The shopping centre performance today is quite special and needs to be respected as such. A small error in the performance plan for the property can result in sales decline and an increase in vacancies. That can then flow through to the investment in many different ways.
So what can you do? The requirements of retailers and landlords should be respected and fully understood by the brokers and agents servicing that part of the property industry and the particular shopping center. Special people and special knowledge will feature as part of providing successful shopping centre management and leasing services today.
What does it take to create a successful retail property?
The success of a shopping centre will be based on a number of key facts and property elements that are shaped over time. Customer sentiment will change a number of times during the year, and on that basis the management and leasing process of the retail property should be formed and shaped through marketing into a positive customer experience and interaction, and then hopefully boost sales activity.
Here are some of the key facts to merge into your shopping centre management and leasing activities. You can add locational factors and client requirements to the list:
- Get your vacancies under control. Assess the tenancy mix for current and upcoming vacancies. Look for the tenants that are under pressure or those that need to relocate as part of an expansion or contraction. Vacancy planning is part of the annual retail shopping centre business planning process. To help get your vacancies under control you will also need to assess the prevailing market conditions and understand what is happening with other retail properties nearby. Assess the vacancy factors by merchandise segment and compare your property to other comparable properties and the location. Retail property performance today is impacted largely by market rentals, occupancy costs, and customer sales. The Internet will have an impact on certain retail merchandise groups, and on that basis you should be watching those retailers that could be adversely affected by online internet based sales.
- Understand your lease documentation as it is today and how it can be improved. Review all of the leases within the property so that you have a clear and specific awareness of critical dates, rental changes, permitted uses, and occupancy terms. In any large retail property, is quite likely that the variation of leases will be significant so you will need to undertake a full lease analysis cross the entire tenancy mix. That will be a priority when you first take over any new retail property.
- Review the tenancy mix regularly. Within the tenancy mix you will have specialty tenants and anchor tenants to watch. They will all have different levels of success when it comes to sales and marketing. You can and should be tracking sales results by a tenancy and by merchandise group across the entire shopping centre. That will allow you to identify the weaker tenants and assist them to change their business practices. Consistently weak tenants will need to be removed from the property at the first leasing opportunity. There is no point in carrying a weak tenant for a long period of time; they will become a drag on cash flow and customer interest.
- Analyse the tenant clusters for opportunity and future change. Divide your property up into a number of segments so that you can look at the tenant clusters and improve them. Some tenants work well when they are located close to others of a certain type. When you match your tenants in this way, you can improve sales dramatically.
- Assess the marketing of the property for effectiveness. Every shopping centre should have a marketing plan, and some of the marketing should be funded from the tenants. Every year the marketing to plan can be created for the local area based on customer interest and seasonal celebrations. Integrate the marketing of the property directly into the customers that frequent the shopping centre. Understand how the marketing can attract more sales and greater levels of traffic. Allow the promotion of the property to boost customer interest and the results for tenants. The tenants within the property should have a direct connection and commitment to the overall shopping centre promotional campaign. All of the tenants should be encouraged to be part of every specific campaign and seasonal promotion. Larger shopping centres today have marketing managers employed specifically for the purpose of managing and directing the campaigns. Each seasonal campaign can then be compared directly to the sales achieved by the tenants over that given time frame.
- Review the levels of market rental within the property. Compare those rental levels with other retail properties nearby. How does your property compare to the others? As part of that assessment take into account differences in property configuration, customer profile, customer numbers, the property age and design. You can learn a lot about retail property performance and rental enhancement by looking into the activities of other high quality properties and shopping centres nearby. You can then base your shopping center changes on local experiences and observations.
These factors will help you understand retail property performance and then establish your professional services successfully in retail management and leasing.
You can get more tips about Shopping Center Performance in our eCourse Snapshot right here.