When you manage or lease a retail property, it is important to keep the tenants and the property successful. The key to the process is the tenant mix. If you get the tenant mix wrong, people will not come to the property; over time the vacancy factor rises and the rents become unstable. That is the beginning of an income disaster for the property landlord.
So it is not just a matter of having the right tenants in a property; there are some other factors to consider such as:
- Placement of tenants in and around the property
- The time or hours that the property trades
- The number of tenants that are in the property how
- The anchor tenant and their intentions for future occupancy
- The reason shoppers come to the property
- Vacancy factors now and known to be happening later on
- Clustering of tenants into a pattern that works towards a better shopping experience
Let’s look at the last item on the list for the moment. Clustering is essentially the process of placing tenants near to each other if it is considered that the customers that shop in those tenancies could purchase from other similar or complementary tenants nearby.
When a customer is buying something, they are inclined to purchase again relatively soon. Having tenants near to each other allows that trend to occur. For that reason you can create a ‘cluster’. Here is an example of a successful cluster:
- Ladies fashion
- Ladies shoes
- Ladies sportswear
All of these shops would work quite well in the same zone or cluster. The cluster could be placed adjacent to the anchor department store tenant.
When you get a cluster just right, you can look to introduce alternative tenants into the zone that may encourage shoppers to stay in the common area around the cluster and shop further. That is where you find coffee shops and cake shops may work. A successful tenant mix is a planned process.
So a good retail leasing executive knows how to make clusters work in a retail property. Everything has to fit into the requirements of the shopper and the known changes to the demographic of the region.
A tenancy mix can be shaped by utilising the expiration of leases and known vacancy factors in the property. To the customer visiting the property, they just want to have a good time and get what they want in a convenient way. The moment a retail property does not do that anymore, the commencement of rent and vacancy issues will start. Plan your retail property for today, but always look ahead and make wise decisions regards tenants in the tenant mix.