KEVIN TAN: ‘WHILE OTHERS ARE STILL REELING, WE’RE MOVING VERY, VERY FAST’
Apart from variable rent, Megaworld employs technology, other creative solutions to keep retail partners afloat
“We all have to be patient. It will take time.”
This is what Kevin Tan, Megaworld chief strategy officer, said at a virtual media roundtable this week, as he discussed their organization’s efforts to help tide over Megaworld Lifestyle Malls’ retail tenants through the pandemic.
Megaworld has 20 lifestyle malls nationwide.
While the company’s liquor and property businesses did relatively well during the lockdown, Tan said, retail bore the brunt, owing to the long mall closures and the public’s continued general unease to go out while the virus still rages.
Megaworld is still on a “variable rent” basis for mall tenants this year, he said, meaning, “if you do well, we get paid; you don’t do well, we don’t get paid.”
In 2020, Megaworld waived P2.5 billion in rent, but Tan said they’ve been very flexible as a landlord knowing it’s not just rent that poses a challenge to tenants. “Everything else also comes into play. Salaries, electricity, even food costs,” he said.
86 percent
Though some remain in hibernation, especially those in restricted categories, 86 percent of Megaworld mall tenants have reopened, Tan said. Some areas are doing better than others, he added.
Megaworld’s Township concept of “live, work, play”— where their properties are designed to integrate residential, office and leisure facilities— has worked to their advantage during the quarantine, Tan said.
“For security reasons, we were built so that we can actually isolate, or we can control access . . . All essentials are within . . . Thankfully we are happy to report that there were no major outbreaks whatsoever in our Townships.”
Megaworld has employed centralized contact tracing and other contactless measures in all its malls.
As retail started to pick up toward the holidays in 2020, several tenants opened their biggest outlets in Megaworld malls: Wildflour Café + Bakery in Uptown Bonifacio; Mary Grace in Newport Mall, Pasay City; and McDonald’s in Capital Town Pampanga.
In response to the demand for outdoor dining spaces, which have been deemed safer from virus transmission, Megaworld is refurbishing its alfresco dining areas in time for Valentine’s, and throughout the summer season.
“We are known for alfresco dining, for nightlife, and we’re reimagining the concept and recreating the entire patio dining experience, to create a new ambience to excite our customers.” The goal is to make outdoor dining as comfortable as being indoors, he said.
Last year, they also had to be creative with their other marketing activities. The annual pet blessing at Eastwood City was done drive-through style. They also launched the first float-in cinema at their Venice Grand Canal Mall “to leverage our existing features.”
Five months ago, Agile Digital Ventures, the company’s digital investment arm, created Pick.A.Roo, a delivery app to help its retail partners deliver essential goods to customers. It has since grown to include 500 brands, delivering everything from food and groceries to baby care within Metro Manila. The service will soon expand to provincial cities.
While the pandemic brought new waves of new customers and users to online shopping, Tan doesn’t see online services such as Pick.A.Roo replacing brickand-mortar stores. They just offer another option for customers.
Restaurants and supermarkets
For one, he said, delivery can’t replicate the
restaurant dining experience. Some might like the convenience of having their groceries delivered, but others actually still enjoy the trip to the supermarket.
“I don’t think that’s going to be one or the other,” he said, adding they will continue to explore other digital and technological innovations to aid the recovery of retail.
He also acknowledged that there was some spike in sales for properties out of town and lots last year, with the affluent buying holiday homes and making it their primary home. But he believes it’s a short-term trend. Sales of condominiums in their Townships continue to do well, he said.
“Fifty percent of our Townships are now outside Metro Manila, which is also a great advantage for us.”
Even before the lockdowns, he noted that Megaworld and Alliance Group deployed up to P4.1 billion of their resources to help not just their communities, but also the government and poor areas, in response to the crisis.
“We converted our alcohol plant to make disinfectant, and built testing centers,” Tan said. They also provided lodging for partners’ employees as well as transportation when public transport was out. They donated 10,000 meals to front-liners via an “Eat Out and Help Out” initiative.
“Running multiple platforms and businesses is not easy,” Tan said. “It takes a lot of time, it takes a lot of effort and it costs a lot of money. And while others are still reeling from this pandemic, our group is moving very, very fast.”