Online shopping threat to malls

As growing numbers of shoppers go online, European mall owners are trying to pull in customers by including services that can't be replicated on the Web, such as hospital care and government services.

Malls must become more like full-service community centres to survive in the face of a growing list of failed retailers, property experts at the annual MIPIM trade fair in Cannes, France, said.

The experts expect big gains in warehousing as more goods are sent and returned by post.

"The days of the stand-alone mall are numbered," said David Roberts, chief executive of architect Aedas, one of the five biggest practices in the world.

"In 20 years' time you will find stores that sell books and DVDs replaced by sites that give people a reason to go to the mall to visit art galleries and education centres, and to get health and spa treatments."

Florencio Beccar, fund manager of CBRE Global Investors European shopping centre fund, cited the recent purchase of a mall in Germany, saying the fact it included a large medical centre was "a big plus".

"I saw a clinic in a Brazilian mall at which you check in and are buzzed when they are ready. In the meantime, you go shopping," he said. "With the ageing population in Europe you can see that happening more and more."

CBRE Investors, which has about à14-billion of retail property under management in Europe, and 5000 tenants, owns a mall in southern Sweden that includes a library and a local municipality office, he said.

"More shopping-centre developers will have early talks with these sorts of tenants as well as with the big anchor retailers," Beccar said.

Big mall landlords have increased the number of restaurants and cinemas at their properties to persuade shoppers to stay longer. They offer promotions to reward frequent shoppers who can be tracked by cellphone.

But these steps do not go far enough, some experts say, in light of a forecast last month that 90% of retail sales growth in Britain, France and Germany between 2012 and 2016, worth à91.5-billion, is expected to be online, according to the property arm of French insurer AXA, which manages à43-billion in assets.

As well as changing what is inside a mall, mall owners will need to borrow ideas from developing markets such as Dubai and China, where shopping centres are part of wider mixed-use developments in which people live, or include open spaces where they can spend leisure time, Roberts said.