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Embrace Retail Tenant Mix Analysis in Shopping Centre Leasing Today

woman shopping for groceries
Retail tenant mix analysis is a special skill for specialised property agents.

A retail property is quite special when it comes to tenant mix.  In many ways the tenant mix will shape the future of the property.  The success of the market rent for the property will come from the relevance and stability of the tenant profiles and the anchor tenants in the property.  Are you an expert in all of these things?

In saying all of this, if you are a retail property manager, shopping centre manager, or perhaps a retail leasing specialist, you really should spend time on understanding the factors that strengthen a tenant mix profile in a retail property.  In this way you bring better value and knowledge to your clients and property owners.

Retail property leasing and performance is really the pinnacle of skill and speciality in investment property today.  Most of us that know the retail shopping centre industry well, find retail property very interesting and challenging.

A successful retail property is a balance of many things; as a retail specialist, you need to know what those things are and how to work with them.  Good clients pay well for top retail property agents to help them.

Here are some of the important factors that come into a tenant mix plan and tenant retention plan for a retail property today.

  1. From the outset you must know what your customers want and how the property interacts with the local community.  For this reason it pays to survey your customer base and find out what they think of the property and its tenant offering.
  2. Talk to the tenants in the retail property.  They will have factors that they can share regards shopper requirements and buying patterns.  Also note that some tenants will have different ‘stories’ to tell in this regard given their retail offering and position in the property layout.
  3. Work closely with your anchor tenants so you understand just what they are seeing in shopper buying patterns and movement.  Integrate the anchor tenant to the specialty tenants in the property to optimise mutual trading advantages.
  4. Do you have common areas in the property where people and shoppers are encouraged to congregate and spend time?  Do you have a food court in your common area layout that will help the shopper retention factors in the property?
  5. Look at the lease terms and conditions for all the tenants.  As part of the tenant retention plan it pays to negotiate any lease renewals early so you know just how much vacant space is coming up for renewal; then you can plan how you want to use it.
  6. Expansion and contraction factors in a retail property are always happening.  Some tenants will need more or less space; that is why you should create and how you should manage your tenant retention plan.  Look after the good tenants in the property and manage the poor tenants out of the property at the end of their lease term.  Over time the market rental can be underpinned by better tenants working in cooperation with each other.
  7. Should you give tenants any options for a further term in a lease negotiation?  Not necessarily is the right answer.  The final decision on lease options will be based on the overall tenant mix, the property renovation requirements, and the landlord’s investment plans.  Most large shopping centre owners do not like giving options for a further lease term given that it takes away a lot of control that they would otherwise have in a shop location and its position in the tenant mix.

Some of these factors can give you real control on the future of a retail property.  Formulate your tenant plan and put it into motion.  Over time this will help your retail property perform more effectively as the retail trading environment and economy shifts and changes.

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Commercial Property Leasing Agents – Strategies for Renewing Tenants Leases Today

Vacant office premises
Tenant Retention Plans will help your clients with property performance.

When it comes to commercial property management and leasing today, the factors of tenancy vacancy are something that you would normally want to avoid.  The basic object of property performance is to stabilize and grow the income base from the tenancy mix.  When businesses and tenants are under pressure, you need some real strategies to renew leases early for all the good tenants within your property.  Here are some ideas from our Newsletter for Commercial Agents.

Tenant Retention Plans

This can simply be called the development of a tenant retention plan.  It is a service that can be provided by the commercial property agent to the landlords that they act for.  The fees to be achieved from renewing a lease with the sitting tenant are usually less than those which you would get from a new tenant coming to the property.  However, the fees are contained and readily available for the proactive agents offering tenant retention services.

So here are some strategies available for optimizing the current tenancy mix and renewing existing leases.

  1. Keep close eyes on all leases coming up for expiry or option inside of the next two years.  Understand the high priority leases that will expose the landlord’s cash flow to instability.  All of these identified leases should be tagged for early renewal and negotiation.  It is necessary to work with the landlord and the tenants regard future occupancy needs.  There may also be other factors such as property refurbishment to consider as part of the lease renewal.
  2. If your property involves anchor tenants, these leases need to be protected at all costs.  They are generally leases for very long lease terms over sizeable space; however any pending expiry and loss of the anchor tenant may totally destabilize the property and all smaller tenants.  Anchor tenants are very special when it comes to maintaining property performance.
  3. The clustering of tenants within the tenancy mix involves considerations of tenancy size, tenancy offering, and businesses of similar type.  The clustering of tenants can occur in office or retail property and will be based on the expectations of the business community and the local customers.  The successful clustering of tenants will improve the business identity and vibrancy of the property.  The net result is improving rental.
  4. Some of your tenants at lease renewal time will require a modified occupancy including more or less space.  This may require negotiations with adjacent tenancies or total relocation to other areas within the building.  Either way the process works as long as you are working well in advance with all the relative tenancies and their occupancy needs.

A top performing property is the result of careful lease management strategies applied in balance with sensible property financial management.  When it comes to the times of a tougher property market, these factors are highly important.

Need some more Commercial Real Estate Agency ideas?  You can get our Newsletter here or check out our website here.