Major shopping centres looked appealing for years. All that foot traffic. The bright and shiny look. Being there was appealing.
The Covid hit, and traffic to major centres crashed. It’s coming back, but it’s not where it used to be.
With good space availability, leasing execs are doing the rounds, seeking to fill spaces. In some cases they are cutting deals, while in others the occupancy cost is as high as ever.
My advice to anyone negotiating for space ion a major shopping centre is: negotiate as if you have a better deal elsewhere. Don’t rely on it. Don’t visualise that centre as the only location for you. Have a viable plan ‘B’ and even a plan ‘C’. And, only agree to what you are 100% happy with.
Too often I see retailers agree to leases because of the appeal of bright shiny lights and what appears to be good foot traffic, one;y to rue the decisions for years.
By having viable and appealing options you allow yourself to have a more circumspect off the major centre leasing exec pitchy and that works in your favour.
I know there are people in our channel who say they get the best deals. It’s one think to claim this and another entirely to prove it. Ask for the evidence. In one situation I heard about recently when the retailer asked for evidence of deals a party claimed they had achieved the response was oh, privacy. That’s a crock in my view. If you claim you can get an awesome deal, prove it … otherwise, it remains marketing spin not backed by evidence.
You’re in your lease situation for 5 years at least usually. That’s a long time to be locked into something which with you are dissatisfied or unhappy. It is why you need to research carefully, to be sure you will be happy. It’s why you need to have options so you can compare before you sign anything.
One tip for those considering a shopping centre situation, have a plan ‘B’ option that is outside the centre and it is this different situation comparison that could be particularly helpful in landing at a decision. The two settings are physically and location different, they are usually financially different, too. This is what it is good for you to have the option with which you can compare. I have done this myself and pivoted to outside of shopping centre retail – less stress, lower occupancy cost and higher profit from sales = better business value.