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Shopping Center Management Strategies that Really Work

Female figures with shopping bags uid 1460952
Shopping Center Management is largely about the customer.

The shopping centre management process is quite special in so many ways. That is why only certain brokers and agents take up the challenge of retail leasing, management, and sales. There are things to know and things to do. The benchmarks and the indicators are different in ‘retail’.

 

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

The goals and targets that are standard to the retail process are usually improving income, reducing vacancy factors, and keeping your good tenants for the long term. You could say that they are the major internal factors of property performance for a typical retail property or shopping centre today.

 

Know the Retail Factors of Influence

So what else do you need to think about? In addition to the nominated items, there are the ‘external factors’ that are harder to control. The external factors are typically shopper spending patterns, shop visits, frequency of shopping, and the amount of money spent on average per shopper. The marketing of the property will be part of the overall plan.

 

You can now see why a property performance plan is really important in any retail property today. So let’s put some of this together.

 

To keep all of these things in balance and on track there are a few business factors to implement in the running of a retail shopping centre. Here are some of them:

 

  1. Develop a business plan – A business plan in retail shopping centre performance is and should be all encompassing, generally covering all the issues of the daily running of the property and the involvement of tenants, customers, and investors. With a good business plan, you can make choices when it comes to rentals, tenant movement, renewals of leases, and property expenditure.
  2. Know your tenants and their priorities – Some tenants will be trading more successfully than others. Look for the differences to see what can be done with trading and sales. It is wise to look into gross profit and net profit margins with any tenancy group. The averages will tell you if a tenant is trading more successfully than others.
  3. Review all of your leases – The shop lease is the foundation of income recovery and growth over time; with all leases you must know how they work and what is involved in enforcing lease conditions when matters of change or risk occur. Each lease is different so you will need to build a profile of the tenant’s lease and the critical dates. Track the critical dates so you can take action early in any issue or problem.
  4. Establish a tenant retention plan – Differentiate your tenants so that you are protecting and encouraging the best tenants to stay in the property for the long term. They may need encouragement, so a tenant retention plan lets you set the rules to the process.
  5. Watch the sales and trading figures – You can watch these figures if you have the cooperation of the tenants in the property. You can gain and protect that cooperation through the terms of the lease. From those figures you create graphs that show moving annual turnover (MAT) and sales in merchandise or retail segments. Ideally the tenants in the property should have to produce turnover figures for their shop on a monthly basis. From that point it is easy to see the retail segments that are selling products well, and also the other segments that may be struggling. That is where the tenant placement and tenant mix then has a valuable strategy for the property. You can build clusters of tenants around the property so that customer interest is encouraged and sales are boosted between like or complementary tenants.
  6. Develop a marketing plan for the shopping centre – A plan of this type will allow for the retail sales seasons at different times of the year. There will also be themes for the local area and customer interest.
  7. Reduce vacancies with a tenant retention plan – The only reason you need vacancies in a property is when you are about to renovate and move tenants around. A few vacancies will give you the flexibility to change the property. When you look at the total tenant mix in a property, some tenants will be more important than others to the future of the asset. That is where the tenant mix plan comes in; you decide who you want to keep in the property and for what reason. You then build a rent a leasing plan around those factors.

 

So there are some good things that you can do here with retail shopping centre leasing. Understand the property in a comprehensive way. Then you can match the property strategically into the location and the customer demographic.

(N.B. these ideas are also sent out to regularly to our friends in Commercial Real Estate Online Snapshot to help amplify brokerage results…. Get your access here)

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Create a Blueprint for Commercial Real Estate Brokerage Results

plan of action in commercial real estate brokerage
Establish your commercial real estate brokerage plan of action.

 

In commercial real estate brokerage today it pays for every agent to have a definite plan of approach to bring together all of the many things that need to be controlled and actioned.  If you like it is a bit like having a blueprint to the business at a personal level.

I have put together some of the more important issues to get under control personally and to help you formulate your commercial real estate agent blueprint.  You can add to the list based on your property type and location:

  1. Define your property type – Some property types will be more relevant to your skills and or marketing confidence.  Understand what you are good at and focus on that property type; that will give you required confidence and then help you with listing conversions.
  2. Define your services – There are differences between sales, leasing, and property management.  Sales and leasing activity are strongly linked and one leasing deal can lead to a sales opportunity in the future; that is why I say that all agents should be able to jump from sales to leasing and back again quickly and effectively.  You will normally earn greater commissions from a typical sales deal than from a leasing deal (based on averages), and the people that you target as prospects in each group are different so understand those differences and track both types of people.  As the property market shifts from a buyers focus to a tenants focus, you can move with it.
  3. Set your marketing zone – Limit your zone of activity in your town or city to a number of properties and inside a precinct of main roads.  The focus inside a geographical area allows you to track property activity, rents, prices, time on market, and marketing strategies.  That focus will also help you a lot when it comes to connecting with clients in a property presentation.
  4. Define your clients – What does your ideal client look like?  Where are they located?  How are they involved in the property market?  What will they need from someone like you?  When you know the answers to these questions you have something significant to merge into your personal marketing efforts.  Your prospecting and cold calling will become a lot more centred on market segments.
  5. Research the property market – In each year there are changes, dips, troughs and peaks in market activity.  Some are predictable due to seasonal holidays and business calendars.  Your prospecting and listing efforts should have due regard to those seasonal changes.  Only take a property to the market when all targeted segments are active and looking for something to buy or lease.
  6. Determine key indicators to track – Some of the main indicators that can show you how you are performing as an agent are centred on prospecting, listings and negotiations.  Each week take those indicators such as commissions, listings, and presentations into account so you can see where things are developing.  Build on your strengths and fix your weaknesses.  That’s how you progress in our industry.
  7. Set up action processes – Every day a system of actions will take you forward.  It really matters what you do in a regular way.  Consistency will take you forward; random actions will not do much at all.
  8. Set your goals and targets in listings, commissions, and clients – These 3 categories of activity are most important.  They are simple numbers to track so start charting the progress you are making in each.  Ratios will soon be seen and that is when you can improve your skills in key business generation activities; start practicing!

So these numbers and categories of activities will show you where you are heading as an agent.  You can strive to improve in so many different ways in our industry; it’s a personal process.