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The prospects for retail property in 2008 range from a disaster scenario, much loved by journalists in search of a good story, to an expectation that the bottom of the market will be established. What is certain is that active asset management will once more be prized.
The conventional shopping centre economic model is that the interests of tenants and advertisers predominate. After all, they provide the income. However, in essence they are agents, willing to pay to have access to their target customers. In this light, it is the shoppers who need to be attracted and delighted.
Therefore, active asset management involves understanding the needs and aspirations of the particular groups of shoppers who use or might use the centre. While not entirely predictable, since shoppers are human, shopper behaviour is fortunately not random. It is possible to discover what actual and potential shoppers want. All too often, the mere identification and enumeration of shoppers is thought to provide sufficient insight. But knowing the number and demographic profile of shoppers is not an adequate basis to predict the kind of shopping centre they want.
As the choice of retail venues increases, shoppers will gravitate towards the shopping experience that most clearly fits their needs. Identifying and understanding the role for a particular centre in the shopper repertoire is essential. It is a particular skill that can be developed and honed and improved with experience. It is also a skill that FSP uses a lot and we would be delighted to use it on your behalf to address the real issues in your centres.
Perhaps 2008 will be the year when the old saying, “He who pays the piper calls the tune” will be widely applied across the shopping centre industry.
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