going forward. This is particularly when you are in the retail sector; you must always be contemporary by providing new offerings and new tenants, and you always have to revisit your retail planning and clustering.”

Managing a huge mall that sees 3.5 million shoppers and 900,000 cars a month is not without its challenges, especially in the event of a fire and when it comes to hygiene. That’s why Barragry says it is important to react quickly when issues come up, and the mall’s staff and equipment play important roles in the event of an emergency.

Barragry believes that a mall is about building a community — formed by a triangular ecosystem that involves the landlord, tenants and shoppers — and these three groups support each other. 

“It is also the one thing we are most proud about Mid Valley Megamall as it has become an enjoyable place for families and shoppers to spend time at. 

“The mall has evolved into a place where people can not only shop but also socialise, dine and find entertainment. Through the whole of MVC, we are a small contributor to life in the Klang Valley. Of course, Mid Valley Megamall is now 18 years old and it is time for some refurbishment and improvement works.”