NO STONE UNTURNED: INVESTORS MUST APPROACH SHOPPING CENTRES DIFFERENTLY

"Gone are the days when an investor could buy a shopping centre and only took care of new tenants and maintenance." That's what retail consultant Rupert Parker Brady says in the Savills podcast No Stone Unturned. The owner of a mall needs to be much more involved. "Actually, they are the conductor of a symphony orchestra."

"Consumer behaviour has changed in recent years. While consumers used to go shopping for fun, they now go to the mall in a much more targeted way", says Parker Brady. “People are much more concerned with why they are going. That means a centre needs to have a much more organic mix of tenants, and a good story. The consumer must understand why he or she is there, and why they are being guided from a restaurant to a shop. This should prevent a consumer from solely visiting a Primark, for example, and then heading straight back home."

Symphony orchestra

Parker Brady compares this approach to a symphony orchestra. “Take all the tenants in a shopping centre - if you look at them as if they were part of an orchestra, they all have their own part to play. You don't tell them exactly what to do, but give them the chance to really make the best music together. They need the sheet music for that, or in the case of the shopping centre, a clear plan of action. And you have to rehearse and repeat that every day so that every day is a fantastic day to enter that shopping centre.”

This means that an owner or a property manager not only has to make sure that everyone pays the rent, but that they are also really involved. “It takes a different approach, and maybe other kinds of people for that approach,” says Parker Brady. "It is no longer enough to only instruct an advertising agency that arranges promotional events."

Calculate costs

When they consider raising the rent owners should also realise that a shopping centre as a whole has a story to tell. In addition to the large chains, every shopping centre also has specialist shops. “They're actually the soul of the centre - not the chains,” warns Parker Brady. “So you need them, just like the cafes and the restaurants. That's where people spend their money. You can pass on the costs of, for example, making the building more sustainable, but if you suffocate those small tenants with costs, you lose them. And then you have lost your good mix, and with it the customers you are trying to attract.”

In short, property owners should not only assess their asset from their own perspective, but also put themselves in the shoes of the retailer or consumer. "Otherwise the orchestra will go out of tune."