In retail shopping centre leasing, every tenant shop and every property vacancy should be leased to a plan. That plan is your tenant mix strategy. All good retail properties and shopping centres all have a base plan of this nature. They know what tenant they want in what location, and over the years they shape the property performance and rental return in this way. It is called tenant optimisation and forms part of the ‘tenant retention plan’ for the property.
The tenant mix plan should be part of the retail property business plan and that should be updated annually. Plans of this nature help you steer the property performance for the landlord. A plan of this type is even more important today as some retailers suffer the pressures of the internet and a shift in sales to online.
A good tenant mix formula for a retail property will involve a number of key factors that underpin the landlords leasing decisions. Here are some tips to help you structure a good tenant plan for your retail property today.
- Understand your base property and its position in the eyes of the existing customers. Why do they come to the property today? What would they like to see changed in the property and why? How often do they come to the property now and on what days of the week? Questions like this will help you formulate a leasing plan.
- Shoppers want convenience and a correct retail offering to suit their buying needs. Convenience means many things when it comes to a retail property however one thing that is high on the agenda for most shopping centres is the car park. Shoppers need to feel safe and comfortable in using the car park. It is perhaps the one main thing that can influence future sales and trade for the tenants. Make your car park easy to use and access. That will include the entrance and exit points to and from the car park and into the surrounding main roads.
- You are likely to have an anchor tenant in your property. Perhaps you have more than one anchor tenant. Stay close to these tenants as they will have a good feel for customer buying patterns and current levels of sales. They will bring customers to the property, and they should help the trading levels of the specialty tenants in the property.
- Look at your entrance ways to the property and the shopping mall. What tenants do you have at the entrance ways and are they the right tenants for those locations? Generally speaking you should have smaller tenants at the entrances to create impulse buying.
- Some entrances to the property will be more active than others. Look at the relationships to public transport drop off points and taxis outside those entrance ways. The entrance points to the property create customer movement patterns and places where people will congregate.
- Ensure that the common areas in the property provide comfort and satisfy the needs of the customers and shoppers. Do everything you can to get the customer to spend longer times in the property for shopping and browsing.
To review your property tenant mix, you really should adjust your vision to that of the customer. Take a trip to the property at various times of the week and experience the retail shopping centre from the customer perspective.
Make notes of the things that you see and how the property functions for the tenants and the customers on each day of the week. What are the pressure times when it comes to property use and shopper visits?