The leasing of a shopping mall is a specific strategy relative to the location, the property type, the customer demographic, and the landlord. All factors come together to contribute towards a successful leasing outcome and tenancy mix.
It should be said that a successful leasing strategy will contribute towards the greater the benefit of the property. More customers will be encouraged to visit the property and purchase goods or services. On that basis retail leasing is quite special.
Here are some tips to help you with leasing a retail mall in today’s property market:
- Understand the vacancy factors that apply to the precinct or location. An excessive number of vacant tenancies will have an impact on market rentals and incentives. Check out the factors of supply and demand that apply within the region. Look for any new property developments that could have an impact on tenant movement and market rentals.
- Understand the types of incentives that can be offered by the landlord to attract tenants. Also understand the requirements of tenants when it comes to incentives in today’s market. Any vacancy that you have available for lease needs to be matched to the prevailing market conditions. That will include the rental types, and the incentives offered. The landlord needs to adjust to the prevailing market conditions. Get some details of comparable rentals and other properties nearby to help the landlord understand the packaging of their vacant tenancy.
- It should be said that a lease incentive cost should be recovered through the rental structure over the lease term. In other words, any money that is lost or offset in the incentive availability should be recovered by rental growth and escalation across the lease term. You can do this calculation through an assumption of market rentals and a discount cash flow calculation. The net present value of the deal can be compared across the duration of the lease.
- Successful leasing executives usually have a substantial database of retail tenants to contact. Any new leasing opportunity can be offered through the database to targeted tenants, anchor tenants, retail specialists, franchise groups, and other industry professionals. Any vacancy can be directly marketed to these groups through cold calling, direct contact, e-mail marketing, and direct mail.
- It is acceptable and normal to market a vacant tenancy through the generic media. That will involve newspaper advertising, and Internet listing. There are costs associated with that marketing activity and the landlord should contribute towards those costs.
- Most successful leasing transactions occur through the involvement of the leasing executive and direct marketing to the right people. I go back to the point that the database for each broker or agent is quite important to converting more commissions and listings.
It should be noted that any quality property in a good location will create good inbound enquiries. If you are selective with your property appointments and vacant tenancies, you will create more churn and activity in property leasing.