The management of a retail shopping center is quite special given that there are many things to monitor and address. Each day there will be issues with tenants, customers, and contractors. There will be financial and physical matters to control and optimize. So a good reporting system will help you stay on top of the things that really matter in retail property operations and performance.
Ultimately the person that you serve as part of the management process will be the landlord as the property owner. The other stakeholders to the process will be financiers, customers to the property, and the tenants in occupation. Each of the stakeholders will have a different perception and requirement from property operations and performance.
Clear reporting strategies in retail centers
So let’s look at the reporting strategies that can help you stay on top of the retail issues and the trade for the center. Let’s get started with this concept. Here are some of the most important aspects to merge into your reporting system:
- INCOME: At the top of the list there will always be the income created by the property and the tenants in occupation. Rental arrears, vacancy factors, and retail trade will have an impact on the income performance of the property. Understand the property for what it is when it comes to income, but also understand the trends of the local property market, the retail sentiment, and the interests of customers coming to the property to purchase goods and services. Each day the rental figures should be checked from the various leases and tenants involved in the asset. Arrears should be monitored and minimized. Any arrears occurring should be immediately addressed through some direct communication with the tenant and the landlord.
- RUNNING COSTS: The expenditure to run the property will generally be extracted from the income cash flow. To do that successfully and with some level of control, you will need a property budget that is approved for a financial year and endorsed by the landlord accordingly. Look at the property so you can see how the elements of expenditure change throughout the year, and also determine the factors that will need to be addressed and paid for from the expenditure budget. Generally, the big items of expenditure will be rates and taxes, energy, and insurances. Beyond those three items, there will be issues of property maintenance, repair, and capital expense. The larger the property, the more complex the cash flow and the budgetary requirements.
- PROPERTY BUDGET: Most retail properties will have a budget for the current financial year and a forecast for the coming financial periods. Ask to see the budget, or create one for the clients that you serve. The income and expenditure together with capital items will be clearly detailed in the budgetary process for the property for each period of 12 months. Larger items of expenditure should be merged into the budget on a timed basis. That will then allow the property cash flow to be staged and controlled as best possible.
- REPAIRS AND MAINTENANCE: Maintenance issues will occur on a daily basis. Some of those items will be predictable, where others will be unexpected. Response systems should be established to handle the maintenance requirements of the property at a standard level and also as an emergency response. Choose the right contractors for the property that can offer direct and timely response to support the maintenance process.
- AVOID RISK RELATED PROBLEMS: Risk management will be an element of property performance to manage and address. When you place a lot of tenants and customers into the property on a regular basis, factors of risk, damage, and injury are quite common. Emergency response systems and factors of insurance will be required to keep those risk elements control. The larger the shopping centre, the more detailed and complex the risk management and emergency response processes. Specialist contractors can provide valuable input and assistance when it comes to this element of property performance.
- PROMOTIONAL: Marketing strategies are always active and relevant to the performance of a retail property. The tenants in the asset, the property branding, and the services and/or products offered for sale need to be merged into a direct marketing process to the customers in the local demographic. A well promoted property will always achieve better levels of sales and customer interest.
- UPGRADES: Renovation and relocation strategies are always needed to maintain the appearance of a retail property at the highest of levels. Customers soon know when maintenance factors are neglected or postponed. The common areas of the property are the first areas to show maintenance neglect. It is interesting to remember that customer sentiment and comfort will be underpinned by the maintenance aspects of a retail property. If the customer doesn’t feel good when their shopping for goods and services, they simply will move their retail requirements elsewhere.
- THE TENANT OFFERING AND MIX: A top-quality shopping centre will be supported by an excellent tenant mix and most importantly, accurate and relevant lease documentation. It is the job of the property manager or leasing manager to monitor and address the factors of change and churn coming from the vacancy factors and the lease documentation. Critical dates will be part of the process of lease administration and tenancy management. Get to know the tenants in occupation and the leases that protect the cash flow of the investment. Look at the dates that apply to changes in lease occupancy and stay well ahead of tenancy change and churn.
So these are the major aspects of retail property performance to address and monitor in a regular ongoing way. There are others to add to the list so that the reporting process to the landlords that you serve is clearly matched and addressed as required. Understand the retail property for its strengths and its weaknesses. Ensure that your reporting processes are tuned to the property and the landlord’s requirements.