When you manage a shopping center, the things constantly happening in and around the property must be kept under control. The typical retail property is like a large ‘ship’ or tourist vessel, where events are happening on a daily basis.
The retail ‘journey’
The retail ‘journey’ is to a ‘city’ called ‘Investment’; the ‘trip’ could take years to complete, but every day the ‘ship’ must be guided towards the ‘port’ of retail destination. When the ‘trip’ comes to an end, the ‘travelers’ will get off the vessel. The question will be, ‘Has the journey been a successful one?’ Have the ‘travellers’ enjoyed the journey? Have they spent their money wisely?
So retail property and any shopping center investment is quite special in so many different ways. The investment ‘journey’ will involve all of the following elements and people as ‘travelers’ (plus some others):
- Property investors seeking to invest their funds and achieve a good return over time
- Tenants needing to create a business result and return
- Business owners wanting a ‘future’ for their efforts
- Customers requiring retail services and products
- Financiers requiring a return on investment and outlay
- Property managers and leasing experts seeking to improve the asset
So many different people involved in the one property, and so many agendas at play! How can you work through this? The simple answer is you need a retail plan and some control strategies to keep things on track. Somewhere in that process will be local property knowledge and professional skills of a retail nature.
Keeping the investment on its investment ‘path’
Here are some ideas to help you with establishing this kind of professional control system for a shopping center:
- Tenant attraction and retention – A successful retail property needs good tenants, and those that will pull in the customers regularly overtime. That is an ongoing focus, and the tenant mix is at the center of the process. You want the customers to come back to your property to purchase goods; the retail experience on site must be encouraging and comfortable for customers. How can you find the right tenants for the property?
- Lease management processes – The leases in the property will (must) provide stability of income. Make sure that you have the leases specially designed for that process of investment and growth; a generic lease is a waste of time in a retail property.
- Cost controls and maintenance – A budget in a retail property, controlling both income and expenditure is quite important. The budget should be part of the investment plan and business plan for the property. Look at the financial history of the property and use that history for setting key performance indicators of net income.
When you control these things with ongoing focus, the typical retail property can start to take some shape as an investment and valuable asset. That’s the process to keep the ‘retail ship’ on its ‘investment journey’.