In a retail property today, the tenant mix is likely to be the ‘make or break’ factor in property performance. A good tenant mix will help the property thrive and underpin the rentals for the property and the landlord.
So how can you get to know what works? It is easy to see examples of tenant mix profiles in other properties and then compare them to your property. Look for the situations that work and those that do not.
Clustering is one factor worth examining in other properties to see how they may handle the cluster concepts. Whilst you are there, look at their vacancy factors and just how they work with them.
Competing properties will also have factors of tenant loss and relocation; that is a good source of new tenants for your property.
Here are some other tips that can help you in your tenant mix design and property business plan.
- Understand the local demographic of customers before you do anything else. Are there changes in the local area that will impact the customer base now or in the next couple of years? If so the factors will need to be in your business plan for the property. The business plan should be done every 12 months and reviewed quarterly.
- Undertake a customer survey in your property and in the surrounding area. You will learn so many key things from that process. Why do people shop in your property? What would they like to see changed and why? How often do people come to your property and on what days?
- Check out the existing competing properties in the local area. In this way you will see the differences that their customers see. Pay particular attention to the access and convenience factors with those properties before you look at the tenant mix internally. If there is one thing that frustrates many shoppers it is access and convenience. Can your retail property improve on anything that the other properties are struggling with?
- The maintenance of your property will be driven by property layout, customer visits, and building age. Retail property is one of the most costly property types to maintain. That is why outgoings in retail are so high.
- The anchor tenant or tenants in your property are likely to be established on a long lease(s) with appropriate rent reviews. The anchor tenant profile will help you lease the specialty tenant premises in the property. Create sound relations with your anchor tenants so the customer targets that they have integrate to the overall marketing plan for the property overall and the general tenant mix.
A great retail property performance is a constantly moving target. Over time you will be modifying your plans and strategies when new things are seen or the local area changes. Get involved with the local retail businesses and shopping community; you will soon know what they are looking for.