|Tenant mix strategy in retail|
The process of leasing premises in a Retail Shopping Centre is quite special. That is because the shopping centre is a unique property type that relies heavily on the selection and performance of the tenants in the tenant mix.
The choice of anchor tenants in the property will also have a big impact on the smaller tenants in the property and the mix. This is where shopping centre leasing experts really do come into their own, and are high value to the landlords and property managers that they assist.
A well performing shopping centre will always require shaping and refining. That will involve the factors of lease management, vacancy minimisation, refurbishment plans, income optimisation, and business planning. The leasing process crosses over all of these issues.
Here are some tips for those of you that get involved with shopping centres and the leasing of them:
- Knowing your tenants is always really important to the future of the property. In retail property you have to get closer to your tenants than in any other property type. You almost need to know their business as much as they do. When they are succeeding you need to see it, and when they are failing you need to address it.
- Competing properties will always put pressure on your property. That being said, you can take the time to personally visit any competing properties on a regular basis. They can be a source of tenants for you and the variations of tenant mix will give you some ideas to work with in your property.
- Market rents will change in many ways. Gross rentals and net rentals will change from property to property. The variations will have a lot to do with the age of the property and the way in which it operates. The operating costs should be monitored in your property so you know just how your property compares to others locally. A shopping centre with higher operating costs can become unattractive to retail tenants considering a lease of vacant space.
- Incentives involved in leasing any vacant space will come and go based on the sentiment of the business community and the supply and demand for property locally. Are you across all the new retail property developments and when they will come into the market? Do you know what incentives they will provide to tenants to attract them to their property? How will that impact your property activity and tenant mix?
- Local businesses are the lifeblood of a retail property. You should get to know all relevant local business proprietors so you can tap into them when you need a new tenant for your property.
- Business types will vary in all shopping centers, but you should know what types of businesses are really attractive to your customers. When you have vacant space in your property it is not just a matter of finding a business or tenant to ‘fill the hole’.