Shopping Centre Business Plan Sample

Shopping Centre Operations & Business Plan

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CONTENTS

Overview 3

Introduction 4

The Retail Parties 8

The Retail Competition 11

The Retail Elements 16

Market Trends in Retail 25

Demographics Retail 28

Consumer and Tenant Demand 33

Site Considerations 36

Financial Matters 39

Lease Abstracts 49

Standard Retail Leases 52

Marketing Retail 56

Staff Administration 62

Crisis Management 71

Security 77

Checklist for Shops 86

Know Your Property 91

Business Plan 97

Leasing and Lease Management 105

Reporting 134

Contractors and Risk 140

©Time & Energy Pty Ltd, Professional Training and Coaching.

www.timeandenergy.com.au

PO Box 1860, Sunnybank Hills, 4109, Queensland, Australia

ALL RIGHTS RESERVED. No part of this book may be reproduced, stored in a retrieval system, or

transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise

without the prior permission of the author.

http://www.timeandenergy.com.au/


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Overview

This book has been written for many types of people, all of whom have an

involvement with retail property and its success. This Shopping Centre

Business Plan model has been used by many industry professionals as they

seek to enter or improve their position in the market. The best Shopping

Centres use a plan and then keep to its formulation. It is important to know

that at the beginning or formulation of your business plan, you will only know

what you want to achieve and what the market provides you at that time. For

that reason you must be continually aware of market changes and the need to

adjust your business plan as you proceed. A Shopping Centre business plan

is thereby a fluid and changing document that gives you stability and direction

in an ever changing business environment.

It is wise to review your Shopping Centre business plan performance monthly

and quarterly with this in mind. You should expect a Shopping Centre

business plan to take you some many days to formulate and weeks to

correctly finalize. The reason for this is that you must identify and then

balance all the issues that are important to you and the property. This takes

good research and investigation over time. Good luck with your project and

recognize that the Shopping Centre industry is both very rewarding and

satisfying.

The Author John Highman


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Introduction


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INTRODUCTION

Shopping Centres have principally evolved from conception to a major part of

our economic community since the end of World War 2.

Prior to that time, any shopping and retailing outside of city centres occurred

in small suburban local precincts. The basic shopping commodity products

were then provided for in local groups of shops, which included Butcher, Fruit

and Veg, Grocer, Delicatessen. It was unlikely that the shopping needs of a

family extended beyond that ‘basic’ product more than a few times a year.

The major world economic growth from the end of World War 2 and the

evolution of the ‘Baby Boomers’ created both the need and the cash flow for

new retail products and services. Particularly from the 1960’s onwards we

have seen a major evolution in the way in which retail products are created

and supplied to satisfy the seemingly endless customer demand.

Product diversity is now forever growing and creating new markets for the

‘retail spend’ within shopping centres. The property market has moved with

this trend and supported product growth with unique shopping outlets that

came to be labeled ‘Shopping Centres’.

Today ‘Shopping Centres’ have almost completely taken over most retailing

by offering multi faceted retail outlets for all customer and retailer

requirements. Those new Shopping Centre types include:-

Neighbourhood Centres

Community Centres

Sub-Regional Centres

Regional Centres

Super Regional Centres


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Through this e-book we will look at many aspects of this dynamic retail

property category and how ‘Property Professionals’ can make their job and

their property more professional and diverse.

We cover relevant tools and issues such as:

Know the dynamic effects of Retail Management

Create your own Retail Marketing Plan

Understand how to write a Retail Business Plan

Know the Types of Retail properties

Create your own demographic analysis

Know how to Staff a Retail Management Office

Create your own Lease Abstract file

Understand how to create a Crisis Management Plan

Understand Customer and Tenant demand

Understand the Financial aspects of Retail Management

Know the 10 site Considerations of Retail property

Understand how to analyse the Retail Competition

AND MORE…………


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About The Author

John Highman is a Professional Real Estate Author and Coach. People have

engaged John's services to speak at Real Estate Conferences and Seminars

over many years.

Recognized as a specialist on all facets of property, his coaching sessions are

informative, entertaining and inspirational. He has blended over 30 years

of extensive hands-on experience in ‘Real Estate’ with human performance

and presentation skills, to create a series of Real Estate Seminars and

Keynotes, that give focus and balance to both individuals and teams in their

pursuit of excellence. He has also held senior positions in leading Real

Estate businesses.

With increases in the demands in today’s Real Estate world for sales, service,

and ‘bottom-line’ performance, there is a constant pressure on professionals

to do much more with less. A new definition for ‘personal excellence’ is

essential; his coaching and training sessions addresses this need. In this

publication, John brings to you real and relative real estate insights to help

focus and build your business.

Important Note:

The within document is a template and instructional guide only which must be adjusted to suit

your needs, your market, and the country in which you are located. Take time to understand

the legislation and laws which apply to the Real Estate profession and Retail property in your

country and local location before finalizing your document and the functions of your

property.


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The Retail Parties


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INTERESTED PARTIES - RETAILING

By its very nature, any retail property hinges its success on the relationship

with and between its several ‘interested parties’.

The interaction and service of this group is fundamental to retailing success.

The ‘interested parties’ are:

1. Owners/Landlords - this includes the involvement of Property Managers

working closely with the landlords.

2. Tenants - the occupants and rent payers for the property.

3. Consumers - the ‘key stone’ of retail success.

4. Lenders - the financiers of the retail property.

It is common for the priorities of each group to differ in the function of a

Shopping Centre. The pressures of retail spend, economic conditions,

demographics, occupancy costs, and product changes, all effect the

performance and overall success of a retail property.

Dynamic Balance

A successful Retail property is thereby the result of a ‘Dynamic Balance’

involving the following positions:

The Landlord is ultimately seeking the best and highest sustainable rents

together with growth and strong long term lease covenants.

The Tenants seek low rents and occupancy costs which still give them a

high quality retail presence that generates business through good

customer visitation and spend.


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Consumers are seeking good access, good service, and value for money,

‘feel good’ shopping, modern premises, and good retail product range.

Lenders are seeking assurance of overall retailing success whilst

maintaining their desired return on funds invested.

These four stakeholders of the ‘Dynamic Balance’ drive the Retail property

simultaneously in three separate ways:

1. As a Property

2. As an Investment

3. As a Business

The skills of a Centre Manager or Property Manager must be diverse and

focused to achieve positive results for all stakeholders. Be aware of the need

for total balance between the stakeholders and the three elements of retail

operations.

A good retail property will dynamically balance all of these critical issues and

make the property more successful in the interaction with the community that

supports it. The most important factor in the function of the shopping centre

is the acceptance and the service it provides to the local community. Without

people spending money at the retail property, nothing else will work. It should

also be said that ongoing adjustment to the property must always occur to

position it at the top of the customers mind. Retail property is therefore never

static and is growing and living in all respects. This includes, tenant

placement, presentation, marketing, community involvement, and

maintenance. In running a shopping centre your fullest attention to these and

other daily aspects is essential for the success of the property.


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The Retail Competition


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RETAIL ~ THE COMPETITION

As a property professional you will be exposed to many property types and

retail is no different. Retail is however highly affected by customer demands

and precinct and regional demographics.

Being able to professionally compare and monitor retail premises or Shopping

Centres in your precinct is a skill requiring a complete understanding of the

product and the retail property discipline. Knowing your area and how the

community accepts your property is part of good control and guidance which

can steer your property forward.

Factors to Consider

To compare shopping centres or retail premises fully, the factors you need to

consider for each site are

1. Location factors

Exposure

Access

Visibility

Traffic counts

Consumer base

Customer services (parking, toilets, common areas etc.)

2. Appearance

Modern?

Practical/ Functional

Attractive

Positive customer sentiment


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3. Tenant fitout/Ambience

Balanced standard

Clean

Functional

Well maintained

4. Tenancy Mix

Anchor tenants

Majors

Specialty balance

Satisfying customer needs

National chains versus Local tenants

5. Price Pointing

Does pricing suit consumer?

Blue collar versus White collar customer needs

Customer spending patterns

Customer budget limitations

6. Rental information

Gross versus Net Rents

Rental incentives to attract tenants

Leases versus Monthly tenants

Lease terms/expiries/options/Rent Reviews

7. Potential Upside for Shopping Centre

Expansion potential

Population shifts and growth

Customer demand


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8. Surrounding Areas

Parkland

Parking

Transport

Industrial/Residential/Commercial

Nearby competition/type and effect

9. Trade figures

Notice levels and type of customers

Inspect at various times

Identify strong trading tenants versus slow traders

Access MAT figures

Through all this analysis remember that successful retail trading is driven from

a positive shopping experience for the customers. Look for any negatives that

will deter or discourage shoppers. Conducting your own questioning of

shoppers is a good way of understanding where the weaknesses are for a

particular property.

Determining Market Share

Determining where your property sits in relation to its market will involve the

following stages:

1. Identifying the trade capture area

2. Identifying the total GLAR (Gross Lettable Area Retail) of all the properties

in the trade capture area

3. Proportioning the GLAR for your property against the total GLAR for the

trade area (and the need to know your %)

4. Researching your customer spending patterns within age/time/commodity

groups/amount

5. Reviewing all turnover figures for your centre and others nearby


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The object of this analysis is to determine if your property is achieving is fair

proportion of the retail spend for the relative trade capture area. Lack of

access to accurate turnover figures will however restrict the analysis. Where

and how you gather information from nearby properties is a function involving

skill. If you collect the wrong or incorrect information then it can lead you

astray.

In dealing with medium to larger properties it is common to employ a ‘Market

Research’ Company to work with you in data analysis and gathering. This will

usually involve the positioning of people to undertake customer ‘Shopping

Surveys’ at different hours over a typical training period (usually a number of

weeks). An adjustment for Seasonal shopping (e.g. Xmas and Easter) also

needs to be allowed.


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END OF SAMPLE


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‘Create the best Retail Property and Retail

Business Plan possible, it will guide you to new

opportunities’

Time & Energy Pty Ltd

PO Box 1860

Sunnybank Hills

Queensland, Australia.

Ph 07 37116900

Fax 07 37115800

©Time & Energy Pty Ltd, Professional Training and Coaching.

ALL RIGHTS RESERVED. No part of this book may be reproduced, stored in a retrieval system, or

transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise

without the prior permission of the author.

Documents

Shopping Centre Business Plan Sample