In a retail property and Shopping Centre management today, it is very much the case that the tenancy mix and the tenancy profile in your property will be critical to the customer base and customer interest.
When you get the tenant mix analysis correct, you will generate more sales and returning customers to the property over the long term. That is exactly what you want when it comes to retail property performance today. A retail property asset that is generating repeat business and customer interest will strengthen and underpin the market rental for the landlord. Everything is linked.
When it comes to analyzing the tenancy mix, it is very important to look at the overall function and performance of the property, and the way in which the customers use it. Each vacant tenancy should not be looked at in isolation, but rather in balance with everything else that surrounds it.
The vacancy profile of the property today should be assessed and then estimates should be made as to the upcoming vacancies that could occur in various locations. It is wise to look at least 12 months into the future as part of this vacancy planning process.
Here are some other ideas to assess the tenancy profile in your property and how it can be improved.
- At the very basic end of the analysis, you should be looking at the existing leases as they apply to each tenancy. That will include rent reviews, lease expiry dates, options for further terms, relocation provisions, renovation strategies, and permitted use. On that basis you should be doing a very comprehensive tenancy schedule analysis.
- Understand that many of the leases in a property are unique and separately structured. They will have terms and conditions that differ from tenancies nearby. Pick those differences and note how they can impact your retail property sales. Also understand how those differences can impact the adjacent tenancies.
- The customers to the property will show distinct patterns of shopping and sales. Firstly take a look at the shopping year and how the trade changes from month to month. You will need to split the trade up into separate retail categories.
- Your customers should be defined by type and spending patterns. Understand where your customers come from and how they get to the property. It may be that public transport has a lot to do with property access for the customers.
- On certain days of the week the types of customers coming to the property will change as to category. The same thing can occur at different times of the day. The only way to understand this is through taking a customer survey over a number of weeks. You can also talk to tenants in the property to get feedback on the matter.
- The property will contain a mixture of retail tenancies, specialty tenancies, destination tenancies, and anchor tenants. All of these are positioned as part of the clustering process to encourage sales in different parts of the property.
- Establish a cluster strategy across the property. A cluster is usually a group of four or five tenants that can successfully trade and build sales off each other. In a larger retail property, you may have five or six clusters of tenants at strategic points throughout the property. In this way you will be encouraging sales across the tenancy mix. One cluster can lead to the next.
Spend time on your tenancy mix to ensure that the balance between customers, tenants, and the landlord successfully achieves predictable levels of trade and ongoing business.