Global Cases
Working with tenants and customers to enhance the value of facilities
―Retail facility business―
Japan
From formulating development concepts to operating facilities
Sumitomo Corporation's real estate business is divided into five segments, including the office building and condominium business. Of these, the retail facility business handles shopping center projects and other ventures nationwide. The key feature of this business is the one-stop service for shopping center development , starting with the formulation of development concepts, followed by site acquisition, facility construction, tenant leasing and facility operation. They are all handled together with Sumisho Urban Development, our group company. We have developed and operated various retail facilities, primarily in Tokyo and the Kansai region but also in Sendai, Fukuoka and elsewhere.
The retail facilities we develop largely follow two main business models. The first is for "community-based retail facilities," in which facilities are developed and operated according to the characteristics of the areas where they are located. The underlying concept of this model is to create for visitors a "third place" that is neither home nor workplace, taking into account local demographics, people's lifestyles and consumption trends.
Leading examples of this model are "Terrace Mall Shonan" (Fujisawa, Kanagawa Prefecture; opened in November 2011) and "Terrace Mall Matsudo" (Matsudo, Chiba Prefecture; opened in October 2019). We operate these facilities as places where people of all age groups can enjoy not only shopping and dining but also simply spending time. Other facilities developed and operated in ways tailored to local characteristics include "SELVA" and "SELVA Terrace" (Sendai, Miyagi Prefecture), "Grand Emio TOKOROZAWA" (Tokorozawa, Saitama Prefecture), "mewe HASHIMOTO" (Sagamihara, Kanagawa Prefecture) and "Mikage Classe" (Kobe, Hyogo Prefecture).
The other model is "urban retail facilities." We construct facilities in prime locations in bustling city centers nationwide to create useful spaces for tourists from Japan and abroad. One of the best-known of these is "GINZA SIX" (Chuo Ward, Tokyo), opened in April 2017 as the largest retail facility in Ginza at that time. With more than 240 tenants including well-known brands, the complex offers a multipurpose hall, offices and even a Noh theater in addition to retail shops, and it has been used by many customers both from Japan and overseas since its opening. We plan to add more retail facilities based on this model in Tokyo, Osaka and other locations.
Finding tenants appreciated by local residents
Sumitomo Corporation puts its integrated corporate strength to good use in various aspects of its retail facility business. Sumisho Urban Development plays a key role in the day-to-day operation. In many instances, Sumitomo Corporation Group retail chain stores -- Tomod's drugstores and Summit supermarkets – are tenants in these facilities. Group companies that handle construction materials also make significant contributions by procuring such materials for these facilities.
A retail facility's value depends greatly on its lineup of tenants. Attracting stores that are needed and appreciated by local residents is a key responsibility of the facility operator. Sumitomo Corporation and Sumisho Urban Development have built a network of more than 2,000 retail companies in the course of managing retail facilities. We believe that the most important aspect is to increase the attractiveness of the facility by having the most suitable tenants in accordance with the characteristics of the area and the facility.
Striving to provide experiences only available at real facilities
Even today, new facilities are being planned in various locations. In this business, however, the number of facilities is not necessarily an indicator of success. We continually aim to operate facilities in a down-to-earth manner, constructing them in locations convenient for local residents and improving their value over the long term through day-to-day communication with tenants and customers.
In an age of ever-increasing opportunities to shop online, retail facilities must provide customers with the kinds of tangible experiences that only brick-and-mortar facilities can offer. Our mission is to create facilities where visitors feel genuinely happy to spend time, can share memorable experiences with family and friends, and can literally get their hands on the items they want or new items they have never seen before. That said, we will nevertheless also be taking advantage of the cutting-edge technologies of artificial intelligence (AI) and virtual reality (VR) to offer visitors novel experiences.
Smart cities, where electricity comes from renewable sources and people get around in electric vehicles, are finally set to become a reality. Sumitomo Corporation believes that appealing retail facilities can perform pivotal roles in smart cities. We will thus work together with our group partners and with a wider range of external business partners to undertake the development and operation of highly regarded retail facilities.
April 2023
Keyword
- Japan
- Real Estate
- Retail Service Operations
- Diverse Urban Development Group
