Constructing a shopping complex takes a lot of planning. Many people will be involved in the project, including the entrepreneur, businessman or company, architect, engineers, contractors, and service companies. We look at what is involved and what it costs.
Cost Of Constructing A Shopping Center
You are looking at paying an average of $75 million for a two-story shopping center on a 250,000 square feet plot with three anchor stores. A shopping center designed for a community or neighborhood serves customers within a 1.5-mile radius, has up to 20 stores, and is built on a plot between 30,000 to 100,000 square feet. This is vastly different from the malls that attract customers from the whole city and even international visitors. However, both fall under the general term of shopping center. A super regional mall will cost between $400 million to $500 million per square foot to construct and a total financial outlay of up to $250 million. It will have a minimum of 75 shops plus restaurants as well.
Broken Down Costs Of Different Services, Equipment, And Materials In Construction
Equipment requirements will account for eight percent of construction costs and materials will take up 40%. An architect’s services will amount to 14% of the total cost. Builders’ fees are around 14%. Outfitting and finishing costs amount to about 38%. These figures may vary in practice. Outfitting and finishing include numerous aspects such as roofing, ceilings, flooring, indoor and outdoor signage, HVAC, lighting, and displays and fixtures. Costing for these categories can be harder, as the variations on each item are subject to fluctuations.
Painters will charge an average of $50 per hour, while electricians cost roughly $80 per hour. Excavators and masons charge around $70 per hour, and carpenters about $80 per hour. Plumbers’ costs are an average of $102.50 per hour. Finally, structural engineers charge around $300 per hour. These are mid-point costs and the ranges between the top and bottom amounts differ significantly. For example, one range may be $60m to $80 per hour with the top service company charging more than the lowest contractor. Another range will be $40m to $100 per hour. Both will have a mid-point of $70 per hour.
Demolition has to be taken into account if buildings remain on the plot where you want to create the shopping center. This will cost you an average of $6 per square foot. One determining factor in the actual cost you will pay is the type of materials you need to get rid of.
You will also need to pay for various permits, and these are determined by the location of the city where construction takes place. Interest on bank loans or other financing is another cost that must not be overlooked.
It is impossible for most businessmen to start a shopping center without investors to provide the capital for construction. Fortunately, there are companies that vet potential investors and assist aspiring entrepreneurs with obtaining funds. Many businesses will look for projects to invest in that will bring them a monthly rental income, while the capital value of the property will appreciate until the investor opts out and takes his gains.
Larger companies who make a living out of developing commercial property generally have access to resources of funding through their banks and are able to use existing assets as collateral. However, they may also sell completed projects to investors.
When determining how much space to allocate to parking, this is not based on the anticipated visitors in a day but on the principle that every 15,000 square feet of retail space require one acre for parking. This is not set in stone. Parking garages use less space than outdoor parking areas. However, they are more expensive to construct so the number of parking garages is normally minimal.
Concrete is the most sustainable material for building a parking lot. Concrete formulations differ for parking lots based on if they are on a single level or multistorey. It is important that they must sustain the weight of vehicles that will use them. Look for a contractor like K&E Flatwork parking lot paving.
Another important aspect of designing a parking bay is to ensure that vehicles and pedestrians walk or drive in the same direction.
The Purpose Of A Shopping Center
There are many individual reasons for designing and constructing a shopping center. Apart from the obvious one, to make money, owners must focus on what will attract people to their site. Every shopping center needs a Unique Selling Preposition (USP). This differentiates it from other shopping centers and attracts a different segment of customers.
For many of the bigger malls, customers don’t come mainly for the shopping. They come for the experience and activities, to meet up with friends, and to relax. These centers must cater to a wide range of eating preferences with multiple restaurants. They must have movie houses, spas, and other entertainment options. A great example of this is the Dubai Mall. It has 120 restaurants and many other eating places. For fun and relaxation, visitors can go to the Hysteria Haunted House, Rainforest Café, and an Aquarium and Underwater Zoo. Its skating rink is the size of an Olympic rink. Finally, it has over 1200 shops.
A second example is the Berjaya Times Square mall in Kuala Lumpur. It has almost as many shops as the Dubai Mall and half the number of eateries. But its main attraction is Cosmo’s World, which is the biggest theme park in Asia. This feature takes up four floors of what is the 5th largest building globally. In addition to its theme park, it contains an IMAX 2D and 3D theatre, the very first one to be built in Malaysia.
Constructing a shopping center is an expensive project but well worth the effort for the income it generates. The key to a successful center is doing something unique to attract visitors. This foot traffic will lead to money being spent on entertainment, food, and shopping.