Most shopping centres require regular upgrade and renovation. As part of that process, risk management and planning are key factors to making things work correctly.
So let’s look at how a risk assessment could happen in working towards a renovation of a retail property. You know your location and town or city better than I so you can perhaps add more items to the list below. You can also add factors relating to your property and landlord that require special note.
So here we can list some of the bigger risk assessment issues to help you get started in planning and implementing a retail property renovation:
- Will the property draw in more customers when renovated? – This is an interesting question and the only way to get a reasonable perspective on the answer is to know the customers and what they are looking for. You will need to do some market research before you do anything else here. Understand what the customers are looking for and determine how you can provide it in your property through undertaking the renovations.
- How will you attract customers to the property whilst the works are underway? – You will lose some customers simply because they may not like the disruption of contractors, trades, and building works. You will need a management plan to minimise disruption to shoppers.
- The best time of year to start? – Depending on the size of your works renovation, the time of year to start the project will be based on length of the project and the ultimate opening strategy that you want to achieve. With most retail properties, you will want to have the renovation completed before the prime retail shopping seasons such as Christmas.
- What is the state of the current retail property market? – You should be renovating the property when you can see that the retail spending patterns of shoppers are strong and vibrant. If the retail shopping centre market is under pressure you don’t want to start any disruptive property upgrades.
- What about threats from competing properties? – Like it or not, competing properties will always be an issue potentially drawing away your customers and also your tenants. When there is an exodus of customers or tenants away from your property you have real issues to watch with market rents, vacancy factors, retail sales, and lease negotiations.
- What about the improvement factors? – Study the potential outcome of the renovation when it comes to improved sales, rents, and customer visits. You will want to see a clear advantage in each category.
So you can judge the big issues associated with your retail property renovation works. If all the big factors seem under control then you can get down to the finer detail.