When Covid hit, Malaysia’s Toppen Shopping Centre had been trading for just three months. But rather than retreat during the lockdowns – as many of the world’s retail real estate companies did – Toppen’s owner Ikano Centres invested millions into expanding it even further. Now it is set to reap the benefits of foresight. Ikano is the regional subsidiary and franchisee of Ikea, the centre’s main anchor, which opened in November 2019. A high-profile marketing campaign aimed at attracti
acting shoppers from both Malaysia’s southern states and those making the short trip across the border from Singapore immediately kicked off.
Then, just three short months later and as footfall was beginning to build into an established pattern, the country went into rolling lockdowns and movement restrictions. Toppen would be shuttered – in whole or part – for most of the ensuing two years, until the end of 2022.
Fast forward to the beginning of this year, and the message from Arnoud Bakker, commercial director of Ikano Centres, is clear: We’re back in business and back on our game.
Despite support from mall management, some of the tenants could not survive the long cold ‘winter’ of Covid and many stores were closed permanently. But this year, the centre is back to near full capacity, with an occupancy rate of 91 per cent – which compares well with an average rate of 83 per cent in Klang Valley malls in the country’s capital Kuala Lumpur. “But that doesn’t mean we are satisfied,” adds Bakker.
During – and since – Covid, the mall has expanded. Some 1600 car parks have been added in an extension topped by a 48,000sqft space housing 14 badminton courts operated by The Forum Group (in its first venture into South Malaysia), and an experiential children’s activity zone with climbing walls and physical challenges called Game On.
More obviously, on the ground floor, space that housed 150 car parks has been converted into a giant Decathlon store.
Decathlon had earlier opened a store in another of Ikano’s four Malaysian shopping centres – MyTown in Kuala Lumpur – and the trading results were beyond expectation.
“They came to us asking us if we had the space in JB. But we did not have 50,000sqft sitting untenanted,” Bakker recalls, standing outside the new store in the centre’s covered car park.
“Then we realised: We built this shopping centre to be future- proof. It was always intended when we designed the centre that – if we had to – we could convert this car park into retail space. So that is exactly what we did for Decathlon, we just did it much earlier than we anticipated because we knew we should jump at the opportunity.”
Sport, leisure and lifestyle set Toppen apart from any atypical Southeast Asian shopping centre. Toppen was always built as a weekend leisure destination for local JB residents with a heavy emphasis on dining, open-air spaces, and activity centres. Now, besides the Decathlon store, there is an indoor archery centre and the aforementioned badminton courts.
Then there is MST Golf which combines multiple indoor driving ranges, a restaurant and bar, a golfing apparel store, a golf club repair area and a private function room.
Toppen will soon open a ‘Clubhouse’ for the local football team the Johor Southern Tigers, part of a groundbreaking three- way tie-up between the club, Ikea and Toppen. The clubhouse will sell merchandise, display the team’s growing haul of regional trophies and double as a place for fans to hang out. It fronts onto a rooftop outdoor courtyard which features a video screen on which some of the team’s games will be streamed live.
“All of these things show how we are emphasising healthy lifestyles more, rather than featuring luxury brands,” explains Bakker.
The community focus is emphasised by the use of a large outdoor area adjacent to the ground floor car park and main entrance to host weekend markets, community bazaars and special promotions.
“This is the first centre to feature this concept in South Malaysia,” adds Natasha Aziz, head of brand experience & communications (shopping centres) with Ikano Centres. “In November we celebrated our fourth anniversary with a successful food bazaar. We are getting strong visitor numbersover the weekends by hosting unique food events.
“There is a synergy between Decathlon, Toppen and Ikea. They make sports accessible to the many and for Toppen and Ikea, our DNA is about products for everyday life.
“We are really focusing on creating those experiences beyond shopping. What else can customers do when they come down to us? And we want to create somewhere you can take your kids for family activities and have a meal as well.”
“Everything we are adding to the centre is focused on family and community,” adds Bakker.
“Retail follows that. We have more and more new tenants signing up (there were seven the week we visited on the eve of the Christmas holiday season) – so you arrive at this tipping point. But it needs a lot of attention, energy, great campaigns and excellent investments,” he shares.
“The car park deck alone cost 80 million Ringgit (US$16.99 million). Not a lot of companies kept on investing throughout the Covid years, but we did the groundbreaking of the car park when we were in one of the full lockdown breaks. Then we had to stop construction because we couldn’t get workers inand out, so it wasn’t easy.”
But Ikano had a vision and the management agreed that they had to keep pursuing it because eventually Covid would be over and the centre would be better placed to serve its community when life returned to normal.
Public space
While Toppen has a higher ratio of public space to leased area in the centre than Ikano’s other Malaysian malls, Bakker says there is no set ratio or target balance.
“In practice, it is more like, let’s make the walking paths a bit wider. Yes, if we can put kiosks in the middle, sure, because first of all, that’s a commercial decision, but secondly, kiosks in places like corridors create extra activity and vibrance.”
“After excluding corridors, walkways, restrooms, and other public amenities every mall needs to provide, around 20 per cent of Toppen’s floor area is public space. Bakker concedes that is high by international standards.
“It’s not that there’s a hard line there. We just see what space makes sense. Sometimes those are spaces that would not be that easily tenanted. But the team has clear instructions if they can lease space out, they will. So, there are some locations like the events space where the podium is which are occupied with events often. It’s not that we don’t get commercial returns from it – but on other days, it just becomes a nice public space.”
Aziz makes a comparison with My Town in Kuala Lumpur: “We see the public reacting very positively with our town park at My Town. During the fasting month, when they break their fast late evening or at dusk a lot of the food & beverage outlets are incredibly busy and it’s hard to get a table. So you see a lot of people buying takeaways and then eating in the park.
“At Toppen, in the rooftop area in front of the screen, during the fasting month, people would buy food and then just sit down and have a picnic.”
Aziz says during the second half of last year, Toppen was focusing on building awareness of the centre and its features – because while it has been there for four years, for nearly half that time it was all or largely out of bounds to locals, let alone Singaporeans visiting from across the border.
“We knew there were opportunities to increase the top of mind and awareness of Toppen so we focused on investing in branding including bus wraps, Grab cars, and billboards – just to drive the visibility of both Toppen and Ikea brand as a destination.
“We have Ikea which is a high-profile international brand, but many people still were not really aware of the shopping centre alongside it.”
A year on from Covid, Toppen has grown in both size and stature. And few people in South Malaysia would now be unaware of the lifestyle destination.
This story first appeared in the February 2024 issue of Inside Retail Asia magazine.