Is my retail concept or other business idea suitable for shopping centre environment? My 10 facts and tips for starting a business in a shopping centre
But sometimes we must decline – not all business ideas are suitable for the shopping centre environment. Sometimes we must say that we believe that the suggested store, restaurant or other concept just would not work. Our aim is to be far-sighted and we hope that our tenants succeed; therefore, we must believe in them.
For this reason, I wish to share some points concerning shopping centres as a business environment and some tips for potential tenants who are considering vacant premises in shopping centres as locations for their business.
Plan your concept or business idea
1. One of the very first things we ask for is your business plan. It‘s a necessity for us when we evaluate whether your business would be a fit – and hopefully a hit in our shopping centre. It is also important when assessing whether your plan is unique enough compared to the existing tenants in the same shopping centre. You should also have an estimate of your annual turnover before you ask us what the rent will be.
2. We don’t lease vacant retail premises for individual persons; we make all lease agreements with companies. Therefore, you need to have an actual firm that has e.g. a VAT number.
3. One option to have extra visibility is to use specialty leasing and shopping centre media opportunities: promotion spots, mall radio or other marketing spots inside a shopping centre. One option for starting a new business is to first have a pop-up store for a shorter lease period. It’s a good chance to test your concept and also gain the knowledge and confidence needed to build a long-term business.
Pros of shopping centres as retail locations
4. A shopping centre is a very predictable business location. The number of visitors and sales are disclosed publicly every year, and for the tenants even monthly. Additionally, the transport connections to shopping centres are stable; a bus stop located in front of a shopping centre is very seldom moved to a totally different location. Therefore, a potential tenant can make an educated guess on the potential customer flow.
5. A shopping centre is managed as a whole. In a brick-and-mortar location, an entrepreneur might find themselves in a situation in which there are five neighbouring and highly competitive hair saloons next to each other. In shopping centres, the management always aims to make sure that new tenants bring something new and that the competition environment stays healthy.
Shopping centre as a business environment
6. Since a shopping centre is a whole, this means it is also a unified service promise to the customers. For this reason, all tenants need to comply with common rules, e.g. regarding the opening hours. You need to evaluate if you can commit to them.
A shopping centre is always a unified service promise
7. Not all shopping centres have a similar catchment area – demographics and the competition environment regarding your business may differ a lot. Therefore, even if we say that your business idea is not a match with the specific shopping centre you are interested in, that does not mean that your business idea will not work anywhere. The shopping centre should have enough customers in your target group. Sometimes we might suggest vacant premises from some other shopping centre that would be a better match for you.
8. In addition to your own marketing efforts, shopping centres do marketing in many channels. We charge a marketing fee for this in addition to the capital rent. I encourage you to explore our marketing channels and figure out how you could utilise these opportunities if you were to start your store in one of our centres.
9. When you have started as a tenant in one of our shopping centres, be prepared to report your sales monthly. Those figures are treated with high confidentiality, but they are an important tool for our shopping centre management.
10. Last, but not least: shopping centres are evolving constantly. They are no longer just about retail. Shopping centres have versatile restaurant, entertainment and service offerings. Think out of the box and don’t narrow the scope too much. A shopping centre can be a platform for many different businesses.
Shopping centres support their tenants’ business in many ways, but it’s important that tenants also commit themselves to the whole centre. From the customers' point of view, a shopping centre is always a unified service promise.