A retail shopping centre is a quite unique and special property in many different ways when compared to other property types. A shopping centre needs to be understood both from the physical and financial perspectives.
Shopping centre managers and leasing experts concentrate exclusively on the property type within the industry and specialise accordingly. In that way they can bring exceptional value and service to the clients that they serve. They can also ask reasonable fees for services offered. The fees and commissions in managing and leasing retail property are generally higher per transaction than those fees and commissions that you would achieve from office or commercial property.
Is this for you?
If you are considering this segment of the property industry as a part of your property specialisation, then you will need to grow your knowledge and skills accordingly. To help you on the path of retail specialisation, you can create a series of checklists to help you with property inspections and customer involvement. A series of checklists can help you focus on the right questions and the right factors of property investigation.
Shopping centre management and leasing strategies are very different and complex when compared to that of office or industrial property. There are many different questions that you would ask and put to tenants and landlords in a retail shopping centre. There are also different circumstances that you would investigate and explore in each case. Essentially a shopping centre is a vibrant and balanced financial model of tenants, landlords, and customers. The property needs to service the requirements of all stakeholders.
To help you develop a checklist for inspecting a shopping centre, here are some ideas to start with and add to. You could add factors involving the variations of location, tenant mix, and landlord investment criteria. So here is a basic start to your checklist in retail property:
- Car park presentation and effectiveness – I like to start a property review from the carpark, given that most customers would enter a property from that point. How would they see the effectiveness of the car park? Is it friendly to the common everyday user? Can customers get in and out of the property quickly and effectively? There will be both new and existing customers coming to the property every day. Look at the property from both perspectives.
- Transport drop off points – Some customers get to a property from other modes of transport such as buses, taxis, walking, and bicycle. Are all modes of transport catered for in the property effectively and comprehensively?
- Entrances to the shopping centre mall – The entrances to a retail shopping centre should be open and welcoming. Look at the signage and the branding at all entrances. Understand any problems with presentation and cleaning that need to be addressed.
- Common areas – Most retail malls and shopping centres have open common areas where people can congregate and gather. The common strategy with most common areas is to encourage people to stay and linger as part of their shopping centre experience. That is how extra sales occur. Does your mall common area allow that process to occur?
- Services and amenities – If a person visiting your property wants to use the amenities, can they access them easily? Are the amenities effective and locatable? Are they clean and modern? The services and amenities in a shopping centre are a direct extension of the customer experience; they have to be of high quality.
- Signage standards – Look at the signage in a retail property to understand the standards and rules that apply. In a high quality shopping centre it is common that all signage is managed to strict rules and regulations. In that way the signage standards can be maintained and the correct branding of the property supported over time.
- Renovation needs – Are there issues with the property that require a renovation to be undertaken? Presentation is everything in retail shopping center performance.
- Vacancies – Understand how many vacancies may exist in the property at one time. Generally a retail vacancy can be filled with short term occupants or a vacant shop can be covered over with marketing material and high quality timber facia till a new tenant is found. That being said, any shopping centre should be optimised so the vacancy factors are minimised and the customer experience is maintained at a high level. Customers see vacant shops; they also understand when the tenant mix is getting a bit basic or ‘thin’. The customers that do not get what they want in a retail property visit will go elsewhere.
- The balance of the tenant mix – Assess the mix of tenants in the property and the suitability of those tenants to the customer base or demographic. It is quite easy to look at a tenant layout and shop presentation to understand if they are matching the customer profile and requirements for the property.
- Anchor tenants – How many anchor tenants are there in the property? Are they all trading well? Are the anchor tenants suitable for trade enhancement? Do the anchor tenants pull in customers? Look at how customers enter the shopping centre and how they would move to the anchor tenants as part of a shopping experience.
- Specialty tenants – In most cases the specialty tenants in a retail property are chosen for merchandise offering, and that offering is matched to the customer profile. Specialty tenants are ‘clustered’ to allow multiple sales and purchases from complementary shops in the general location. There should be a number of clusters of shops in a shopping centre to allow trade to thrive.
- Overall property presentation – Is the property clean and well presented? Property presentation is part of the customer experience. A dirty or low grade property presentation will push customers away.
So this checklist is a good start to help in reviewing retail shopping center presentation and operations. You can add to these things mentioned and refine your retail checklist so that it applies directly for the location and the customers or landlords that you serve.