12 Essential Tips for Managing Retail Shopping Centers
Managing a retail shopping center is a very special process. It requires the right leasing and property management specialists that understand all the key facts of the property type and the local area. Retail property requirements are more complex than those that apply to office and industrial property. If retail is a property type that interests you, then I suggest you learn as much as you can about things such as customer demographics, business planning in retail, lease management, tenant and landlord services, and strategic property planning.
The success of a shopping center is driven from a low vacancy rate and the vibrancy of the tenancy mix for the customer market. Many things come together to make this happen. The agents that work in this segment of the market are usually specialists in many ways; this helps them understand what they are looking for when it comes to improving retail property performance.
Here are some key issues to bring into your property management processes and systems:
- The leases in the property should be tracked and understood. Each lease will have issues that impact occupancy and cash flow. Given that you will have many tenants in the one property each lease can be different. A full lease review will help you understand critical dates that impact property performance.
- Tenant Relations should be strengthened as much as possible. A good tenant will help the landlord improve occupancy and rental returns. In a busy shopping centre it is not unusual to meet with all your tenants at least monthly, and for those tenants that are active on any issues, you would be meeting with them much more frequently.
- The Landlords targets in property performance should be set and merged into the business plan for the property. Track and measure your progress on those targets each month.
- Lease strategies and vacancy issues will depend on the plans of the landlord. Set the rules and standards for leases and vacancies at the beginning of each financial year.
- Establish a tenant retention plan to protect the tenant mix and rental returns for the property. A standard lease for the property will be part of that process.
- Tenant mix processes should apply in any retail property. Understand the tenants that you need and where you require them. Cluster some of your good tenants in precincts within the property so you can create zones of activity and sales.
- Look for shifts in tenant trade and customer service. They are the early signs that something is changing. The signs to look for are low levels of stock on shelf, staff leaving, and constant sales promotions.
- Monitor permitted uses for all the tenants. The use of the premises as detailed in the leases must be complied with as it helps tenants integrate with each other and improve sales.
- Arrears will happen from time to time. Be prepared for the arrears and take action immediately you find them. Read the lease for any breach provisions.
- Marketing a retail property is a very special process. You are marketing the property to customers and you will need a special budget or levy for the process. Consult with the landlord and their solicitor as to how that can be done to improve the property.
- Property presentation and safety are risk management issues. The property should offer convenient and safe use for tenants and customers. You can add to this environmental, heritage, and energy management.
- Income and expenditure performance in this type of property can be quite complex. You will need a good software program to help you and an experienced manager to make the right decisions on behalf of the landlord.
You can add to this list based on local area issues, property type, and customers.
So what size or type of management fee should you get for managing a property of this type? A large one is the answer. You will find that the processes behind the management and leasing of a property of this type are significant. Don’t cut corners when it comes to retail property management fees. Top services require a solid and reasonable fee.
