Shopping Centre Managers - Essential Aspects of a Tenant Retention Plan

When you are establishing a tenant retention program in a Retail Investment Property, there are some critical components to the programme itself that should be carefully considered.

The tenant retention program should be written and implemented by the property manager annually. It should then be submitted to the landlord for consideration and approval. A well-constructed program will benefit the property both in income and expenditure performance. It will also reduce the impact of vacancy within the property. Many medium sized and larger properties incorporate the retention program into the ongoing tenant mix strategy.

As part of the design of the program, the essential aspects to incorporate are as follows:

The program should be drafted and considered in the few months leading up to the financial year for the property. This allows the income profile for the property and the property budget to be integrated into the retention strategy.
The anchor tenants to the property will form a considerable strong foundation around which the retention program will evolve. On this basis, the lease for the anchor tenant should be both stable and long term. If it is expected that the anchor tenants will be leaving the property, high priority should be placed on a replacement strategy. The anchor tenant should be matched to the demographic of the local community and the shopper visiting the property.
A form of standard lease or standard lease strategy should be incorporated into the retention program. To achieve this, the landlord needs to set some benchmarks and KPI for the leasing process. This will also help the leasing agents as they proceed to renegotiate leases with existing tenants.
A tenant communication questionnaire should be developed for implementing and using within the retention program. The questionnaire should deal with the occupancy matters relating to the property and the tenancy. It should be served on the tenants in the two weeks leading up to every tenant interview. The tenant then fills out the questionnaire and provides it to the property manager during the interview process. Matters of expansion, contraction, relocation, trade, customer patterns, production, and rental should always be covered in the questionnaire.
The sales patterns from the retail tenants in the property will allow the landlord and the property manager to identify tenants that may be struggling. Any reasons for the difficulty can then be reviewed and addressed.
For the times that a vacant tenancy is expected or is to occur, a process of lease marketing, inspecting, presentation, and offering should be considered to shorten the vacancy downtime.
A fully occupied property will place operational pressures on the property and the expenditure budget. On this basis the tenant retention plan is a critical component of the annual budgetary considerations undertaken by the landlord. Benchmarks and other KPI's of property performance will be more accurately prepared as a direct result. The expected operational expenditure of the property should be compared to similar property in the same location. Tenants will not readily occupy a property if the outgoings are unrealistic and they are required to pay them as part of the lease structure.

A successful tenancy retention plan will always help the property to perform at its best given the pressures in the local property market. It is a special service provided by expert property managers and leasing agents.

If you want more free tips and ideas to help your retail shopping centre leasing and tenant mix strategy you can get a free ebook right here at

John Highman is an expert real estate author, conference speaker, and coach. He helps Real Estate Agents to improve their market share, negotiation skills, listings, and commissions.

Original article