Managing a shopping centre is a specialised process that needs a good property manager who understands the property type and what is required to optimised property performance for the tenants and the landlord.
Retail property is special when it comes to function and performance. It takes ongoing constant work to nurture a retail property to success. You cannot put tenants in the property and then let things just happen. A successful retail property is all about strategy and implementation.
Rents and leases are only a small part of the shopping centre management process. Consider this list.
- Rent optimisation for the landlord given the business plan for the property
- Realistic occupancy costs that do not put the tenant out of business
- Placement of the property in the local community and how it will serve the community
- Lease incentives to keep current tenants
- Tenant mix to help the property be successful
- Lease incentives to attract new tenants
- Tenant communication to keep occupancy up and conflict to a minimum
- Landlord reporting processes that keep the property information flowing and assist the decision process
- Rent review processes that stabilise growth of rent without creating a vacancy blowout
- Outgoings management to minimise expenditure whilst running the property to acceptable levels of operational performance
- Maintenance management to keep the property performing financially and physically
- Budgeting of the shopping centre income and expenditure so the targets for the property are reached
- Marketing the property to the community and the potential customer to optimise the trade and turnover for tenants
- Lease negotiations for vacant space
The list is not complete but shows you the most important elements of control in shopping centre management. A property manager should seek to keep these items under control at all times.
The tenant mix in a retail property is the main strategy that will help it be successful. When you choose the right tenants for the property and help them to trade through directed marketing of the property, you are heading down the right path to progress.
The tenant mix is a product of choice; a choice of what the property is to the community and how you will make it happen. The retail property may be any of the following:
- Local Strip Shopping of a small group of single shops
- Convenience Shopping with one anchor tenant
- Neighbourhood Centre with one or more anchor tenants
- District Centre with two or more anchor tenants and many small specialty retailers
- Regional Centre with three or more anchor tenants and a large number of small and medium size specialty retailers
When you know the customer base you serve, and you know why they will visit the property, then you will know the tenants that are required in the tenant mix to make the property successful. Your tenant mix and strategy can be built around these elements. From that point onwards it is a matter of attracting the customer to visit the property and spend money. That is where Shopping Centre marketing takes over.