The key to a good retail property is a good location and surrounding tenancy mix. The property will service a large residential population with limited competition, have good exposure and is easily accessible.
A good tenancy mix will include a combination of retailers that service the needs of the neighbourhood including a supermarket or convenience store, newsagent, bottleshop, a number of takeaways, bakery, butcher, hair dresser, video store and chemist and also a medical centre, post office and banks.
The average lease tenure or weighted average lease expiry (WALE) for multi-tenanted properties should be 7 – 10 years+. The trading history of the retailers should be strong and be supported by an increasing residential population base and a demographic that has a demand for the retailer’s products. For example a baby store might struggle to make sales in an area that is predominantly made up of older retirees.
The layout of the property needs to allow customers to easily access and navigate each store and must have clear signage; also level car parking is a big advantage.
For larger retail centres it is important that the relationship and location between the major tenant and the specialty shops is complimentary.
Prosper Group is in regular contact with the major retailers and we have the specific formulas they use to determine the correct ratio of specialty stores to major tenant by area (m²) and income ($). The major tenants also require specific amounts of area to accommodate their current and future needs and this will vary depending on the customer catchment or main trade area and projected population growth.
For more information about how Prosper Group commercial buyers agents can assist you source a quality retail property please call us on 1300 664 373 or email enquiries@prospergroup.com.au
