week 4 - retail

Question 1

define shopping centre

Answer 1

A major intergrated retail centre under single management with at least 1,000sqm of lettable retail floorspace

Question 2

explain regional shopping centre

Answer 2

a major intergrated retail centre under single management and based on either:
o at least one department or discount department store of a minimum 10,000sqm GLA and the centre contains total reporting GLA in excess of 25,000sqm
o Three full line or equivalent each of minimum 5,000 sqm GLA and the centre contains total reporting GLA in excess of 50,000 sqm

Question 3

explain sub regional shopping centre

Answer 3

is built around one or two major DDSs (Kmart, big w) one or more supermarkets, and includes specialty shops.

Question 4

explain a neighbourhood centre

Answer 4

is usually less than 10,000 sq.m in size and comprises one or two supermarkets along with a collection of food and non-food specialty shops and services in the same centre under single management.

Question 5

explain CBD centre

Answer 5

are retail centres located in the CBD of Australian capital cities. They may be either anchored by a major retailer or be a significant retail arcade in their own right. CBD centres are typically located within the retail core

Question 6

Financial KPI’s to consider

Answer 6

see slides

Question 7

what may monthly sales reports include

Answer 7

• review of aggregated monthly sales (compared to prior year)
• analysis of sales category performance (i.e. fresh food, cafes & restaurants, take away food)
• review of MAT (Moving Annual Turnover)

Question 8

a centre team should understand:

Answer 8

• the individual retailer performance and what may be influencing growth/decline
• What categories or precincts are driving performance of the centre
• What are the internal and external factors impacting on centre performance
• Understand how the centre is performing against key industry benchmarks
• Continuously review the centre strategy to ensure optimum sales performance
• How to respond to opportunities or competitive pressures

Question 9

main purpose of the retail act 2003

Answer 9

The main purpose of this act is to provide:

1. The certainty and fairness of retail leasing arrangements between landlords and tenants
2. The mechanism available to resolve disputes concerning leases of retail premises

Question 10

definition of a retail premises

Answer 10

The Retail Leases Act 2003 applies to a retail premises lease used wholly or predominantly for the sale or hire of goods by retail or the retail provision of services.

Question 11

define rent

Answer 11

A payment made periodically by a lessee to a lessor for the use of premises. The term “Rent” is often associated with a variety of other terms outlined below

Question 12

define outgoings

Answer 12

Outgoings are the costs a landlord must pay in relation to the premises or in the case of a multi-occupancy property, such as a shopping centre, the premises and the property. Calculated as a proportion of total expenses based on GLA (Gross Lettable Area)

Question 13

3 main types of lease

Answer 13

1. Net Lease – Base Rent + Outgoings (maintenance, management and statutory expenses)
2. Gross Lease – Base rent only
3. Semi-Gross lease – Base rent + Statutory Outgoings

Question 14

explain turnover rent (assignment)

Answer 14

Any form of lease rental arrangement in which the lessor receives a form of rental that is based upon the earnings of the lessee. Percentage rent is an example of a turnover rent

Question 15

explain tenancy mix

Answer 15

A good tenancy mix will attract & retain customers
The tenancy mix needs to:
o Meet the market / trade area needs
o Consider competitive positioning
o Take market research into consideration
o Anchor tenants draw customers to the centre
o Specialty retailers provide variety and a point of difference
o Need to balance complementary uses vs competitive uses
o Precinct & location of retailers carefully considered
o Strategic decisions are made around issues such as catalyst retailers & establishing a point of difference in the market

Question 16

define anchor tennants

Answer 16

tenants (e.g. coles, woolworths) Attract shopers, draw them in, Pay less rent typically based on their income

Usually the first, and the leading, tenant in a shopping centre whose prestige and name recognition attracts other tenants and & shoppers. Anchor tenant generally pays rent rate (per m2) lower than that paid by ancillary tenants (who will occupy smaller spaces).

Typical examples would include Coles, Woolworths, Tesco (England), Migros/Coop (Switzerland) etc. often a supermarket as it will attract a substantial quantity of people in on a daily basis. May pay a base rent and a percentage of operating income as part of their agreement.

Question 17

DEFINE ancillary tennant

Answer 17

focuses on a specific product (speciality tenant)

Question 18

define speacilty stores

Answer 18

are retail businesses that focus on specific product categories, such as office supplies, men’s or women’s clothing, carpet stores etc. It isn’t the product they sell that determines if a company is a specialty store, but rather the breadth of their product offering.

Question 19

what is catchment area

Answer 19

In human geography, a catchment area is the area from which a city, service or institution which attracts a population that uses its services.

Shopping centers and their respective catchment areas will typically vary with the size of the center and associated quantity of stores/shops leading to a more extensive catchment area.

Super regional centers such as Chadstone may have a catchment area of 3 hours and bulky goods centers would have a catchment area of 10-15 minutes (by private/public transport).

Question 20

explain primary and secondary catchment areas

Answer 20

Primary catchment areas – surrounding suburbs, users shop there regularly, ie weekly grocery shop. Smallest catchment areas – local strip shopping areas – maybe only 1-2kms for local fish and chip shop, pizza store, bakery, real estate.

Secondary catchment areas – larger areas – as for Chadstone, High Point, Westfield.

Question 21

explain implementing marking initiatives

Answer 21

The strategies employed by the CM will be dictated largely by the size and therefore catchment area of population etc.
Estimated future revenue and demographics analysis will also influence the type of marketing and advertising which would go increasing the numbers of potential shoppers to use the center but also the right tenants being aware of the opportunity also of having a store in the center.

Question 22

WHAT IS a precinct

Answer 22

Groups retailers in similar location generally around an anchor tenant and include;
• complementary uses – i.e. Café adjacent to homewares, selection of fresh food retailers
• Competitive uses – women’s fashion – allows customers to cross-shop & compare
• Cluster around services

Question 23

centre manage responsibility

Answer 23

Custodian of the Centre
o Develop and deliver on strategy for the asset
o Accountable for all centre operations, expenses & marketing decisions & deliverables
o Face of the Centre to retailers, customers & owners
o Acts as Chief Warden in an emergency
o Responsible for the safety of all centre users

Question 24

centre markeing

Answer 24

Retailers contribute to an annual plan for marketing a shopping centre which is generally based on a percentage of their base rent (generally 5% for specialty retailers);
The marketing plan covers:
• Annual sale campaigns (Boxing Day sales, Stocktake sales)
• Annual calendar events (Mother’s Day, Easter, Christmas, Chinese New Year)
• Retailer promotions (Fresh Food, Fashion)
• Special events (centre launches)
• Ongoing customer loyalty programs
• Branding / Positioning
• PR and Digital marketing/Social Media
• Community Engagement

Question 25

operations manager roles

Answer 25

Strategic Management of the building facilities
o Life Cycle Management
o Focus on sustainability (waste, energy, water)
o Ensures safety of all centre users & compliance with all regulatory codes & requirements

Question 26

explain strategic planning
Strategic planning:
At each stage of the shopping centre life cycle, planning is vital to ensure asset growth, and to provide accurate forecasting and reporting to the owners. Strategy Asset Planning generally covers the following;

Answer 26

• Investment Performance (current and forecast)
• Situation Analysis (demographics, competitors)
• Asset Positioning (current and desired)
• Asset Strategy (how are we going to get there)
• Development Opportunities

Question 27

define catchment area

Answer 27

area that attracts population to use it e.g. Chadstone has a reach ‘catchment area’ of 20km

Question 28

2 types of catchment areas

Answer 28

primary catchment area: immediate surrounding area

Secondary catchment area: beyond primary area ‘secondary users’ e.g. Geelong residents wanting to come to chadstone

Question 29

explain turnover rent

Answer 29

a turnover lease is a lease where the rent payable by the tenant is calculated either wholly or partially by the actual turnover achieved by the tenants business operations

Question 30

do seminar calculations

Answer 30

kate brasher