Lessons Learned, Lessons Shared 2018-04-10T19:05:09+00:00
INTERVIEW WITH JIM DELISLE

AUGUST 2006

PART I : BACKGROUND

1.1 Tell us about your current position and your responsibilities. Who do you work for and how does retail fit into their business strategy?

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• I started the company Urban Studies 16 years ago, mainly to conduct urban market research, focusing on feasibility studies for property development and shopping centre surveys.

• 1990 was a very difficult period in the history of South Africa with political uncertainty and Nelson Mandela’s release after 27 years in jail. Apart from the political uncertainty nobody was sure what the outcome, future economic growth and the future of the country would be.

• Looking back it was good timing to establish Urban Studies because since then a political settlement has been reached and the first democratic elections took place in 1994.

• Currently the country has a GDP growth of almost 5% and this positive growth has been running for more than 100 months consecutively. This positive political and economic growth has had a very positive impact on property development and the property market research industry.

• Urban Studies is a small family research company with 8 full time employees and more than 40 fieldworkers in different teams throughout South Africa. The Head Office team forms part of the “family” with strong commitment and dedication. Over the years the mission of Urban Studies has been to conduct objective, reliable and innovative market research and to offer quality service to our customers. More than 2 000 market research surveys have been completed throughout Southern Africa as well as in the Middle East. The research mainly consisted of two broad components namely desk surveys where existing information is collected and analysed, and primary market research where questionnaires are completed. Most of these surveys are intercept studies at shopping centres. There is also emphasis on household surveys, mainly to distinguish between users and non-users of a particular shopping centre.

• All fieldwork is conducted by a black empowered company called Pulane Fieldwork & Data Consultants. Black economic empowerment is currently a major component of transformation taking place in South Africa. This company is run by my wife Irma and a black partner with a 50/50 profit sharing partnership with Urban Studies.

• A large portion of the 2000 research projects is retail/shopping centre related. This mainly includes feasibility studies for new shopping centres, intercept studies where primary research has been conducted at more than 170 shopping centres throughout South Africa, and feasibility and site selection studies for retailers. The retail industry in South Africa is very well established with more than 13 million m² shopping centre space and more than 1 000 centres, ranging in size from small convenience centres to a number of large super regional centres. The quality of shopping centres in South Africa compares very favourably with the best I have seen in the United States. There are a number of world class centres which have won awards in the ICSC design competition.

1.2 We understand that you are the Deputy Vice President of the SACSC. What is the SACSC and what is its mission? How does it relate to ICSC? How did you become involved and what role do you play?

• The SASCC is closely affiliated with the ICSC and regular contact takes place between us and the executive members of the ICSC. The SACSC is the mouthpiece of the shopping industry in South Africa. The council recently established its first full time office and has appointed a general manager to run the council’s activities. This already has a major impact on the industry as far as awareness, publicity and participation in government bodies are concerned.

• The rest of the focus is to run three annual shopping centre management and marketing courses. Another very important annual event is the all African Shopping Centre Congress where up to 1 000 delegates are expected this year.

• My own involvement in the council started more than 10 years ago as part of the Educational Committee. The first courses were compiled and have been running since 1993. Three different courses have been developed over the years namely the CSCM (Certificate for Shopping Centre Management), the ASCL (Advanced Shopping Centre Leadership) and the Fundamentals in Shopping Centre Marketing (FSCM). Other involvement in the council included the organising of local shopping centre tours, to play an initial role in establishing the IPD Retail Index and to introduce and initiate the South African Footprint Awards (similar to the Maxi Awards). The main aim with the Footprint Award is to prepare South African entries for the Maxi Awards. During the last 3 – 4 years a large number of South African entries were made to the Maxi Awards.

• I am also part of the Congress Organising Committee and over the last 3 years acted as chairman of the committee. This annual congress has grown from 180 delegates in 1990 to this year’s event in September where for the first time 1 000 delegates are expected. The successes of these congresses also convinced the ICSC that South Africa can host a world summit event and the Retail Real Estate World Summit will be held in Cape Town in 2007.

1.3 There is a major upcoming event that you are involved with. Tell us a little about the Retail Real Estate World Summit to be held in October 2007 in Cape Town, South Africa.

• The World Summit in October 2007 takes place in beautiful Cape Town and it is expected that a large number of overseas visitors will use the opportunity to visit South Africa and experience South African hospitality.

• During the last couple of years South Africa has been successful in hosting major world events like the World Cup Rugby event, the World Cup Cricket event and the upcoming World Cup Soccer Final in 2010.

1.4 We’d like to know a little about your personal background. Where were you raised and what was it like growing up?

• ” I form part of the baby boomer generation and grew up in a small rural town in the Free State Province and matriculated at Reitz High School. I studied for 5 years at the University of the Orange Free State where I also met my wife Irma. I am very much a family man with strong emphasis on family values. We have 4 adult children, 2 sons and 2 daughters. Two of them are involved in the property and research industry, one is an outdoor facilitator and the youngest is studying economics. The best times are to have all the children together and to do things together.

1.5 What is your educational background? Did you have any specific retail or real estate education?

• I started with a BA degree and in my second year I became involved with urban market surveys. This was limited to land use studies, vehicle and pedestrian counts and short interviews. This, however, created my interest in urban market research. Urban geography at that point in time was the one subject that clearly stimulated my curiosity. I completed my honours degree in urban geography and immediately proceeded with a Masters Degree, focusing on the differentiation of different suburbs in cities. This degree was my first real encounter with how urban environments and cities operate. The experience that I gained through the masters thesis is the basis of what we are doing currently on a daily basis. In 1983 I completed a doctoral thesis on office development. The focus was mainly on the process of office decentralisation which only started happening during that period. This brought me in contact with a different urban market not often researched and enhanced my understanding of how cities function and operate. I also completed an advanced executive management programme focusing on management business skills. Looking back on my educational career, everything worked together to form the basis of understanding how cities operate world wide.

PART II : CAREER PATH

3.6 I noticed you were a Senior lecturer at UNISA Geography Department focusing on Urban Research. Was that your first job?

• Yes, I used to be a lecturer at UNISA (University of SA) until 1985. My main focus was lecturing urban geography, statistics and urban research. The period at UNISA was probably the best in forming my basic understanding, knowledge and interest in research.

2.1 Tell us how you first become interested in retail real estate? What was your first retail real estate related job? Why did you choose to work there?

During my yeas at UNISA I started working in private practice as a research consultant. I then moved to one of the major banks/building societies in SA, United Bank, and for a period of 6 years I was responsible for retail surveys to understand banking, customer behaviour and to identify new sites for bank branches as well as ATMs. During this period I learned four very important things:

• the importance of the right location, where I realised that 10 metres can make a difference in the success or failure of a particular type of retail operation;

• it is very difficult and expensive to overcome a poor location;

• it is a large capital investment to establish a retail outlet and therefore the importance of the correct decision;

• the basics of market research are to keep reports simple and understandable.

2.2 How did your career unfold after that start? What different positions have you held and what led you down that path?

The university was a very good starting point mainly from an independent research point of view. At United Bank I was exposed to the practical side and the importance of correct market research, objective presentation of results and the correct selection of sites. In 1990 the company Urban Studies was established. Initially we were two partners but 9 years after the inception of the company my partner passed away.

Based on my experience in this field over many years the importance of running a research company mainly focuses on four pillars:

•  is of critical importance to understand the research problem;

• quality fieldwork;

• to have an insight into the holistic urban environment, and

• to add strategic value.

My career unfolded along these pillars with strong emphasis on strategic interpretation, understanding and value added contributions.

2.3 What was your most rewarding job or the most rewarding part of your job and why?

The most rewarding part of my work is to have conducted a large number of intercept studies at a variety of shopping centres throughout South Africa. The rewards mainly came from establishing benchmark figures and to compare new centres to the benchmark figures and to be able to tell whether centres under or over performing. Once centres started with repetitive research, tracking has become a major part of our research, especially to see the changes in market profiles and shopping behaviour in the South African market. As far as these types of surveys are concerned the follow up rewards are the strategic positioning of centres, to assist in turn-around strategies and to take the centres into the next 3 – 5 years.

2.4 What was the best career-related decision you made or opportunity you took? Why was it important to you?

My best career decision was to start with the research company Urban Studies. It was a difficult time in the history of South Africa, but after 16 years it is still very rewarding to be involved in an ever changing South African market.

2.5 Looking back, what was the worst career move you ever made or the best opportunity you passed on? How do you think this affected you in the long term?

My career moves and choices have all contributed to provide me with skills in understanding of how cities operate in the market place, and shopping behaviour. I also decided not to directly get involved in property development, mainly from a purist research point of view. As soon as you get involved in development, objectivity fades.

2.6 Looking back, were there some specific event(s) that were defining moments in your life? If so, what were they?

The death of my partner was probably the single most defining moment in my working career. This has changed the company from a broad based, large research company to a family based operation.

2.7 If you could choose your career path again, would you do anything differently? Do you think you’d be in the same position today or would you be doing something completely different?

No. I would not do anything different. As far as my formal education is concerned I would have also focused on subjects like urban economics and urban sociology. We are a sport loving family and I would have taken up golf instead of all the other sports we participate in.

2.8 What was the most difficult or riskiest career decision you faced?

The riskiest career decision was to start my own business. At that stage our four children were still very young and to leave a secure senior management position at a well established bank was a risky operation.

PART III : EDUCATION

3.1 What role did education play in your career? Did your formal education prepare you for your current position or what did you do to prepare for the industry?

I started focusing on urban market research from my second year at university and that guided my career choices after completing my studies. I always had the vision to become the best urban market researcher in the country. My current position and experience is based on a number of building blocks that have started more than 30 years ago.

3.2 Once you got into retail real estate, did you need to go back to further your career with professional training? Did you get this training informally on the job, or did you get formal training?

Most of the work we currently do is based on urban geography, economics, statistics and research in general. The rest of my career development is based on informal training and experience.

3.3 How important is formal education training to someone pursuing a career like yours?

Formal education training will always remain very important. There is, however, no single university course that can give you a complete understanding of this specific field. The most important is ‘on the ground experience’ – put on your walking shoes and ‘feel’ and experience the city.

3.4 What skills or training does it take to excel in a job like yours? How should those interested in following your path best prepare themselves for success?

It is easy to conduct general market research. Urban market research is much more complex because of the various property segments, all impacting on how people react and behave. The specific behaviour of people has a major impact on where they live, work, play and shop. The main requirements are to understand the spatial, social and economic behaviour of people in our cities. Studies should focus on a combination of these basic subjects.

3.5 How do you rate formal academic training that the “next generation” is receiving? How good a job are schools and universities doing in training students to hit the ground running?

Urban geography has become one of the subjects at school enjoyed by most learners. However, not enough learners make it a career choice. Some universities are doing much better than others and it is very much driven by personalities.

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3.7 You also seem involved in overseas study tours. How do those experiences fit into your career? What do you most enjoy about them?

Travelling is one of the most exciting and broadening experiences. I have visited more than 60 shopping centres in the USA. I have also been to 18 of the top 25 US cities. There is a very large resemblance between US cities and SA cities. City life in South Africa and in the USA is driven by suburban lifestyles, private motor car ownership, decentralised offices and shopping centres. The racial mix in some American cities is also similar to most South African cities. I have learned a tremendous amount from my 7 trips to the USA.

Trips to Europe have been more vacation orientated and less of a learning experience. Earlier this year my wife and I travelled to China and Japan. It was a great experience to walk the streets of Beijing, Shanghai and Tokyo to experience the level of real estate development. Tokyo was an ultimate example of order and neatness. To travel improved my understanding of how other cities function and the way other people live and shop.

3.8 What recommendations would you make to the academic community and why?

There must be a very close relationship to what is taught in the classroom and the experience on ground level.

PART IV : PROFESSIONAL RELATIONS

4.1 A number of respondents have benefited from relationships with other professionals or a mentor. What role did other people play in shaping your life? Was there a particularly important person who influenced your career and if so, who and how did they affect your life?

There are mainly two people who have made a major impact on my development.

Prof. Wynand Senekal at the University of the Free State was the person who brought me in contact with the dynamic nature of cities and urban places. He also directed my further studies to specialise in urban market research.

Prof. Piet Jooste was my supervisor for my PhD studies and he taught me to think holistically. This has become a very important part of my daily work.

4.2 Do you have any words of advice or lessons that you’d like to share with respect to the importance of other individuals or positions?

Every day should be a learning experience. You can learn from your students, other professionals and your every day user or citizen of every city.

4.3 How important are industry affiliations? What characteristics should people look for when choosing industry associations in which to affiliate?
I am the chairperson of the Annual Shopping Centre Congress. This year we are expecting 1 000 delegates at our congress. A substantial amount of time will be allocated to networking.

4.4 What do you believe are the key steps in making an affiliation work for the real estate professional?

A number of industry associations/bodies exist in South Africa where the broader body of people is associated with the property industry. The most critical aspect in this regard is not only to collect but to give and share relevant information. We are still not keen on sharing information in South Africa.

4.5 Do you have any networking tips for young professionals?

There are many opportunities for young professionals to get involved in the industry, to learn from others and to make their own contributions. Apart from national conferences there are also regular monthly regional or chapter activities attended by a very large number of people from the industry.
PART V : ROLE OF RESEARCH

5.1 How important is research to the industry? Is it receiving the recognition it warrants? Why or why not?

The South African market is probably one of the fastest changing markets because of rapid growth, dramatic changes in demographics, increase in the middle and upper income brackets, and the general increase in the mobility of the population. As a result of these changes and new opportunities created, urban market research is more important and necessary than ever before.

5.2 Do you believe a background in research is necessary in order to fully understand the real estate process and markets?

Yes definitely. Many of the different professions associated with real estate business do not offer formal courses in urban market research. Some developers do their own surveys which are mainly data collection and presentations to suit their own goals. There is a definite need for objective and reliable market information and surveys and to understand the research process.

5.3 What elements of research provide the best catapult to a successful career? Is research a good step toward preparation for a management position?

A very good understanding of how cities operate, a good understanding of statistics, and an objective interpretation of the data is required. It is of no use to torture the data until it confesses. Research forms the basis for so many further career developments.

5.4 What are the biggest challenges you face in terms of research?
The biggest challenges facing research in South Africa are to measure the changes in demographics and to understand the growth in the middle and upper market segments. Another big challenge is to obtain reliable information from various sources. The last official Census was conducted in 2001 and unfortunately it will not be repeated during 2006. In a fast growing country with changes in demographics it is of utmost importance to have proper tracking of total population figures. The next census will only be held in 2011. This gap in quality market information is going to be very difficult for the research industry during the next 5 – 7 years.

5.5 According to your qualifications statement, you’ve completed over 2 000 research projects. How have they changed over the years? What are the biggest challenges you face in terms of research?
From a retail point of view the biggest challenge at the moment is to handle and understand the bullish nature of the South African economy and the impact this will have on retail growth and the expansion of shopping centres. In many cases studies are conducted that are very early and at the moment I strongly follow a strategy of ‘follow the roofs’ to make sure that premature developments do not take place. Location will always be very important in shopping centre development. The critical issue at this point in time in South Africa is the correct timing of projects.

5.6 You were involved in the United Bank which focuses on a number of research-related activities including the maintenance of databanks. What is the state of data in South Africa? How does it compare to other markets with which you are familiar including the US?

Discussed above.

More and better information is becoming available in certain areas of the industry, while information from local governments varies from municipality to municipality. In most cases these databanks have not been updated since 1994.

5.7 How has research changed over the past several years? Where is research headed in the industry?

The research industry has changed over time with the improvement in technology, with good use of GIS packages and information as well as palm top related interviewing devices.

5.8 Are lessons learned and research insights portable across country boundaries or are they materially different?
The broad principles of market research remain the same across borders. The focus should however be to understand each and every area because of the differences in demographics, level of urbanisation, income levels, and the way people live. Most of the research by Urban Studies focuses on shopping behaviour and changes mainly because of the increase in the number of competing centres.
PART VI : FUTURE VISION

6.1 How would you characterise the current state of the shopping centre industry in South Africa?
Out of a total of 12 indicators impacting on retail performance, 11 are currently very positive for retailing. The rise in petrol prices also impacts negatively on the consumers in S.A. Motor car sales are the highest ever, building plans passed and completed are at very high levels, the residential market is growing at a rapid rate, businesses confidence indexes are at a high, interest rates are the lowest in 23 years, and retail sales are growing at a rate of 10% per annum. More than 1,4 million m² of retail space was completed during the period 2000 – 2005 and currently there are almost 1 million m² in different planning stages. South Africa is the one country in Africa where the retail and shopping centre development is in line with the rest of the world (excluding the Middle East).

During the past few years most retailers have experienced tremendous growth in share market prices, the highest ever. The retail sector experienced a 20%+ turnover growth year on year.

6.2 Is the shopping centre industry in South Africa similar to other markets or is it significantly different and if so, how?
The shopping centre industry in South Africa is very similar to that of the USA and Australia. According to a recent shopping centre classification all the different components present in the US market are also available in South Africa. The major difference between the South African and the US market is the number of different retailers available and the scale. The main problem with this is the fact that most shopping centres have the same national tenants. There is thus very little differentiation between the different type of shopping centres. A very distinct difference between the South African and US centres is the fact that all major regional, super regional and small regional centres are anchored by grocery stores. This fact resulted in more frequent weekly and monthly visits to our shopping centres, compared to the US centres where the average number of visits per month is 3.2. In South Africa this ranges between 6 – 8 visits per month. There is currently a very strong drive to develop shopping centres in the previously disadvantaged township areas where shopping centre development was restricted. Most of these township areas see new community and regional type centres being built. This will dramatically change shopping behaviour in future. Most CBD areas in South Africa are still strongly supported by the lower end of the market. Many of the CBDs are currently experiencing upgrades and revitalisation.

6.3 Is there one change you would like to see happen in the retail real estate industry in South Africa?

The single most important change I would like to see in the shopping centre market and industry is that shopping centres really become involved in community activities. The shopping centre must become the meeting place of the community and support the big poverty problem in South Africa. In all our centres there is a poverty area close by and the centres can all play a very important role in addressing this huge problem.
6.4 What are the major trends that will affect global retail real estate in the future?

The supply of retail facilities and products will mainly be determined by the focus and growth of the Chinese market. This will have an impact on where and how products will be manufactured as well as the supply chain. Hopefully we will see growth in the African market. A number of South African retailers have moved into the rest of Africa, some with great success while others were less successful. To me personally the development of 3 or 4 of the world’s largest centres in one city (Dubai) is fascinating and clearly indicates that these developers are aiming for the global market. It will be very interesting to see how retail in the rest of the Middle East develops and performs over time.

6.5 What are the key challenges you think young people will face in launching and sustaining successful careers?

A successful career for young people is currently strongly driven by the ability to make money. The most important, however, is to achieve daily job satisfaction, to be committed and dedicated, and to enjoy what you are doing. This will allow one to lead a fulfilled life. Young people need to think wider and experience the world in its global reality.

6.6 How can young professionals prepare for the “future world”?

Get practical, on the ground, first hand experience of how cities operate. It all remains very complex and is changing on a regular basis.

6.7 What advice would you like to share with the next generation of young professionals?

Work hard. Success does not happen over night. Be honest in what you do and you will succeed in life.

6.8 Do you have any thoughts or recommendations you’d like to share with them?

Research remains a very important tool. It is, however, more important that the research is used correctly, add value, and used to formulate strategies that can improve the world we live, work and shop in.