Services and Amenities in Shopping Centre Performance

By John Highman

Do you want to buy a shopping centre? How much money do you want to spend, and what size property should you consider? It is time to do a fact check on shopping centre ownership or performance for the longer term. 

The best place to start your review is at a local level, given that you will likely know more about your local region, where the properties are, and what types of customers are serviced.

Retail Property Costs

One thing to remember here is that a typical shopping centre, compared to other property types such as office and industrial, will have higher maintenance due to the size of the tenancy mix and the number of customers visiting the property daily. 

There may also be other extended elements to consider, such as the other customers for a location, such as tourism. So, think broadly when looking at shopping centre purchases, considering what happens at the property and why that is so.

Operational Investigations

So, there are some investigations from a purchaser or owner perspective with retail property, cost considerations to review, and the property’s history. Those things will show you any strengths, weaknesses or future concerns impacting the investment.  

The history of the property and the operational costs compared to similar properties will also help indicate how a property is being maintained now and how that compares in the region. Ask about property outgoings and do some comparisons.

It is a fact that a retail shopping centre can be well integrated into a local community and its demographic. Look around a suburb and check out all the retail properties, their location, and how they balance their tenancy mix. Also, look at how busy they are from a sales and customer perspective.

Retail Property Opportunities

Retail property investment is an opportunity in waiting. Even though we have the internet today and a lot of retail shopping undertaken online, people still like local shopping convenience and essential daily shopping items. 

Therefore, every local shopping centre can have an established customer base and an ongoing future from an investment perspective. Looking for that is part of doing your ‘purchasing research’.  It’s a good start.

Operational Elements for Shopping Centres

Dig into the operational aspects of any retail property to see how things ‘function’.  Ask about all the operational things and check out the current systems and services.  Get copies of past outgoings, breakdowns, and history. Start your comparisons.

The costs of running one property may be different from another. Operational costs will be higher in some years or parts of the year.  There are always reasons for things in assessing property cashflows. Here are some elements that will tell you that.

  • Essential services
    • Lighting
    • Gas
    • Electrical
    • Air conditioning
    • Sewer
    • Drainage
  • Common areas
    • Internal
    • External
    • Car parking
  • Design and building spread
  • Landscaping and gardening
  • Size and number of buildings
  • Boundaries and road frontages
  • Gross rents
  • Net rents
  • Vacancy factors
  • Tenancy placement and mix
  • Outgoings costs
  • Car parking
  • Public transportation

So these are some of the essential operational issues to look at with any retail property you are about to consider purchasing. Visit the property several times weekly and assess how things are done, how people use the property, and overall customer interest.

John Highman
0417 221 108 |
Ray White Commercial Gold Coast
Shopping Centre Sales and Leasing Specialist

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