Revolutionizing Retail Spaces: A Tactical Approach to Shopping Centres

Shopping malls are a dynamic and ever-changing property asset class. It is a highly sought-after asset class among seasoned investors.

What is the attraction of retail property? The rewards and returns are numerous for property investors who can work on improving the asset class and tenancy mix.

As a result, many people are always looking to buy, sell, or lease retail properties.

Top Retail Agents

Top agents with the necessary retail property knowledge and experience should work with sales and leasing activity in the asset class.

Any agent who wishes to specialise in retail property should learn about the components of property performance and what to look for regarding retail property function and investment opportunities.

A checklist approach for investigating a shopping centre’s leasing and investment directions containing multiple tenants is one effective way to capture and analyse shopping centre performance and planning.

Retail Property Questions: A Checklist

Questions like these will help you begin to understand retail property performance, sales and leasing activity, and how a property could be sold or leased:

• VACANCY FACTORS: What are the vacancy threats or existing vacancies that must be addressed? Don’t wait for a vacancy to present itself. Look for early warning signs and take action to resolve issues.
• INCOME STREAMS: Is the property’s income stream comparable to or better than the local market rental? Rents will fluctuate, and sales, customer interest, and retail offerings will influence a tenant’s ability to pay. Because retail shop rents depend on factors like shop size, retail produce or service offered, shop location, and customer types, not all tenants can afford the same market rental.
• CUSTOMER INTEREST: What is happening with the customer base, and does the property reflect that? Keep an eye on the ‘door counts,’ which indicate where people may enter the property. The door counts can or should provide data on customer visits by separate doors, times of day, and the best days of the week, allowing you to graph and track those numbers over weeks and months.
• DEMOGRAPHICS: Is the property well situated in relation to the customer demographic? Ask customers if they find it easy and convenient to visit the property.
• RETAIL COMPETITION: What is the retail shopping mall competition like? Is it affecting your property? Examine the locations of other retail properties to see if any factors could attract customers and tenants to those other properties.
• RETAIL SALES: How are sales for retailers and merchandise groups going? If circumstances and occupancy leases allow, always track tenant and merchandise group sales.
• TENANCY MIX: Can the tenancy mix be improved, and if so, how? Consider the property’s option and vacancy calendar. Prepare to make changes to the tenant mix well before the dates.
• MISSING TENANTS: What types of tenancies and businesses are you missing from the property? You can always improve the tenancy mix by finding new tenants and relocating existing ones.
• PROPERTY PRESENTATION: Is the property well-maintained, and is there a capital works programme in place? Retail shopping centres, as a property type, necessitate ongoing maintenance and upkeep. Landlords who refuse to spend money on maintenance and appearances typically see rental rates drop and customer interest shift to other properties that offer a better retail environment or experience.
• SWOT ANALYSIS: Conduct a SWOT analysis of the tenant mix to identify key issues and changes that are required. Understand and identify the weaker and stronger tenants in the tenancy mix so that changes and optimisation factors can occur when time and lease situations allow.
• INCOME COMPARISONS: Compare actual income and expenditure results to other retail properties in the area. How does your retail property compare to the industry averages in terms of income and expenditure?
• LEASE RENTALS AND OFFERS: What lease deals and incentives do you have to offer to attract new tenants to a retail property? It is critical that you are competitive and appealing to new tenants.
• OCCUPANCY DOCUMENTATION: Always check out the lease and occupancy documentation to understand critical dates, changes, landlord and tenant covenants, and obligations of the parties to the occupancy.

So, all of these factors are related to occupancy.

You can find things and see where improvements can be made as you investigate the questions. So that is the start of a retail shopping centre performance plan that can be improved and changed over time.

Prepare to Change and Improve Retail Property

Given that the typical retail shopping centre environment will undergo several changes annually, any shopping centre plan should be changed and varied as needed every month or quarter to reflect property market trends.

Any changes to a retail shopping centre that you make from the plan can be incorporated into the tenancy mix as leases expire, tenancies vacate, or opportunities arise.