The leasing and management processes in a Shopping Centre are quite complicated. That is because the property success depends on the tenant mix and the customer requirements. Every tenant that is chosen for the property should be selected on the basis of a clear match to the customer shopping patterns and the prevailing tenant mix in and around the zone of the vacancy.
When you have a vacancy in a retail property it is too easy to just seek out a single tenant to fill the mix. An incorrectly placed tenant can impact the surrounding tenants in the ‘cluster’. Over time that can have a big impact on retail trade.
Every landlord and retail shopping centre manager wants to minimise the vacancy factors in the property however it is essential that this is done in the right way. Tenant retention plans and property business plans all become useful in such circumstances.
So the message here is that the retail leasing process in a shopping centre is a fine balance of some important things including:
- Rental that can be paid for the business type
- The location of the tenancy in proximity to others
- The right permitted use in the lease that matches the customer requirements
- Prevailing market rentals and incentives
- Fit out design and layout
- Customer requirements of products and services
- Landlord cash flow and property plans
- Renovation and relocation requirements
It should be said that the retail property market is governed by special and unique pressures not normally experienced in office and industrial property. If you choose to work on any retail property, you should ‘specialise’ in the process. There are many things to know about and work with when it comes to retail leasing, sales and property management.
The retail spending patterns of the broader community will be of great concern when it comes to selecting tenants and placing them into your shopping centre. As part of that consideration, understand the customer demographic that visits the retail property, and find out when and why they do that. Understand the impact of other competing properties nearby and how they cross over into your ideal customer profile.
Are there any other new retail property developments under consideration in your local area and how will they effect the existing properties nearby? Check out the local planning office on a monthly basis for that information on new developments.
It is interesting to note that most good retailers will have a very good idea of what the shopping patterns are doing, as well as the requirements of the shopper as they visit your property. Stay close to your tenants and listen to what they are saying about customers and spending patterns.
Most Landlords, Shopping Centre Managers, and Tenants should work together when it comes to building the success of a retail shopping centre. This is a very special process to refine and grow successfully as part of your leasing structure and tenant retention plan.