Article Tools
Friday night and the weekend has begun in Rio de Janeiro. Behind the antique counter of his botequim, a traditional Portuguese tavern, the bartender is hastily shoving glasses under the polished beer tap. Bossa nova music cranks up in the background, the band raising the volume to compete with the growing hubbub of an after-work crowd. The music and laughter waft outside to a colonial-era street, replete with pastel facades, elaborate wrought-iron balconies and the dewy aroma of palm trees.
It's a near-perfect vision of old Rio de Janeiro, from the period buildings to the controlled climate and evocative scents in the air. The street, Rua do Rio, is in fact a covered promenade in the centre of the Nova América shopping mall. Its award-winning allure lies in the repackaging of classic Brazilian atmosphere, perfected by Designcorp Ltd., a Toronto-based shopping-mall design company. Rua do Rio is the firm's latest involvement with Nova América, formerly a red-brick textile factory that was gutted and refurbished in 1995. It is now a 7,250-square-metre oasis of wealth and comfort in the midst of Rio de Janeiro's often inhospitable North Zone. "There were bodies there before," says Designcorp's founder Hilda Kopff of the transformed mall site. "Literally, bodies in the street."
In a neighbourhood known for drugs, crime and violent death, Rua do Rio (built in 2002) is one of few safe havens at night, making it an instant draw for the mall. Designcorp's concept was to recapture the charm of yesterday's Rio in a controlled environment. "The real shopping is where I come from--the bazaars with their smells and noises," says Iranian-born Kopff. "The shopping centre is the opposite of that. My job is to reverse that trend."
Go into any major mall in Canada and Designcorp's handiwork is everywhere. Since 1981, the firm has designed, renovated or expanded more than 200 malls, from the Halifax Shopping Centre to Vancouver's City Square. But times have changed. Once the centre of the retail universe, the giant mall is currently pushing dinosaur status in North America. Before the opening of the Vaughan Mills mega-mall north of Toronto last year, it had been nearly a decade and a half since a large Canadian shopping centre had been built. For those who design and construct the behemoths, survival has depended on a willingness to explore foreign markets, no matter how distant. "Malls weren't pleasant places to be," says Kopff. "In North America, not another grand one will be built." In 1991, after designing the Mapleview Centre in Burlington, Ont., Designcorp's work dried up for months. Looking elsewhere for opportunities, a chance encounter took Kopff and her business partner, Jeremy McMullin, to Brazil.
"Latin American [mall development] is where it was in the 1960s and 1970s in North America," says Kopff. Local entrepreneurs and small investors take on projects, while a large part of the business is still run by family-owned companies. The Canadian industry, by comparison, is in the hands of large pension funds; that's good for stability, but the funds are risk averse. McMullin says that conservatism restricts design and building ideas.
In contrast, Latin Americans are more adventuresome. Today, Designcorp has only 10% of its business in Canada, with the rest split evenly between Brazil and Colombia. Designcorp is small--just 12 employees in Canada, plus two each in Brazil and Colombia. Yet it has built 12 new malls in Brazil, one in Colombia (with seven under construction), and has undertaken countless expansions and renovations. While declining to divulge exact numbers, Kopff confides that the firm makes "incredibly good profit," but that sales will never reach more than $5 million annually because Hilda and Jeremy, as the designing duo is known, personally involve themselves in each project.
A snapshot of Brazil's shopping mall industry suggests its economic power. Today there are 257 shopping centres in South America's largest and most populous country, with 21 more under construction. Nine new malls will open in 2005 alone, as well as expansions and renovations of existing facilities. During the boom of the 1980s and mid-1990s, the sector doubled in size every five years. Developers are bold, and constantly experimenting with crossover and multi-use shopping concepts, placing office space, medical centres--even universities--in the midst of malls.
Foreign investment in the sector is growing. Canada's Brascan has been involved for more than two decades, and its latest mall project, in São Paulo, shows the flexibility of the market. A mixture of residential, commercial, retail, leisure and sculpted green space in the congested city centre, Brascan Open Mall has been a phenomenal success for the company. Space has been rented to full capacity, and rents are more than twice those for neighbouring properties. The shopping adds value to the office space, and the tenants are reliable customers to the retailers.
Meanwhile, Rio's Nacional Iguatemi has recently joined forces with Chicago's General Growth Properties, the second-largest mall developer in the United States, to acquire existing malls and build new ones in Brazil. "It's the key country in South America," says General Growth CEO John Bucksbaum. "If you are going to build a retail platform, a good place to begin would be Brazil."
Ample disposable income is one major factor. Brazil's wealth is highly concentrated at the top, especially in and around urban centres such as São Paulo and Rio de Janeiro. Of the country's 184 million people, some seven million make up a powerful upper class; 25 million comprise the upper-middle class. That is a strong purchasing group--the size of Canada's entire population--which accounts for more than 60% of visits to shopping centres in Brazil.
Another reason for the success of malls in Brazil is rampant street crime. In recent decades, violence drove well-to-do Brazilians to seek secure environments in which to live, work and play. A mall, complete with heavily armed security guards patrolling the premises, delivers that. The Brazilian Association of Shopping Centres claims that mall administrators spend roughly 30% of their budgets on security. "I visited a mall in the U.S. that was 120,000 square metres, and had 12 security guards," says Renato Rique, president of Nacional Iguatemi. "To give you an idea, a mall half that size here would have 10 times that security."
And then there's popular culture. Brazilians spend more time socializing in malls than North Americans do, hang out more at mall restaurants and food courts, and visit more frequently. In fact, shopping is encroaching on the popularity of Brazil's famous nightclubs and beaches. All this increases the need for a space that keeps shoppers happy; they want it to be safe, stylish and, frankly, sexy. When it comes to design, big colourless boxes won't suffice.
Which is why Hilda and Jeremy are shaking their heads. Sitting amid the construction of a new mall in Osasco, a middle-class suburb of São Paulo, the Canadian designers are not pleased with the handrails the local architects have proposed. Too cold, too much metal, too utilitarian, they say. It needs more glass, offers Jeremy. Perhaps stainless steel or brushed aluminum, suggests Hilda. "The important part of our job is to connect with the local team," says Kopff. "We design the project, get them to do prototypes, and then we come and refine it. They think that rail looks great, but it's chunky."
Rate this article
