Insider Monkey

16 Most Profitable Malls in the World

Afifa Mushtaque
11 min read

In This Article:

This article will look at the 16 most profitable malls in the world. It will also cover the latest trends observed in the world of shopping malls while highlighting the changes the pandemic has brought to the functioning of malls today. If you want to skip our detailed analysis, you can head straight to the 5 Most Profitable Malls in the World.

During the height of the pandemic in April 2020, mall visits dropped by a staggering 91%. This decline was even more significant than the impact of the Great Recession. However, shopping malls started experiencing a resurgence in 2021, particularly in major cities, as people sought opportunities to venture out after months of restrictions.

According to a study by INRIX, there was still demand for in-person retail experiences, and retailers are optimistic about the future. The recent surge in mall visits may have been driven by factors such as "revenge spending" and pent-up demand, indicating that people were not completely avoiding physical retail experiences.

However, the rise of e-commerce and online shopping posed challenges to brick-and-mortar retailers and malls even before the pandemic. Online platforms like Amazon.com Inc (NASDAQ:AMZN) gained popularity, diverting consumer spending away from traditional retailers. Shopping malls faced closures and declining foot traffic amid the pandemic like never before.

Despite the struggle, in 2022, there was a notably high resurgence in mall visits driven by people seeking a sense of normalcy after the pandemic. Yet, this is unlikely to be a long-term trend as online shopping offers convenience and competitive pricing. Traditional retailers and malls will face ongoing challenges in the coming years.

Interestingly, how profitable it is to own a shopping mall can be closely tied to the ongoing debate about the death or revival of malls in today's age. This profitability hinges on three crucial factors: the property's purchase price, management efficiency, and the shopping mall's distinctive features. When these elements align as intended, investors can expect an annual return from 5% to 20%.

2023 Trends to Observe

Shopping malls are evolving into lifestyle centers offering shopping and entertainment, catering to post-pandemic consumers seeking retail experiences and leisure activities. Outlet malls are rebranding as destination shopping centers to attract digitally native brands and provide a comprehensive customer experience.

The Superette in Boston Seaport, launched recently, is one such example that offers a unique concept inspired by European-style settings. The center features a charming tree-lined courtyard where visitors can find a mix of digitally-native brands, such as Lunya and Framebridge, and local cafes, bars, and restaurants. The design aims to capture the attention of people passing by, encouraging them to explore the boutiques and retailers while going about their daily activities, whether working out or getting a manicure. By creating an inviting atmosphere, The Superette aimed to merge leisure and shopping seamlessly, providing a vibrant space where people can engage with various experiences and discover new brands.

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