Vacancies in shop leasing can be a real drag on shopping center performance and retail sales. Any current or upcoming shop vacancy in a tenant mix should be resolved quickly and directly. It is important that the customers to the property do not feel that there is an issue in occupancy and retail offering.
Real strategies are required to ensure that the tenancy mix works in a comprehensive way for both customers and the landlord. From property to property, strategies and issues will always vary. Understand what works and know how to make that happen with tenants and customer based solutions. Retail sales are a strange equation requiring care and attention to detail from beginning to end.
Why Do Vacancies Happen?
Vacancies in shop leasing happen for a number of reasons. Most particularly the reasons will usually be one or more of the following:
- Requirements for renovation and relocation within the property
- Expansion or contraction issues with the tenancy mix
- The upcoming expiry of the lease
- Distressed tenants suffering pressures of business and sales
- Relationship difficulties between tenants and the landlord
- Maintenance requirements within the property
- Redevelopment plans and strategies for the property
With any retail shopping centre today, the factors of vacancy and the pressures of the tenancy mix require monitoring and planning; that is the job of the shopping centre manager for the leasing executive. It is advisable to have a formalised leasing strategy and marketing plan to help resolve vacancy factors quickly and specifically so the property income continues with minimal disruption to cash flow.
The best tenants should be selected for each vacancy given the location of the shop within the retail property or shopping centre, the levels of market rental required for the location, and the balance of tenant clustering within the tenancy mix.
Leasing Ideas for Shops
Here are some ideas to help you find retail tenants to fill current and upcoming vacancies in your retail shopping centre:
- Other shopping centres – Check out the other retail properties in the region or city. You will get plenty of ideas to help with tenant sourcing, planning and prospecting. Successful retail businesses are easily identified in reviewing the performance of other shopping centres. It is then a simple matter of approaching the targeted tenants directly.
- Focus within tenancy types – It is a fact that some tenants will be better than others when it comes to certain shop locations. Determine the best tenancy types that will help bolster your tenancy mix directly and effectively. Look for the best retailers in other locations that could be encouraged to relocate or expand into another property and most particularly your shopping centre.
- Watch the changes in the retail segment – Some shops will be more successful than others. That is a factor of the economy when it comes to customer interest and retail shopping patterns. The pressures of the Internet have dramatically changed the way customers look for retail products and services. The traditional retail business has now taken a different shape and complexity when it comes to customer service and customer access. Understand the retail businesses that are more attractive and viable than others. Choose tenants that have a future in a shopping centre location and performance.
- Existing retail tenants – Successful tenants within a shopping centre will be a good source of market intelligence and referrals to other successful businesses locally; talk to your existing tenants frequently and often as they can and usually will share plenty of information regards retail sales, new tenant alternatives, and customer interest. Most specialty retail tenants today are based on the family small business structure or model. Good tenants know other tenants and family businesses. The referrals will be there if you ask the right questions.
- Franchise Groups – Some franchise groups will suit your tenant mix into the future. You can get plenty of retail franchise ideas and targets from looking at other major shopping centers and their overall tenant mix. Look at how the clusters work between properties and retail offerings.
Empty shops are a problem in many ways. Keep ahead of your shop vacancies by directly planning tenant placement and vacancy marketing. Work on all your vacancies early.