In an age where technological advances can provide immediate answers to key management questions throughout the retail industry, it can be easy to lose sight of core values in the business. This is often the case in shopping centre property management, where the essence of the industry lies in a solid focus on managing tenants and customers far more than it does in reporting. Property management teams can often find themselves spending a great deal of time analysing reports, checking bottom line sales, and so on – while not necessarily getting out and talking to the tenants and customers to make sure that everybody’s on the same page. The result of omitting the fundamentals can not only mean poor occupancy – it can also result in a prolonged struggle to retain tenants.
So says Comac Retail Property Group, General Manager of Property Management, Brett Williams, whose 28 years of experience in the industry – along with his prior role as a supermarket owner himself – has given him a broad perspective on the business, with a clear understanding on what it’s like to pay rent and wages, buy stock and juggle it all against the bottom line on a daily basis.
“The shopping centre is effectively a retail outlet,” observes Williams. “Whereas a fashion shop sells clothing, a shopping centre’s essentially selling shops. So what we need to provide to the general public is good tenancies with a good mix, who are providing the right service at the right price. And I think that when people sit down in the office and focus only on the bottom line, they can forget about the true core of our business.”
As shopping centre managers and retailers alike adjust to the emerging post-pandemic environment, Williams has seen a lot of landlords who have been severely impacted by Covid-19. Many have lost significant income during the pandemic, with multiple landlords having only had one supermarket paying rent from a whole centre, for an entire 10 to 12 month period, dramatically impacting their bottom line. While subsidies have been available for many, these haven’t been easy to access across the line.
“In our experience, Landlords have been very conscious of retention of tenants during the pandemic,” says Williams, “and they’re also conscious that so many of them have suffered long periods of forced closure, and they’re very sympathetic to that cause and have supported their tenants. But it’s now clear that the landlords have to recoup some of their losses and press forward to make sure that they can also meet the demands of their shareholders.”
According to Williams, tenant retention and sustainability must be the key immediate concerns for landlords, and this is where Comac Retail Property Group’s core expertise comes into play.
“Understanding the tenant and their expectations, and also understanding the landlord’s requirements is the key to that relationship,” comments Williams. “If you’re a centre manager who understands retail, you can determine the quality of your retailers and how they’re performing, and be able to assist them in ways that they can improve their bottom line. Our approach is to help them review their business, offer some sound marketing assistance or look at how they can cut their expenses, to help them grow their business or their bottom lines, which then in turn helps the landlord. It’s also about being able to manage the landlord’s moral obligation – which is not always their legal obligation – to ensure the longevity of their tenants so that they can pay their rent in the future, and in doing so retain those tenants long term.”
Given their strength in understanding tenants, Comac Retail Property Group occasionally finds itself assisting retailers who may not have a long-term future to move out of the shopping centre environment – a strategy that enables it to provide the maximum income available to their landlords, and which has helped Comac Retail Property Group to maintain a very low vacancy rate throughout its entire portfolio.
“A good retailer will always survive, a mediocre retailer will often survive, but a poor retailer invariably doesn’t,” says Williams. “So we work with those particular tenants who may believe they’re caught in a vortex that they can’t escape. If that’s the case, we help them make a graceful exit. This isn’t counterintuitive, because in the background we’re also looking for ways to upsell the business – so we’re looking for replacement tenants who are potentially a better fit with stronger sales.
“It’s a bit like retail itself,” he adds. “You need to supply what your customers want. People try to complicate it, but it really is that simple. But you’ve also got to have the knowledge to be able to help both the retailer and the landlord to find the best solution.”
For more information about Comac Retail Property Group, click through to the company website or call for a confidential discussion about how these retail experts can assist with your asset.