Retail Property – Tenant Mix Analysis and Tactics

When you manage or lease Retail Property, the tenant mix strategy you adopt will make or break the success of the property. In many ways, the tenant mix analysis should become part of your property business plan each and every year. In that way you can make planned changes respect lease occupancy, tenant locations, and…

When you manage or lease Retail Property, the tenant mix strategy you adopt will make or break the success of the property. In many ways, the tenant mix analysis should become part of your property business plan each and every year. In that way you can make planned changes respect lease occupancy, tenant locations, and lease durations.

When it comes to leasing Retail Property, the lease and its position within the tenant mix should be well considered before negotiations start with the incoming tenant. Preparation is the key.

The success of a Retail Property and its tenant mix is ​​not a product of luck. It takes into account some key considerations such as the following issues:

  • The choice of anchor tenant to suit the local area, the property, and the community.
  • The lease terms for the anchor tenant to give the property a real identity for a sustained period of time
  • The diversity and location of specialty tenders to suit the customer base for the property
  • The size of a property and the way it is used by both tenants and landlord
  • The configuration and availability of the car park to the shopping area so it provides shopping comfort and convenience
  • The lease terms and conditions that protect the landlord cash flow and allow the tenants to successfully operate as a business
  • The lease terms and conditions that reflect stable occupancy and do not create excessive patches of vacancy or lease expire within the property at the same time
  • The design and the location of common areas within the property to extend the convenience factor for the shoppers and their duration of shopping.
  • The services and amenities that assist the customers and the tenants to enjoy the property and access its features.
  • The clustering of similar tenants within small groups inside the property. This provides procurement shopping and allows like related tenants to share individual shoppers.

So the tenant mix for a property is a key decision in the overall lease strategy. The property manager or the leasing manager should make tenancy mix and analysis a key part of the property business plan before each financial year, and an extended part of that planning process for a period of five years. That is the way it is handled within larger shopping centers. The selection of tenant and their placement within the tenancy mix is ​​not a random event.

When the tenant mix is ​​correctly optimized, it underpins the rental paid for individual tenancies and strengthens the performance of the property for the long term. Both the landlord and the tenant reap the benefits of tenant optimized property performance.