Shopping malls are more interesting than they first appear. They are not just collections of shops. They are systems. A successful mall has to balance space, tenant type, customer demand, and the surrounding market.
This research makes that point in a very structured way — by treating a mall like an ecosystem and the tenants inside it like species within that ecosystem. That may sound unusual at first, but the logic is surprisingly practical.
The basic idea
The authors argue that tenant mix in a mall is not random. It depends on the mall's physical size and the purchasing power of the surrounding area. Using evidence from 129 major shopping malls in the UK and 18 shopping malls in Hong Kong, the studies show that:
- Tenant mix is positively associated with mall size
- Tenant mix is also linked to local purchasing power
- Shop area allocation often follows a geometric distribution
- When the mix moves too far from equilibrium, rental income falls
This is a useful reminder that retail performance is not just about filling empty units. It is about designing the right structure.
Why the geometric pattern matters
One of the most interesting findings is that shop area allocation often follows a geometric distribution. In practice, that means the mall usually has a few large anchor tenants and many smaller shops arranged in a predictable size pattern. The distribution is not arbitrary — it reflects the underlying economics of the space.
If the balance is wrong, the mall can lose efficiency. Too much variety without enough supporting space or demand can reduce performance rather than improve it. That is the part most useful from an investment and asset-management point of view.
Tenant mix should be strategic, not intuitive. Instead of simply asking which brands look attractive, mall managers should ask: How big is the mall? What is the income potential of the catchment area? How much space should go to anchors? What mix will support the highest long-term rental income? This replaces guesswork with a model that reflects the actual constraints of the asset.
Five factors that drive mall performance
The UK study identifies five contributing factors to retail rents:
- Tenant mix equilibrium — the right balance of retail categories for the asset and its market
- Building quality — physical condition and design of the mall itself
- Locational convenience — accessibility and transport links
- Leasing strategy — how actively and strategically tenants are selected
- Anchorage — the role of large anchor tenants in drawing footfall
These five factors together form a shopping mall marketing and management framework that can be used as a practical tool for asset managers and investors.
Who should pay attention
| Audience | What this means for you |
|---|---|
| Retail investors | Tenant mix is a measurable performance driver — use it as a due diligence factor, not just a qualitative impression |
| Mall managers | Move from intuitive leasing to model-based tenant selection — the five-factor framework gives you clear benchmarks |
| Leasing teams | Match tenant diversity to mall size and catchment purchasing power — overshoot or undershoot costs rental income |
| Retail strategists | The ecological analogy offers a new lens: malls have carrying capacities, and exceeding them reduces efficiency |
The bigger picture
This research shows how commercial real estate often works like a living system. Whether talking about ESG, retail, office space, or mixed-use developments, performance usually depends on balance. Too much of one thing can weaken the whole structure.
A mall is not successful because it has more tenants. It is successful because it has the right tenants in the right proportions for the asset and the market. That is a much more useful way to think about retail property.
When leasing is treated as a scientific problem rather than a purely intuitive one, you get clearer benchmarks and better outcomes. For shopping malls, that means tenant mix should be planned with size, demand, and equilibrium in mind — not just brand visibility alone.
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Sherry Xu's research and books cover the intersection of investment strategy, sustainability, and real estate markets.