This past week I did a lot of traveling. I was in Goiania, Manaus, Curitiba, and Caxias do Sul visiting the different malls and gaining a cultural perspective on the different areas. Goiania was very interesting because the C Class consumer (middle class) makes up 50% of the population. The mall management in this area focused on creating a safe atmosphere for families to come and experience the mall. It is interesting to think about this idea relative to malls in the United States. I don’t think about going to a shopping center and not feeling safe. For the emerging middle class the mall provides a place that a family can enjoy, and at the same time, they do not have to worry about their well being. Also, many shoppers come to malls to get out of the heat. Mall air-conditioning brings in a consumer that may not spend a lot, but they get a chance to see the mall and recognize some of the products and services they provide.
Shopping Amazonas (Manaus, Brazil) was a very interesting experience. The mall management team is focused on improving the infrastructure of the mall. Because of new competitors in the area, Shopping Amazonas is adjusting to these changes. Their plan is to build a new parking structure and create a more modern look inside and out.
Curitiba and Caxias do Sul were two places I visited in the south of Brazil. These regions were culturally different than others I have visited in Brazil. The infrastructure was very European looking and the population looked to be mostly of European decent. In Caxias do Sul, most of the population was Italian. I had the opportunity to eat at an Italian restaurant in Shopping Caxias do Sul and the food was great.
I flew back into Rio de Janeiro today to sum up my project. I have a lot of information that I need to put together. I hope to talk to Tenda, an entry level homebuilder, to get to some more information on the housing market in Brazil. Also, I will be putting together a presentation for the directors at BR Malls to show them what I have learned from my experience here.
Wednesday, June 23, 2010
Monday, June 14, 2010
Week 5
This past week I left Sao Paulo and went to Belo Horizonte to see the Malls and Greenfield projects in the area. In Sao Paulo I went to shopping Villa Lobos, Granja Vianna (Greenfield project), shopping Tambore, and Campinas Shopping. The most interesting place, for me was the Greenfield project in Granja Vianna. The site is projected to be completed in early October and as of now everything is on schedule to meet the deadlines. Granja Vianna was interesting to see because I learned more about the development process. The project started in 2007 with basic plans and purchasing of the property. Construction of the mall started at the beginning of this year and has been moving extremely fast. When I was there, the construction team was working very hard to stay on schedule. The construction manager explained that finishing the mall required that the team work on the building everyday until the deadline.
The most interesting part of the building, for me, was the lifestyle construction on the top floor. Looking at the plans, there is an open area on the top floor that will create scenic view of the surrounding area. This area is a perfect area for family entertainment and restaurants. BR Malls is adding high quality restaurants and a movie theatre. The layout of the mall will serve as a providing a very nice experience for the surrounding population.
Shopping Estacao HB is a greenfield project located outside the city of Belo Horizonte. This site has not yet started construction; however, I was able to see the layout and get a feel for what the advantages are for choosing to construct a Greenfield like this one. The mall will be built over a train station and a bus station. The growth of Belo Horizonte toward this area is increasing dramatically. This train station allows for a commute from the downtown area of BH to the outskirts of the city. A new building was built near the Greenfield that local government will be working in. Because the government is looking to move away from the downtown area and closer to this Greenfield, BR Malls is confident that this is a great indicator that the population will continue its trend and move in this direction.
The major problem concerning Shopping Estacao HB is to maintain a safe and accessible environment for those who are using the train and bus stations during construction. Although this is a concern, BR Malls is confident that the appropriate steps will be taken to make sure this occurs. Also, because the World Cup will be hosted in Brazil in 2014, massive infrastructure projects will be taking place. It is crucial for the government and BR Malls to work together to make sure the new infrastructure in this area makes the mall accessible. Coordinating the mall plans and new infrastructure is crucial for the ingress and egress of the center to flow.
Shopping Del Rey is a mall that is positioned well for future growth. Del Rey was the first mall I visited that had abundant parking that can be utilized for other activities or future expansion. This mall, for me, is the definition of family entertainment. Creating an atmosphere of cheap family fun, Del Rey focuses on creating events that that bring in the local population. One example is a comedy show they put on every Thursday. This idea struck me as one of the most innovative and progressive ideas in all the malls I visited. Thursday night was considered a slow night at Del Rey, so they decided to have a two hour comedy show at the food court free of charge. The comedians work in radio and were looking to gain exposure so they charged a very cheap price for a 3 month contract. Not only did it bring more people into the mall to see the show, other people stayed longer and decided to spend more. One example is a group of girls that were going to grab a coffee after work, and instead, decided to buy dinner and watch the show. Fast food sales increased 30% compared to average Thursday night sales. Also, the comedians used themes that marketing decided could help the mall. Last week, the comedians focused on Valentine’s Day, which is in June in Brazil. They not only entertained, but the comedians also reminded the shopper that Valentine’s Day was coming soon and they needed to buy gifts.
I think the biggest weakness of this mall is that there are no sit down restaurants. In order to truly make the Del Rey experience complete, I would add some relatively cheap sit down restaurants that would allow shoppers to stay longer and spend more.
So far my experience here has been great. I have learned some of the basics of the language and I am starting to feel more comfortable communicating. Brazilians seem to be very understanding of the language barrier and appreciate when I make an effort to speak in Portuguese.
The most interesting part of the building, for me, was the lifestyle construction on the top floor. Looking at the plans, there is an open area on the top floor that will create scenic view of the surrounding area. This area is a perfect area for family entertainment and restaurants. BR Malls is adding high quality restaurants and a movie theatre. The layout of the mall will serve as a providing a very nice experience for the surrounding population.
Shopping Estacao HB is a greenfield project located outside the city of Belo Horizonte. This site has not yet started construction; however, I was able to see the layout and get a feel for what the advantages are for choosing to construct a Greenfield like this one. The mall will be built over a train station and a bus station. The growth of Belo Horizonte toward this area is increasing dramatically. This train station allows for a commute from the downtown area of BH to the outskirts of the city. A new building was built near the Greenfield that local government will be working in. Because the government is looking to move away from the downtown area and closer to this Greenfield, BR Malls is confident that this is a great indicator that the population will continue its trend and move in this direction.
The major problem concerning Shopping Estacao HB is to maintain a safe and accessible environment for those who are using the train and bus stations during construction. Although this is a concern, BR Malls is confident that the appropriate steps will be taken to make sure this occurs. Also, because the World Cup will be hosted in Brazil in 2014, massive infrastructure projects will be taking place. It is crucial for the government and BR Malls to work together to make sure the new infrastructure in this area makes the mall accessible. Coordinating the mall plans and new infrastructure is crucial for the ingress and egress of the center to flow.
Shopping Del Rey is a mall that is positioned well for future growth. Del Rey was the first mall I visited that had abundant parking that can be utilized for other activities or future expansion. This mall, for me, is the definition of family entertainment. Creating an atmosphere of cheap family fun, Del Rey focuses on creating events that that bring in the local population. One example is a comedy show they put on every Thursday. This idea struck me as one of the most innovative and progressive ideas in all the malls I visited. Thursday night was considered a slow night at Del Rey, so they decided to have a two hour comedy show at the food court free of charge. The comedians work in radio and were looking to gain exposure so they charged a very cheap price for a 3 month contract. Not only did it bring more people into the mall to see the show, other people stayed longer and decided to spend more. One example is a group of girls that were going to grab a coffee after work, and instead, decided to buy dinner and watch the show. Fast food sales increased 30% compared to average Thursday night sales. Also, the comedians used themes that marketing decided could help the mall. Last week, the comedians focused on Valentine’s Day, which is in June in Brazil. They not only entertained, but the comedians also reminded the shopper that Valentine’s Day was coming soon and they needed to buy gifts.
I think the biggest weakness of this mall is that there are no sit down restaurants. In order to truly make the Del Rey experience complete, I would add some relatively cheap sit down restaurants that would allow shoppers to stay longer and spend more.
So far my experience here has been great. I have learned some of the basics of the language and I am starting to feel more comfortable communicating. Brazilians seem to be very understanding of the language barrier and appreciate when I make an effort to speak in Portuguese.
Sunday, June 6, 2010
Week 4 Sao Paulo
This week was a great week because I visited two different companies and talked with them about a different aspect of the real estate market, housing. I learned much regarding the credit system and Brazil’s movement toward making housing more affordable. I learned of a major program created by the Lula administration called Minha Casa Minha Vida (My House My Life). This program is intended to provide subsidies and tax breaks for those families who make up to 10 times the minimum wage. This creates a great opportunity for homebuilder and those families looking to buy a home. I talked with two major companies, Gafisa and Itau Bank, to get an idea as to what this project entails. Itau Bank gave me great insight into future projections of the real estate market. Working with both companies gave me great insight into the housing market. My previous internship focused on the smaller shopping centers. This was a great opportunity to learn about residential real estate market.
I also had the opportunity to work at Shopping Metro Santa Cruz Mall. The mall is exactly the type of mall I wanted to study while I was down here. This mall focuses on the B and C class incomes and works to create a safe a memorable experience for its clients. The mall location is perfect because it is located above a subway station and is adjacent to a bus station. This mall is 100% owned by BR Malls and is has the 3rd largest NOI/m2 (indicator of profitability for the mall). This reveals that focusing on the emerging middle class can lead to a very profitable business. In my report I plan on making comparisons from all the malls I visit with a special focus on malls like this one.
Aside from work, I have been enjoying Sao Paulo. Today I was able to take a tour of the city and learn about the history and development of Sao Paulo. I was able to visit the business center on Paulista Av. and see the Bovespa exchange. The most interesting experience, for me, was seeing the Central Church. When I walked in I could feel the history. The choir was singing and the room was filled with people. I also saw different income areas of Sao Paulo. I was able to visit the wealthiest parts of the region and also drive past some of the Favelas. It was very interesting to see the difference between the two areas. The upscale areas were in gated communities that were comparable to nicest houses in the United States. The favela areas were poorly kept and the infrastructure looked old. The favelas did not look like were in good enough shape to provide satisfactory living conditions. I hope to further analyze how the government is working to make better housing establishments for these people.
I also had the opportunity to work at Shopping Metro Santa Cruz Mall. The mall is exactly the type of mall I wanted to study while I was down here. This mall focuses on the B and C class incomes and works to create a safe a memorable experience for its clients. The mall location is perfect because it is located above a subway station and is adjacent to a bus station. This mall is 100% owned by BR Malls and is has the 3rd largest NOI/m2 (indicator of profitability for the mall). This reveals that focusing on the emerging middle class can lead to a very profitable business. In my report I plan on making comparisons from all the malls I visit with a special focus on malls like this one.
Aside from work, I have been enjoying Sao Paulo. Today I was able to take a tour of the city and learn about the history and development of Sao Paulo. I was able to visit the business center on Paulista Av. and see the Bovespa exchange. The most interesting experience, for me, was seeing the Central Church. When I walked in I could feel the history. The choir was singing and the room was filled with people. I also saw different income areas of Sao Paulo. I was able to visit the wealthiest parts of the region and also drive past some of the Favelas. It was very interesting to see the difference between the two areas. The upscale areas were in gated communities that were comparable to nicest houses in the United States. The favela areas were poorly kept and the infrastructure looked old. The favelas did not look like were in good enough shape to provide satisfactory living conditions. I hope to further analyze how the government is working to make better housing establishments for these people.
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