How to Manage a Shopping Centre Successfully

Managing a shopping centre is a specialised process that needs a good property manager who understands the property type and what is required to optimised property performance for the tenants and the landlord.

Retail property is special when it comes to function and performance. It takes ongoing constant work to nurture a retail property to success. You cannot put tenants in the property and then let things just happen. A successful retail property is all about strategy and implementation.

Rents and leases are only a small part of the shopping centre management process. Consider this list.

    1. Rent optimisation for the landlord given the business plan for the property
    1. Realistic occupancy costs that do not put the tenant out of business
    1. Placement of the property in the local community and how it will serve the community
    1. Lease incentives to keep current tenants
    1. Tenant mix to help the property be successful
    1. Lease incentives to attract new tenants
    1. Tenant communication to keep occupancy up and conflict to a minimum
    1. Landlord reporting processes that keep the property information flowing and assist the decision process
    1. Rent review processes that stabilise growth of rent without creating a vacancy blowout
    1. Outgoings management to minimise expenditure whilst running the property to acceptable levels of operational performance
    1. Maintenance management to keep the property performing financially and physically
    1. Budgeting of the shopping centre income and expenditure so the targets for the property are reached
    1. Marketing the property to the community and the potential customer to optimise the trade and turnover for tenants
  1. Lease negotiations for vacant space

The list is not complete but shows you the most important elements of control in shopping centre management. A property manager should seek to keep these items under control at all times.

The tenant mix in a retail property is the main strategy that will help it be successful. When you choose the right tenants for the property and help them to trade through directed marketing of the property, you are heading down the right path to progress.

The tenant mix is a product of choice; a choice of what the property is to the community and how you will make it happen. The retail property may be any of the following:

    • Local Strip Shopping of a small group of single shops
    • Convenience Shopping with one anchor tenant
    • Neighbourhood Centre with one or more anchor tenants
    • District Centre with two or more anchor tenants and many small specialty retailers
  • Regional Centre with three or more anchor tenants and a large number of small and medium size specialty retailers

When you know the customer base you serve, and you know why they will visit the property, then you will know the tenants that are required in the tenant mix to make the property successful. Your tenant mix and strategy can be built around these elements. From that point onwards it is a matter of attracting the customer to visit the property and spend money. That is where Shopping Centre marketing takes over.

John Highman is an expert real estate author, conference speaker, and coach. He helps Real Estate Agents globally to improve their property business, market share, listings, and commissions. John is a successful real estate agent himself and has been so for over 30+ years.

Shopping Centre Operating Costs

When you efficiently manage a Shopping Centre, the expenditure and operational costs have to be well under control. In this property market there are a number of pressures to balance as part of that property management process, and the expenditure will always be of great concern. It is very difficult to lease vacant premises to new tenants if the outgoings are excessive for a property of its type. The landlord will also have a lower net income if that is the case.

Most importantly the Shopping Centre should be performing financially to standards which are at least equal to or better than any other competition properties in the area of similar type and size. The standards should include key financial criteria such as:

  • Repairs and Maintenance costs
  • Insurances
  • Essential Maintenance Services
  • Income generation
  • Vacancy factor
  • Income growth
  • Sales MAT (Mean Average Turnover)
  • Sales per retailer type
  • Sales per shop size
  • Customer visits to the property
  • Council rates and other statutory costs

These figures should be managed and understood within the Shopping Centre financial performance plan. To achieve this it is not uncommon for Shopping Centre’s to share some information and averages as part of market research into financial performance. If you cannot compare your property to something else then you will not know where it is headed and how it is performing.

It should be said that the history of your property over the last few years will always be useful as a benchmark in your property performance plan. As part of that historic analysis, you can split the outgoings between controllable items and uncontrollable items, and then track the escalations by income codes or types.

The uncontrollable items are those that are applied to the property and must be paid. Typically they are council rates, water rates, and land tax. The escalations in these items occur because of the uncontrollable policies and rating processes of the local councils. Usually they will base their rates and charges on the property value. It is not unusual for the councils to be valuing the local properties every two years for this purpose. Retail Centre Managers know the high value of monitoring and disputing the property value when it comes through. You can save extensive operational costs and payments for rates and taxes if you get a realistic property value.

Cooperation between Centre Managers is therefore common and quite productive given that the job and industry is just so special. Unskilled and ordinary property managers have little chance to improve and specialize without gaining experience from other established Retail Centre Managers in this part of the property industry.

Real Estate Prospecting Secrets – 10 Ways to Make Cold Calling Really Work

Cold Calling is an essential part of new business generation in Real Estate of all types. The more people you talk to, and the more frequently you do it, the better you become at the process. That means more client and more listings. That means more commissions. Sounds good doesn’t it?

Unfortunately many real estate agents find the cold calling process very difficult and will avoid it at any opportunity. This call reluctance is due to the high levels of personal discipline and practice that is really required for the task. Not every salesperson has got what it takes to do the calling on a daily basis. They also have trouble with prospects saying ‘no not today thanks’. Have you got the stamina and drive to do this?

Before we get further into the subject, it should also be said here that many governments have created legislation to control or restrict cold calling activities by businesses and real estate agents. They know that salespeople have to make calls to generate business and the legislation they make is the only way to control that. So before you start making lots of cold calls, seek out the facts regards any local legislation that can impact your calling processes, understand the rules, and then work out what you can do in calling people on the telephone. There will be a way for you to make calls to prospects. You just need to know how.

To be very successful at cold calling in real estate you have to start thinking the right way. Your mind has to support the process. Without a clear cold calling mindset you will fail or give up before you get very far at all. There is only one mindset you need here; you are simply calling people to see if you can be of help to them. If they say “no”, then that’s really OK.

Do not pitch and push the prospect into a meeting simply because you think you have to. I would rather have 5 meetings with people that have a “need” with what I am offering, than 20 meetings with people who do not.

The telephone should be the “tool” of choice that you use to decide if the prospect has a need or an interest in what you have to offer.

Also understand that many of your colleagues will tell you that the cold calling process doesn’t work. They will say that largely to justify their lack of action and success on the telephone. You are not like everyone else nor should you be. You should strive to be better than the others and your peers. Cold calling will help you here; make no mistake. Your personal success in cold calling will soon overtake any negativity spread by others.

Do not outsource cold calling in your job to a call centre. Real estate agents do this largely to avoid the issue. Do the hard stuff and make the calls yourself. Call centres are really of little skill when it comes to real estate and their conversions are not high. Take the decision to make your own cold calls and then start doing them. You will be a better salesperson in the process. Sure the first couple of weeks will be a challenge but very soon you will break through the problem and start to generate more business than you ever thought possible.

The best salespeople did not get to that level by sitting in the office. They became masters at the art of prospecting and cold calling. So what are the rules to cold calling in real estate? Try these:

  1. Research constantly the areas and people to call. Information is the key here. The more accurately you call, the better your conversions.
  2. Do not be afraid of “gatekeepers”, or those people stopping you getting to the decision makers. Know that they have been told to do that. Simply respect them and what they have to say. Your choice when you come up against them is to move on to another prospect, or send a letter instead. It really depends on how important the prospect is to you.
  3. Enter your prospects into a simple database so they are ready for you to lift the telephone. Preparation is the key.
  4. Make calls at the same time each day that allows you to reach the prospects that suit your business; this is called your “prime prospecting time”. Only you know what that time frame is.
  5. Transfer your call results directly into your database; do not delegate it to administration staff. You have to take the ownership of the task as it will make you a better salesperson. This will help you value your database more and you will keep the data more up to date.
  6. Do not let people and other appointments stop you calling at the designated time. Do the calls at the same time each day.
  7. The morning is the best time to prospect if you can do it; the mind is fresh and responsive. Your ability to conduct intelligent and direct conversation is higher.
  8. Your conversions in making cold calls will improve as your dialogue and confidence improves, for this reason practice your calls every day for 20 minutes when you first rise.
  9. Make your calls for at least 2 hours each day, no exceptions.
  10. Genuine prospects should be contacted at least every 90 days to build the rapport and convert more meetings.

When you make your cold calls on your prospects daily, and drive your own database, your business will thrive. It’s really not complicated. Simplify your prospecting actions in your business and drive the new opportunity yourself.

John Highman is an expert real estate speaker and coach that helps Real Estate Agents globally to improve their property business, market share, listings, and commissions. John is a successful real estate agent himself and has been so for over 30+ years.

Shanghai World Financial Center Construction

Shanghai World Financial Center construction was one structure worth researching. As anyone could imagine, building such a structure as Shanghai World Financial Center requires knowledge that has not been know before-but with technology and testing the project was completed on August 28, 2008

The importance of developing building technologies to resists earth movement and high winds in high-rise construction holds an important value. Initially planned to be the world’s tallest building, but because of economic situation, the Asian Financial Crises, and other delays, The Shanghai World Financial Center, located in Shanghai, China, is eye appealing. While it was in the building process, the building dimensions were increased for couple reasons that we know of. After a decision to increase gross area of the WFC in Shanghai by 15%, increase in overturning moment from wind forces of about 25% came as well. A diagonal bracing was also used. With the design changes, the service core shear wall was achieved and there came the decrease in the amount of steel needed for the robust structure.

The first structure was called the mega structure, which in reality consists of major structural columns, the major diagonals, and the belt trusses. The second one was a concrete walls of the service core I mentioned above. The third system was a relationship between concrete wall of the service core and the mega-columns, that were made by the outrigger trusses…

As the final design of LERA (Leslie E. Robertson Associates), Shanghai World Financial Center construction consisted of three relatively narrow columns, compared to seventeen wide columns. An important area to mention is how the stiffness of the perimeter and trusses has movement, as well as shears in the concrete walls of the service core, can be increased or decreased. The whole robust design is smiler that of the, previous, World Trade Center in NY. The wind engineering results were different compared to that of the World Trade Center in NY, based on extensive wind testing.

The earthquake engineering for the Shanghai World Financial Center construction was extensive. The design allows for a 200 year period for typhoon return and a 2000 year return on earthquake. In the process of its foundation construction, temporary support for both mat and below-grade concrete floors were made because of the use of top-down construction method, H-piles large steel sections extended from the piling to the ground surface… Other issues that come with this high rise were the cost, as in any project. Because the pile cut-off was well below grade, it was costing too much to reinforce existing pile. LERA determined that the current pile foundation system they had in place could accept a larger expansion; they only had the issue of cutting the weight of the original building by 10% or more; the other aspect they had to do was to redistribute the loads to the pile so that increased lateral loads the come from wind and earthquake can be surpassed.

For Shanghai World Financial Center construction or other building areas where winds are a problem, the seismic effects typically include:

1. High base overturning moment and foundation design (wind, seismic)

2. High shear demand near base (seismic)

3. High gravity stresses in the vertical elements (and use of high-strength materials) to minimize structural sizes for economic structural design and to maximize net floor area

4. Differential axial shortening under gravity forces, including effect on floor slope and outrigger force demands

5. Development of ductility in elements at the base of a structure under high compressive gravity stress (seismic)

6. Controlling lateral accelerations (wind)

7. Controlling story drift (wind, seismic)

8. Controlling damage so as to enable repair (seismic)

9. Ensuring ductile energy dissipation mechanisms and preventing brittle failures (seismic)

Each geographical location requires specific, special requirement, to be developed and tested, when the project is breaking new ground, like The Shanghai World Financial Center construction… Although other buildings were structured in that geographical location, but not with the same height and greatness

7 Keys to a Successful Shopping Centre Marketing Campaign

When it comes to leasing and managing a shopping centre, the marketing process is absolutely critical to the tenancy process and the property performance. There is a significant link in a shopping centre between customers, tenants, the landlord, and the property manager. The common bond that allows all of these parties to succeed and grow within the property is marketing.

Look for the Signs

If a retail property is not marketed correctly, it will soon start to flounder and fail. This will eventually reflect in poor sales and flow through to lower levels of rental. The landlord and the tenants both suffer. It is easy to see the pressures of a undermarketed retail property today simply by walking around the property during trading hours.

A successful marketing program for a shopping centre needs to attract customers and generate sales. The program needs to connect with the local community and the demographic profile of shoppers in the area. It may also be that some shoppers will come from other regions for various reasons.

Know Your Shoppers

To understand the shoppers that visit your property, it will be necessary to undertake a survey process on a quarterly basis. That will normally be involving experienced survey personal to interview shoppers throughout the week and at various times of the day. Local workers and tourists may also skew the result of your marketing survey. Be aware of these variations.

Here are some tips to establishing a shopping centre marketing campaign.

    1. Look at the surrounding area and the expected changes in the regional population. In what ways will that population demographic change in coming years? Are there any expected growth phases, or issues of contraction?
    1. Visit the local council offices to understand the current zoning regulations that apply in the region. Ask about any expected changes to the property development plan, and get details regards the expected growth of population and residential areas.
    1. Competing properties in the local area should be identified and inspected. They will have impact on your property currently and may be taking some of your customer base already.
    1. Identify the points of difference between competing properties and your property. Look at the tenancy mix across any competing property and any weaknesses that can be turned into opportunities for you.
    1. Vacancy factors throughout the region should be identified. They will change from time to time throughout the year as seasonal shopping impacts the retail spending. Asking rentals for vacant tenancies in other properties may have an impact on your market rental structure. Track these numbers.
    1. Your local region and the shopping patterns identified will produce seasonal retail trade. The history of your property and tenants trading figures will give you some hints as to how that variation occurs. A marketing program needs to be built around the seasonal shopping patterns.
  1. Talk to the tenants in your property and ask them about trading patterns and customer numbers. They will share valuable information to help you improve awareness on sales opportunity.

When you take this regional information into account and drill down into the facts available, you can start to refine and develop a productive marketing campaign for your retail property.