How to Inspect a Retail Shopping Centre
As a local real estate agent specializing in retail property, it pays to concentrate your efforts within the market segment and monitor the activities and successes of all retail properties locally. This monitoring process involves local market assessment and regular property inspections.
The property market knowledge that you can gain from this process will help you with future leasing opportunities and sales. Retail property is of a type that needs special agent support and focus; inexperienced agents are of little value to the sale or lease of retail property.
So the properties you inspect should be broken up into three categories:
The properties that you manage now and can gain access to and get information from without any difficulty.
The properties that you do not manage or lease and that are competitive properties to your sales, lease, or management portfolio.
The new properties coming on to the market through any new retail shopping centre development.
Each of these three retail categories will give you trends to capture and monitor. Most particularly you should be gathering all the facts and information around rentals, lease types, tenancy mix strategies, tenant sales turnover, and anchor tenants, occupancy costs, and vacancy factors. This retail market knowledge is invaluable when helping your clients.
It can easily be said that these factors make the retail property industry quite special. That is why many real estate agents choose to specialize only within the retail sector. It is very difficult for an inexperienced agent to professionally service the managing, leasing, and sale of any retail property.
To inspect a retail property given all of the above information, it is wise to use some form of checklist covering all the required issues. Here are some of the key items to place within the checklist you can use:
The size of the subject property in gross lettable area should be identified. Plans of the property will also help here.
The number of retail properties in your local property precinct together with their gross lettable areas should be tallied so you can understand the gross vacancy factor of any given point in time.
The vacancy factors in each property together with the expected lease expiries coming up will allow you to address leasing opportunities. You will also be able to move tenants from property to property in specialised lease negotiations.
The details of market rentals will always be valuable across the property segment. Negotiating market rentals with new tenants and sitting tenants will be different and should be supported by up to date rental trends and evidence.
The outgoings or expenditure costs for each retail property will be valuable information. You can then see if the particular property is operating within the averages of industry expenditure trends. A property with high outgoings will always be difficult to lease.
The customer numbers and sales details for retail tenants for the shopping centre are usually held confidentially by the centre manager or landlord. This means that you will only be able to get accurate information for and from the properties that you manage. The information is however very valuable and should be captured wherever possible.
When you inspect a property, look at the traffic flow factors of customers through the property. The traffic flow will have impact on tenancy mix and placement, together with rentals and property design.
Given the above factors, it is easy to see why retail property is quite a specialised segment of the property market. Should you choose to work with in this part of the industry, take the time to fully understand these and other retail property indicators.