With winter upon us and the inevitable slump in retail sales, property managers need to work with their tenants to ensure ongoing success and sustainability through tough economic times.
Paul says landlords can look to implement a refurbishment to their centres in order to attract feet through the door and boost sales for their tenants.This is according to Sean Paul, executive director of Spire Property Management, who says successful property managers would be well advised to enter into a strategic partnership with their tenants.
“A retail centre is as reliant on its tenants for its ongoing success as the tenants are reliant on the centre for their business; they have a mutually vested interest in working together.”
He says property managers need to be in constant contact with their tenants to assess how they are weathering a retail slump and must also ensure that they have accurate turnover figures from each tenant to assess their performance.
“Property managers act as a conduit between landlords and tenants; remaining close to the tenants at all times, knowing what is going on in their businesses and understanding their problems,” he says.
Paul says with a vacancy and having to source a new tenant comes the costs of increased commission payable to property brokers, as well as installation costs. An effective discussion with the existing tenants, listening to their wants and needs, as well as accommodating those where possible, is a far more cost effective and prudent approach.
“However, if a property manager recognises that a business is not able to be successful within that specific centre, then they should be proactive in assisting the tenant to find a replacement for their premises.”
Paul says it is not in anyone’s interest to hold a tenant to their lease when they are no longer able to meet its requirements.
Landlords can look to implement a refurbishment to their centres in order to attract feet through the door and boost sales for their tenants.
“Some key renovations that landlords can look to undertake include assessing the building both internally and externally, and they must relook at the target market that they are trying to appeal to and take measures to ensure that their building is competitive within the market and within the geographic node that the building exists.”
Landlords can also assist with improving tenant visibility through tenant reshuffles and location grouping of similar tenant sectors, says Paul.
He says with rising electricity tariffs, one of the most significant refurbishments that landlords can undertake are those that reduce electricity consumption, and therefore a reduction in the cost of occupancy.
The obvious place to start is energy management, where simple changes such as converting to LED lighting or utilising other energy efficient light bulbs can have an immediate impact on operating costs.
“There are many things that can be done to make a building more appealing and competitive within the market, and this will benefit the tenants, which will mean rental agreements are met, vacancies remain low and the overall value of the building is maintained,” says Paul.
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