Shopping Center Management Strategies that Really Work

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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)

Win More Commercial Property Leasing Clients and Listings This Way

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Connect with your Leasing Clients directly.


You can get some good commissions from leasing office vacancies in most towns and cities, and that is certainly the case if as the agent or broker you focus your efforts on quality buildings in the better locations.  That being said, you still have to win the listing or leasing appointment from the landlord.  They can be a bit allusive and selective when it comes to working with some agents.

This is a short article from our Agent Snapshot Newsletter.

So how do you attract and convert listings to lease?  It’s a competitive property market out there and many agents will claim to be the best agent to fill the property vacancy; the reality can be far from the truth, as generic marketing is just too common.  How will the landlord make the right choice?  Why are you the better agent to lease the vacancy?  Real answers and strategies are required to win the new business.

Create a Great Proposal for Landlords

Your leasing proposal will have a lot to do with winning the leasing opportunity; agent confidence and property knowledge will be the other big parts of the process.   Here are some other tips to help you convert more lease listings when pitching to landlords in this segment of the market:

  1. Tenant targets – Define the best segment of tenants for filling the property or vacancy as it exists today. Your tracking of inbound lease enquiries to your real estate office will help in providing enquiry facts and information.
  2. Supply and Demand – The current levels of space supply and demand will impact enquiry from tenants. Tell the landlord about the supply and demand factors locally, and explain the impact of newer properties on the existing properties.
  3. Rental Strategy – Tenants today expect rents to fall within the averages of industry expectations; they know what rents are doing locally within their location. Whilst the quality of the property and the premises will have something to do with setting the rent for the premises, the landlord should not be overly aggressive in the initial asking rents.  High rents create stale listings.
  4. Outgoings Recovery – The same strategy applies in identifying outgoings and how they will be recovered as part of lease occupancy. Rent and outgoings are set based on the property itself but comparisons should be applied across the property market locally.  Research the competing properties so you can confidently package the vacancy for the best levels of tenant enquiry.  Understand if your property vacancy has reasonable or high levels of outgoings.
  5. Incentives – Rarely can you attempt to lease a property without some incentive to attract tenants. The question is then, ‘What will be the best incentive for the landlord’s vacancy situation?’  You have a few choices, such as rent free, discounted rent, fitout, cash, and capital expenditure on tenant related enhancements such as technology.  It really doesn’t matter what type of incentive is chosen for the landlord, however the cost of the process should be recovered from the negotiated lease over the initial term.

From these simple things you can formulate some specific leasing recommendations for your landlord client.  Confidently show them the best way to attract the new tenant enquiry, and then demand an exclusive listing in exchange for your professional services.

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