When you lease a retail property or shopping centre, understanding the retail tenant’s needs will help you significantly when you try to close a deal or lease. Retail tenants are quite special when it comes to occupancy; you need to know a lot more about them that the average office or industrial tenant.
Here are some ideas to help you work with retail tenants and fill vacant tenancies in your property:
- They will have an ideal shopper demographic for their goods and services. What or who is that shopper and do you have plenty of them in your local area? Is that demographic changing in any way?
- You may find that the retail tenancy is part of a franchise group structure. That can be a good thing because the tenant coming into the premises will have an established business plan and retail support.
- What shop size will the retailer require? Will that shop need to be on a corner point, internal to the shopping centre, or on a higher foot traffic zone? Some retailers have to be in particular areas to make their expected sales. That being said, a successful retailer will bring other shoppers to the area and help boost sales for tenancies nearby.
- What improvements will the tenant require in the shop? Some of those improvements could be a landlord expense to get the tenant to commit to a lease.
- Visit some other shopping centres in the local area so you can understand just how successful some tenants and brands are in trading and in established tenancy mixes. Look for the synergies between tenant types and locations.
- Each established and experienced retailer is likely to have a series of lease requirements that they will negotiate with the landlord for each property. Some of those terms and conditions will be non-negotiable as they have an impact on the way the tenant does its business. Get a copy of the standard lease conditions that the retailer believes are critical to their business.
- The common areas within a retail property may add to the sale potential for some tenants. A food court is a good example of this synergy and need. Visit some other food courts or similar areas and understand what works and why. If a customer can spend more enjoyable time in a property, they will likely spend more money.
- Presentational factors in a retail property are more important than in any other property type. Retailers know when the landlord is cutting corners on maintenance to save some money. Eventually the poor property presentation will impact the customers and shoppers coming to the property.
- Transport corridors and roadways will have an impact on the way people get to a retail property. If the process of access is too hard, the shopping centre can lose trade fast.
- Public transport to or near your property will be a great advantage. How do people get to your property now and is it efficient? Be aware of intended changes to roadways and highways; one small roadway change can impact your property in a big way.
- Car parking is always important to retail trade and shopping centre success. In some locations that car parking should be under cover and convenient. How big is your car park and is it convenient for users or shoppers to the property?
As mentioned earlier, and as you can see from the information above, the retail property and shopping centre is a really special property in function and operation. Lease the property carefully and get to know all the retail tenants very well.