Tips for Increasing the Value of Shopping Centers
What drives the value of shopping centres? There are several components of value: Location, Non-realty income, Tenant mix, and Anchor tenants. We’ll cover these in this article. But first, let’s examine some of the most critical factors that drive value. Here are some examples of these factors.
Non-realty income components
A shopping centre’s value reflects both its real estate and non-realty income components. The non-realty components are mainly composed of management fees and rental income. In addition, the income from operations such as concessions, parking, and landscaping are important to its success. Among other factors, a shopping centre’s location should be considered to maximize its value. Furthermore, a shopping centre must be accessible to customers, and it must be close to transportation.
Location
Location is crucial to the success of a shopping centre. The location of a centre directly impacts its traffic count and attractiveness. It is no accident that retailers have been unable to capitalize on this fact by locating their retail properties near a coronavirus. This virus proved how important location is to the success of a shopping centre. To maximize the value of a shopping centre, consider these tips:
Tenant mix
Creating a successful tenancy mix at shopping centres requires careful consideration of all factors. An anchor tenant attracts shoppers because of its size and prestige. In addition, it is a destination for shoppers, and their number increases when two similar outlets are located close to each other. The proportion of shoppers who purchase at one location is directly proportional to the number of those who make a similar purchase at the next location.
Anchor tenants
Anchor tenants are important because they drive traffic to a centre and benefit other businesses in the centre. For example, if Whole Foods decides to move out of the mall, a smoothie shop that wants to expand could lease space near it. Without an anchor tenant, the centre’s rental income will suffer, as other businesses will be hard-pressed to compete. In addition to anchor tenants, other businesses also depend on their customers.
Transformation to digital hubs
A new retail model is helping malls transform from static to dynamic spaces that are tailored to the needs of consumers. With omnichannel programming and experience offerings, these spaces enable brands to create small-scale pop-up locations and branded activation within local community hubs. The hub-and-spoke ecosystem will allow for satellite locations to scale to meet changing shopper trends while permanent locations will refresh their offerings on a scheduled basis.
Impact of e-commerce
In the world of e-commerce, last-mile solutions have become the most expensive and inefficient part of the supply chain. They account for 50% of the overall cost of moving inventory. The majority of e-commerce purchases are shipped from regional or centralized distribution centres. By creating an e-commerce marketplace at a shopping centre, retailers can cut their fulfillment costs and increase sales, while also reducing the environmental impact.
In South Africa there is one shopping centre that is perfectly located, the architecture is unique in the country, loads of parking, open air stores and more. The Promenade Shopping Centre in Mbombela is a well established centre and it part of the Orion Group and Real Estate.
