Retail Properties and particularly shopping centres are a complex equation of balance between tenants, customers, community, and property performance.
Every one of these elements needs to support the other so that the retail trade and levels of sale is underpinned.
Landlords that overlook the necessity to generate trade within the property are setting the scene for financial disaster.
The tenants are responsible for their own individual trade, but the landlord is responsible for the overall property profile and interaction with the greater community.
Every successful retail property is backed by a landlord that is proactive in the marketing process of the property.
That marketing of the property is directed into the core customer base of the surrounding community.
The core customer base is fully understood by all and the property is matched to that customer base on a seasonal basis.
The definition of the core customer within a retail property is that customer which produces 80% of the trade.
Careful planning of tenancy mix and lease expiry profiles is fundamental to the success of a property.
In larger shopping centres, it is common for the landlord to avoid giving lease options to tenancies.
This preserves the flexibility that the landlord requires for moving and replacing tenancies as the property grows or changes within the community.
It should be noted that the provisions of some retail shopping legislation will dictate that options need to be provided.
Make sure that you understand the retail shopping legislation in your location before undertaking any retail shop leasing.
Tenant Needs Analysis So exactly what sort of tenants do you require? To answer the question and understand the market you need to do a 'needs analysis'.
The only way to handle this is through a probing 'needs' analysis of regional demographics, customer behaviour, competition property, and local economic trends.
This will reveal the extent of leasing opportunities and threats in your properties region.
From this you can then set the new directions of tenancy mix to take your retail property forward.
Your 'needs' analysis, coupled with an evaluation of your property's strengths and weaknesses, is the first step in developing a tenancy mix strategy to fill your vacant areas.
Vacant areas in a property must be minimised and managed.
You only want vacancies when you are planning a refurbishment or renovation.
The strengths and weaknesses of a property can come from a variety of sources such as customers, tenants, building design, shopping habits, and the economic climate.
Know what these elements bring you and plan through it.
The best retail properties are managed within a business plan process which is updated on an annual basis.
The tenancy mix profile is part of the business plan as is the other key performance issues such as income management, expenditure management, budget performance, capital expenditure, tenant movement, marketing strategies, and lease expiry profiles.
Think of your retail property as a strategic process and major investment project.
On that basis you will take the required time to create the focus on performance and tenancy mix.