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Competition, agglomeration, and tenant composition in shopping malls

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  • David Leung
  • Peng Liu
  • Tingyu Zhou

Abstract

Previous models of tenant composition in shopping malls have focused on traditional anchor and nonanchor retailers who sell similar merchandise. With the changing preferences of modern shoppers who seek unique and entertaining experiences, this article introduces a new type of store known as “specialty stores” that offer experiential consumption. Using a dynamic game model that considers the trade‐off between the benefits of agglomeration and the costs of competition, we re‐examine the tenant optimization problem faced by mall owners in the current retail environment. Our findings show that specialty stores have a significant impact on the optimal tenant mix and the rent revenue of developers. This article provides valuable insights into the optimal tenant composition for large‐scale shopping centers that cater to contemporary consumers.

Suggested Citation

  • David Leung & Peng Liu & Tingyu Zhou, 2024. "Competition, agglomeration, and tenant composition in shopping malls," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 52(2), pages 552-576, March.
    • Handle: RePEc:bla:reesec:v:52:y:2024:i:2:p:552-576
    DOI: 10.1111/1540-6229.12442
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