Every retail shopping centre should have an accurate and successful business plan. In this way you can address the key issues that will help the property perform financially and physically.
There are many stakeholders to the performance of a retail property. Here are the main ones:
All of these groups have special points of focus when it comes to the results achieved from the property. That is where an experienced property manager can bring stability to the equation.
To bring about the levels of control and focus for all parties, a business plan will integrate the key issues strategically. Here are some tips to help you construct a shopping centre business plan:
- Define the territory or the region that the property serves from a retail shopping point of view. A full 80% of the customer base should be located within that area or region. When you understand the territory, you will also understand the customer types.
- It will be necessary to do a market survey of customers. That should be undertaken over a period of two or three weeks at various times on various days. There will be different shopping patterns to understand when it comes to the customer profiles and property visitations.
- Review all of the leases within the property for critical dates, lease terminations, and special terms and conditions. Pay particular attention when it comes to renovation and relocation requirements. From the lease review process, you can look at the vacancy threats and vacancy situations that can arise over the next 12 to 24 months. Prepare for the vacancy threat through a tenant retention plan and lease marketing process.
- Divide your tenants into groups of desirability. Some tenants will be critical to the future of the property and on that basis should be retained at all costs. The loss of a specialty tenant from within a property is not really a big issue, however if you get too many of them at the same time it will destabilise the tenancy mix and the clustering strategies you have already locked in.
- Review the profiles and the stability of the anchor tenants. Look for any threats that could apply to their occupancy and trade. A successful anchor tenant will bring customers to the property and trade to the specialty tenants. Ensure that the relationships between both are quite good.
- The income and the expenditure performance of the property over time should be compared to the averages within the property type locally. The outgoings for your property should be suitably similar to other local properties. In that way your rental structures can be competitive and realistic.
- Undertake an assessment of market rental through your town or city; take into account properties of similar type. Also take into account the age of the competing properties and the relative locations. From all of this information, you can determine your market rental strategies for the coming 12 months. You can then add to that the lease strategies that are required to fill the vacancies that will inevitably occur.
So this list will give you the foundation for establishing a retail business plan for your property. When you have accurate information at the start, the planning process and the tenant retention plans are easy to put together. Every retail plan of this nature should be reviewed quarterly to take into account any shifts and changes in the marketplace.