Retail Leasing Strategies for Real Estate Agents
Retail tenants are very different regarding leasing needs and property choices. They are more demanding and selective compared to office or industrial tenants. For this reason, we should and do have leasing specialists that relate to retail properties and understand the retail business.
Stand-alone retail properties are quite easy to assess and compare to other properties in the same area. It is the shopping centres that demand real skill and knowledge. If you aspire to be a retail leasing executive, start to build your knowledge of shopping centres and tenancy mix.
Tenancy Mix Thriving in Retail
Retail properties survive and thrive if they are of a high standard and the tenant mix is well considered and structured. When the retail economy gets slow or tough, you must have the right tenants who complement each other and serve the customers well.
Here are some factors that most retailers look for when considering a retail shop in a shopping centre:
- Sales growth should be possible from customer visits to the property. Look at the daily visits of customers to the shopping centre; track those numbers on a tenant and merchandise group basis.
- Property location on a main road will help customer visits and sales.
- Property presentation and maintenance. Tenants don’t want to struggle in a poorly maintained shopping complex.
- Car parking should be convenient for tenants and shoppers. Convenience is a big thing when it comes to the layout and access to a shopping centre. Determine how customers use the car park, where they enter the property, and just how convenient it is for shoppers to get what they want from the retail property.
- Store layout, frontage, tenancy size, signage, and positioning will all be relative to the tenant’s product or service. Well-positioned stores should attract a premium in rental for their high-profile position.
- Lease terms and conditions will be important to both the tenant and the landlord, albeit from different perspectives. Understand who your client is in the shop lease negotiation and what the market rents are doing in the local area. Consider the vacancy factors in the property and then negotiate a realistic lease for long-term occupancy.
- A prospective tenant is likely going to compare your vacant tenancy to others in competing properties. Understand just where these competing retail properties are and what type of challenges they have with vacancies today. In an ideal world it would be great to understand what the true market rentals are in those other properties.
Leasing a retail property is a specialist process. You can do very well as a specialist leasing agent with shopping centres and CBD Retail leasing. Grow your knowledge and get to know the tenants in the market and in other shopping centres.
