When you have a vacancy to fill in a retail shopping centre, you do need some effective and direct leasing strategies to pull in the right tenant enquiries in a timely way. It is not sufficient to just put an advert on the internet as part of a ‘hope and wait’ process. (NB – you can get our free commercial real estate course ‘Snapshot’ right here)
Shopping centres are refined assets requiring shaping and ‘driven’ vacancy solutions. The best tenants are required for the growth of shop income and tenant mix attraction.
To resolve a retail vacancy with the right type of product offering and tenant, you firstly have some questions to consider. Here are a few good questions and concepts to look at:
- What stores are customers visiting now? – Understand the shopping priorities of customers now, and then see if there are patterns or priorities that seem to be working with certain tenants or merchandise groups. The better types of tenants from a sales and customer perspective will tell you what retail merchandise seems to be of attraction to the market place and customer demographic.
- When are customers shopping? – There will be patterns to retail goods and services purchasing, that is both on a weekly and yearly basis. The sales figures for the property will give you those patterns by time and by type. You will also see consistently successful retail tenants that stand out as sales leaders in the shopping centre.
- How often do customers visit the property? – The only way you will answer this question is through a regular customer survey undertaken in the property. Any good-sized shopping centre should be surveying customers at least once per year.
- Ask the other tenants what they think and what they know – The tenants in the property will give you a reasonable understanding of customer interest and sales activity. They will know what customers are saying and thinking.
- What are the ‘missing links’ in the current tenant mix? – If you compare your shopping centre and its ‘mix’ to others in the location, you may see some tenant types that you are missing from your overall retail offering. Ideas like this will help you see viable and valuable tenant types that you can add to the property.
- How are your tenants and the shop ‘clusters’ working now? – By ‘clusters’ I mean the groups of 5 to 8 tenants positioned in zones around the property and located at the entrances, traffic points, and common areas. A good tenant mix reflects a balanced set of tenant clusters where customer interest is encouraged and sustained as they seek out and purchase goods and services. One sale can lead to others if you get your tenant clusters optimized.
From these simple and yet strategic questions, you can develop a good idea of what tenants may suit your retail shop vacancy. When you have that ‘retail focus’, you can take directed leasing action to improve the property for the customers, the other tenants in the mix, and the landlord. That is a good equation of property performance that you should work to in any shopping centre.