Tenant Mix diagnosis

Tenant Rights - Tenant Mix diagnosis

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The most tasteless problem in tenant mix strategy is lack of focus and relevance. As a tasteless rule, identify your tenancy strengths and build around them and on them. To do this you need to respect and understand what the shop and customer needs.

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Tenant Rights

Shopping Centres

Tenancy mix becomes very foremost in retail premises of many tenants; that will be shopping centres of all sizes and types. A asset that does not reach the needs or interest of a customer, is going to fail.

A customer wants to be well served in their shopping needs and feel good about it when they visit your property. Visit the competition shopping centre properties around to assess them to that which you are currently leasing. You must understand the other properties that you are competing against together with the strengths and weaknesses that they experience.

In reviewing these other properties you look at things such as:

o The entry ways

o The car parks

o The flow of people

o The places where citizen stop and congregate

o The larger anchor tenants type and location

o Standards of signage

o Lighting internally

o transport to and from the property

o The tenants that seem more victorious than others

o The tenants that seem to feed customers off each other

o The estimate of time that citizen spend at the shopping centre

o The busier days for customer shopping

When finding at these other properties it is wise to take selective photos of the things that may be relevant to assess to your property. You can analyse the photos later and revisit your ideas. Note that some asset owners and managers will be sensitive to you taking photos around their property. Discretion is the rule here.

Seek to develop your Rent

The only way you can underpin your rental and develop it is through a good tenancy mix. Given that the leases in premises are for lengthy periods of time, any mistake with tenancy mix will exist for years and frustrate the rent, the customer, the tenant, and the property. Hence you must choose tenants well and then place them with a lease that is in harmony with surrounding premises.

As parts of that process look at these issues in balance so that any concerns of tenant mix occupancy are removed and nullified. Understand:

1. Earnings exposure at expiry

2. Selection exercise potentials

3. Exclusive or Permitted uses in the leases

4. Vacancy effects on other existing tenants

5. Relationship construction or conflict inherent between sitting tenant types

6. Know why tenants like or dislike your property

7. Know how your existing tenants maximise their enterprise operations at your property

If you effect these steps, you will be armed with the strategy you need to put you in the 'driver's seat' as you implement a new leasing campaign and tenancy mix for your managed property. You will know the tenant you want and you will have the selling points to attract them.

Create a asset enterprise Plan

The larger the property, the more there is a need to have a enterprise plan to consolidate the operation of the property. The enterprise plan will have ramifications on the create of the tenancy mix.

The enterprise plan will set directions for the asset given known demographics of the surrounding citizen and customers. enterprise plans are very useful with retail properties where the success of the tenant is driven from the customer's acceptance and use of the property.

The enterprise plan for a asset is designed to set important standards and targets within:

o choices of tenant

o ideal lease terms

o expiry profiles

o targeted rentals

o product contribution for customers

o levels of rental relevant to rent reviews

As the agent working with the client to heighten the tenancy mix requirements, you can adopt this enterprise plan arrival with adjustments for the suitability of tenants and the size of the property.

Review the Site

With retail asset planning and tenancy mix a estimate of site questions need to be addressed. They are:

1. Is the way to the asset good or hindered?

2. Is way inherent from all directions or is there a bodily barrier?

3. Is road exposure of the asset of good quality and can the signage be in fact seen or erected?

4. Is the asset easy to locate or find?

5. Is public transport available and how does it work?

6. What is the identity of the asset and can it be clearly seen from the road? Is it modern and adequate?

7. Does the parking around the asset sustain all the Customers and Tenants well? Does it need re-design or functional changes?

8. What customer services exist? Are they sufficient and modern? (Parking, Toilets, Malls, Seating etc.)

9. Is the internal asset layout 'Customer' friendly? Can Customers in fact understand where they are and can they shop in comfort?

10. Is the tenant signage conforming to good create (or Centre standard) rules? Is it well maintained?

11. Are 'sight lines' open and un-cluttered to the retailers shops?

12. Are more customer services needed?

All of these factors sway every retail property. Once you understand them you can lease the vacancies and mix the tenants more effectively internally.

Use them in your inspection strategy on any retail asset pathology when you consider where tenants can be placed and realistically placed for optimal rent returns.

Clustering

The tenancy mix thereby creates tremendous success in a property. 'Clustering' is a process of conference tenants into groups. The perfecting of the clustering of tenants for each asset is as foremost as finding the right tenants.

Clustering is conference tenants of the same type into the same location. The process is productive and has been proven to create higher levels of sales for most tenants in the cluster. You can have clusters in all retail groups such as fashion, food, men's wear, ladies wear, toys, etc

When you have clusters of tenants, the customer perception is that the asset offers greater range and therefore will have the item that the customer seeks. The customer is therefore more likely to visit the asset and gain goods.

Clearly we can now see that 2 key issues in tenancy mix are:

1. Adding victorious tenancies which suit the demands of the community and the profile of the property, and

2. Clustering tenancies in groups so that the localized groups encourage more customer interaction and spending.

The key to clustering tenants is simple. You mass tenants by similarities, and you avoid placing tenants into clusters if they're contribution product that is radically different than those around them.

Early in shopping centre evolution, it was originally notion desirable to split tenants of similar contribution into random locations which do not clash with each other. The customer then had to traverse the whole asset to buy goods. The leasing managers felt that this would create more exposure to all tenants and therefore more sales. Unfortunately this is incorrect.

This strategy has been found to be counterproductive as customers see the long trip or walking length between similar shops as being annoying. Today we know that customers prefer ease of shop way and ease of shopping experience. This does not involve random tenant placement to frustrate the shopping experience.

So the golden rule here is to place like with like and complementary tenants near each other. In doing this the customers will sustain your shopping centre more effectively.

Creating Tenancy Flux with Timelines

A stagnant asset is one in which convert is diminutive or not seen to be happening. The customer perceives this and over time will move the bulk of their shopping needs to an additional one more active and changing property.

From this notice we can now see the need for a flux or convert factor to allow the asset to move with the demands of the customer.

In any victorious and active shopping centre, it is uncostly to assume that up to 20 to 25% of the tenancy mix will be continually shaped and repositioned while each duration of 12 months.

To allow this to occur, it is important to have lease and occupancy documents which allow staggered expiry dates. The staggered expiry profile then creates an element of planning and repositioning of tenancies as the asset needs. This is occasion supervision at its best and a great strategy for the time to come of the asset for the landlord.

Options Can Frustrate

This strategy of flux can be frustrated by the giving of options to tenants as part of the first leasing process. By their very nature, the options given in a lease are at the discretion of the tenants and therefore remove flux and convert occasion from the landlord until the lease is to expire. It can be said that options in a leasing process are not good for landlords and tenancy mix.

Options should only be given as a last resort in a leasing process.

Tenants view options as important to their time to come and will regularly push the landlord to grant an option(s). As a leasing strategist and specialist, you will need to balance and minimise this problem for the landlord when it arises.

There are ways of lessening the impact of an Selection such as:

1. No Selection at all
2. Shorter Selection terms
3. Less Selection terms
4. Short Selection exercise windows in the lease
5. Rent divulge escalations that offset the inconvenience that options create

The desirable alternative is to not give options at all to tenants where that Selection could stifle tenant convert and mix for the property. That means that desirably every lease is for a particular term. New leases with existing tenants are therefore then negotiated based on their merit and relevance to the property.

Be true and aware of legislation that can sway this or set rules that you must bond to. For example in many locations retail Lease Legislation will need to be understood and respected as it could set guidelines and rules for the leasing process and options for tenants.

Tenant proximity Profile

It is a poor supervision and leasing process to allow a estimate of tenant spaces to expire in close proximity to each other at around about the same time. The leases that need to co-ordinate on expiry dates are only those that may be subject to similar relocation or refurbishment activity. Strategy is the rule here. Planning ahead is the key to setting expiry dates that keep the asset in balance for the client and the needs of the customer.

Tenant Volatility

Some tenants in shopping centres are more volatile than others. This is particularly the case with food and beverage tenants. Volatility must be understood and well controlled as the tenant pressures change. Volatility means that some of the tenants you place may be more or less victorious when compared to others on the property.

There are essentially two types of volatile food tenants, firstly fine dining, which is a lifestyle and entertainment contribution often promoted by cuisine or concept. The second is the more tasteless fast food tenants to satisfy spontaneous customer food demand.

Fast food tenancies and their success tend to run in cycles and the contribution of the relative food. You have to anticipate trend changes in customer demand for fast food and the placement of the tenant in fast food courts. In most cases, customers demand choice, value, and quality in the food contribution above all else. Interestingly the theme of the food is of diminutive point to the buy decision of customers. quality wins every time when it comes to a food connected tenant.

Given these rules applying to food tenants, it can be seen that close supervision and interaction with the tenants is important for unavoidable occupancy outcomes.

Size Matters

Generally speaking we find that the larger the tenancy in area, the lower the rental per square metre. This rental fact is sometimes partially offset by creating precincts of tenants in clusters through the shopping centre.

The clusters of like and similar tenants can hold up the rent levels more successfully than shops of similar type being spread widely apart across the property.

Identifying the ideal size of a tenancy and its placement is important. There is no point manufacture a tenancy overly large for the contribution and product that it sells.

To get a feel of the spoton ideal space ratio, it is best to visit other properties of similar type or location, in your precinct. With some institution you can swiftly guess the size of tenancies therein, and then decide if extra space is needed by enterprise type to successfully trade. You can decide if the actual space used is accepted for the product being sold.

Remember the Future

When selecting the right tenancy for the area of vacant space, you need to consider either the tenant can afford the required rental and the estimated escalations in the lease through the rent divulge profile on an ongoing basis.

All of this is strategic and important to the time to come of the property. A tenant should not be placed in a location based on today's offering, but rather in the balance of today against the time to come of the asset and its changes.

Bundle connected Tenants

When clustering tenants as mentioned earlier, you commonly locate and mass tenants with the same retail contribution so that they can furnish the customer with a broad Selection of product e.g. Ladies fashion.

You can then take this added and bundle connected tenants together to offer complimentary products. For example this could be a sportswear shop, and a golf shop in the same area of your shopping centre.

Sensible bundling of tenancies will thereby heighten the customer experience and encourage added purchasing of product. The more victorious you are at this process; you will heighten the rental profile for the construction and the visitations of customers to the shopping centre. Spending money in a retail shopping centre only occurs when the customer feels good about the contribution and the location of the shop. The better this balance is created in the eyes of the customer, the better the sales for the tenant. That will then give you better rent.

Signage

The easiest way to position a tenant for trade is to create great signage. The foremost thing to remember in balance with all other tenants in the same location, is to choose signage which is complimentary and of similar size and dimensions to the other tenants nearby.

Sensible signage policy and architectural control of that signage between tenancies will consolidate the customer experience and optical motion of the shopping centre.

In saying this regards the signage, the uniqueness of the retail product contribution shall also be respected so that the customer can clearly divulge to the product being sold and remember the contribution for the future. A case in point would be the need to ensure that brand name retailers use signage that is in retention with their identity (e.g. McDonalds).

It is not accepted to exercise architectural controls that exceed sensible display of the tenants offering. For example it would be inappropriate to cross the boundaries of trademark and signage for franchise tenants that require that image to identify themselves. In most cases, the franchise tenant should be allowed to clearly promote their franchise identity. After all that is the guess you have them in the property.

Landlords must be flexible, and tenants must be flexible. A shopping centre is not a static environment. Ongoing convert and presentational issues across all tenancies and in balance with the clusters, and bundles of tenancies is foremost to verbalize high levels of rental and a great tenancy mix.

You can read more on this at our special website for Tenant Mix Strategy here www.tenant-mix-analysis.com

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