When it comes to a large retail property and its performance as an investment, it is really important to ensure that the tenant mix is stable and well balanced. The pressures on tenants are many today and that is a major threat to retail property performance. A landlord can have the best retail property in the local area, but if tenants cannot pay the rent then there is a key problem at the base of property performance and growth. So here is what needs to be considered when it comes to property performance and finding new tenants for your tenant mix:
- What tenants are successful in the property and how are they being encouraged to grow as a business? A successful tenant is likely to stay in the property. It is far too costly to move and relocate to other premises. Not only that, the tenant could lose their customer base in the move.
- What leases are threats to the income in the property in the coming 12 months? Look for lease expiry dates, rent reviews, pressures on expansion or contraction of tenancies.
- Could the common area be modified to include some smaller kiosk type tenants? Coffee shops and food outlets are but one choice; you could also consider small booth type tenants across many retail segments.
- How is the major tenant tracking on sales and growth? Any and all major tenants should be regularly spoken with regards trade and sales. Watch their levels of stock and customer numbers through the property.
- Any smaller destination type tenants will bring people to your property. They should be placed in locations that create foot traffic through the property past the other specialty tenants.
- Is the major anchor tenant well matched to the specialty tenants? The leases for anchor tenants are usually quite long. That being said, you really do need to work with the anchor tenant to help their continual integration in the property. Get them involved with the specialty tenants on a regular basis.
- What parts of the property should be ungraded or refurbished to maintain property presentation? In a retail property it is necessary to do upgrades regularly to keep the property looking good and attracting the customers. These upgrades should be balanced with lease renewals and lease expires.
- Local businesses in other retail properties may be good candidates for relocation to your property. Visiting the other properties and checking out the tenant mix is a wise move.
- Ask the customers visiting your shopping centre what they would like in the tenant mix. Customers will always give you positive feedback and ideas.
- Talk to the existing tenants on a regular basis in your property. It is surprising what they see on a weekly basis that could be a good strategy to merge into your property business plan.
All professional retail leasing experts and retail property managers understand the unique nature of their property and investment type. When you specialise in retail property you can provide real solutions for the landlords that need our help.