A retail shopping centre is much more complex to manage than all other investment property types. When it comes to changing property manager and bringing a shopping centre into your real estate agency systems, this means that there are many things to cover. Accuracy is important to the process.
The best way to do this is by using experienced retail managers and leasing experts (for this you will need to employ the right people), and in using a series of check-lists to help you ask the right questions and capture all the relevant information.
A property handover is the only time where you can ask the right questions and have the attention of the previous property owner or manager in giving you information. It is unlikely that they will cooperate with you after the handover as other priorities take over. So you must have your handover systems sorted and accurately supporting your business processes.
To help you get started here are some ideas and points of focus:
- Inspect the property physically before you do anything else. This helps you understand what you are focusing on, the tenant mix, the surrounding areas, the appearance of the property and any immediate observable issues.
- Get details of all the leases and cross reference them to the tenancy schedule and the tenants in occupancy. You will identify important lease factors from that process including critical dates, vacancies, rental changes, outgoings recoveries, permitted use issues and occupancy criteria. Reviewing all the leases for the property in this way can be a very tedious process but it has to be done and will set you up for a more successful management process. You will find things that require action and planning. In a larger shopping centre it is wise to have a team of people to help you cover the lease and tenancy mix analysis.
- The maintenance operational costs of the property will have impact on the current outgoings budget and recoveries from the tenants; you will need up to date actual expenditure running costs for the property in the current financial year and you will also require a performance history of those issues over the last few years. From that you can then track, plan, and predict new property performance opportunities.
- Ask about any current risk issues and disputes in the property that will flow through into the future. In retail property day to day operations it is the case that you will have more disputes and challenges to deal with from the tenants and customers. Risks need to be minimised and disputes should be controlled. Your insurance policy will have relevance to these things as well.
- The marketing of the property will have relevance to customer attraction, the local community, and the levels of trade for the tenants, so ask about the marketing levies that apply across the tenant mix (if any) and how the marketing of the property has been going.
So these things will help you get started in assessing how you will manage the retail shopping center. The more you know about the property, the easier it is to set some good management processes in place with your real estate team.