|Get Your Plans in Place in Retail Property Management|
Today we find that the average shopping centre is under some pressure in sales and tenant stability. That being said, every landlord and centre manager should take care when planning their activities for the property each year. Here are some tips from our Newsletter for Retail Property Agents and Center Managers.
To optimise the performance of the retail property or shopping centre, you need a business plan and marketing plan; they work together and are staged control tools for the future of the property. After they have been created, they are updated each year with new financial activity and lease strategies. The plans are then tracked each month and then modified every 3 months if trends and changes indicate that new issues have arisen.
Here are some factors that could be incorporated into the Business plan process for the property:
The Retail Property Business Plan
- The locational factors of the property including the community and its predicted changes should be identified and qualified. When this is accurately done, you know what threats and opportunities exist in the local area in the coming years. Understand just where the competition is coming from when it comes to customer sales for your tenants.
- Define the tenant mix that suits the shoppers and customers. Leasing a retail property is a balance of landlord rent requirements and customer needs. In the middle of all those considerations we have the tenants that can make the property work as an investment. Exactly what tenants do you need in the property and what advantages will they give you?
- Will the property need to change over the years, and if so in what way? In older properties you will have issues of renovation and refurbishment to consider in the leasing process to new tenants. You will need clauses in each lease to allow you to move tenants around at particular times and when the property moves into its upgrade phase.
- Look at the balance of tenants coming to the property (or in the property now), to ascertain just how they match and mix against each other in the various tenancy locations. This is where the tenant mix strategy comes into play.
- Some tenants will need to be clustered in the property near to each other so they can feed of each other’s sales. Customers buying goods from one shop could very well extend their shopping if you have a like type or complementary shop nearby.
- Profile your income for the property currently based on the trends of market rental in the local area and with properties of similar type. You will need a property valuer to do this for you. When you have an accurate assessment of the current rent, you can make predictions about the rental levels that you should target in the property, and at different locations around it during the year. At times of rent review and options to renew you will then know what your targets are.
- Review the expenditure history for the property and then set some benchmarks for the coming year based on expected escalations in prices and running costs for the property. Capital items should be removed from the calculation.
This list can be added to when it comes to complex properties and merging the plans of the landlord for the property into its cash flow needs.
Need some more ideas for Retail Property and Center Management? Join our Newsletter here.