One of the strengths of Colliers International is that its consultants are experienced in designing successful shopping center concepts.
Key market segments:
- Commercial real estate;
- Offices;
- Warehouse and industrial properties;
- Hotel properties.
Russia's market of commercial real estate has thrived in recent years and investment has increased exponentially in new shopping centers or malls. When Colliers International consultants are involved, you know the project is going to be a success with investors.
Stages of Project Design:
1. Concept support at the stage of general design and detail design
The concept of a shopping center is typically designed at a pre-investment stage.
Construction is designed in more detail and may be changed at the subsequent phases: general and detail design. This inevitably affects significant elements of the shopping center concept.
In our experience, unless qualified commercial property advisors are on the case, such changes usually cut down retail space, make it less attractive, and cause overall deterioration of the concept. This may undermine the project's success, and the investors may never see the returns they were hoping for.
Colliers International believes that construction design should be carried out in close collaboration with the same advisors who designed the concept.
2. Tenant search and contracting
It is important to begin tenant search for retail premises early in the project, concurrently with concept design. The concept will need to be reviewed and updated once proposals come in from the key tenants (anchor and mini-anchor).
The sequence of tenant search for a shopping center looks like this:
- Spread information in the marketplace;
- Proposals from interested potential tenants;
- Competitive bidding for the best commercial terms;
- Signed intent;
- Assistance in negotiating and signing tenancy agreements.
The proper tenancy agreements will be signed after the management company opens the shopping center for business.
The whole process of renting out space in a shopping center may be divided into two main phases:
I. Search for "anchor" tenants
Anchor tenants are superstores, supermarkets, DIY operators, department stores and other major retailers (upwards of 1000 sqm) of clothing, footwear, sporting goods, consumer electronics or entertainment services. Anchors generate the largest shopper flows for the center. Whether or not smaller tenants will take an interest in the project is conditional on who the anchors are.
The process of anchor tenant search begins concurrently with project design and initial approvals, this being the stage when all the technical and technological conditions must be assured for the key retailers to operate successfully at the shopping center. This is also the stage when the more technologically challenging premises are designed, such as the food court, restaurants, caf?s, dry cleaners, pharmacy, and so on.
II. Search for key mall tenants
Once tentative deals are signed with the anchors, our brokers will begin looking for tenants to fill the shopping mall: these tenants will generate the highest percentage of income. How these tenants will feel about the project, and how high the rental rates will be in the mall area, will directly depend on the anchor lineup.
Mall tenant search begins at an early phase in the construction, typically 18 months before the scheduled opening.
At all times during this work, we will watch the combination of retail profiles in the mall, and make sure shop sizes are appropriate.
We will take care of talking to the tenants and finalizing the key commercial provisions of the tenancy agreement, but the final decision to admit or deny tenants is up to the landlord.
Our responsibility to the landlord is not limited to finding tenants. We will also assure compliance with the conceptual design of the shopping center, and we'll make sure that tenancy agreements are signed and security deposits made in a timely manner. We warrant to the landlord that we will use the most powerful marketing techniques to secure the best rental rates on retail space and find the right tenants in conformance with the retail plan.
Usually, 80% to 90% of space is filled by the time the shopping center opens for business. This is sufficient for the center to operate successfully.
The remaining small sections or kiosk spaces will be filled after the center opens. In some cases, when the shopping center is opened and marketed right, these spaces can be rented at higher rates.
Exclusive service
Tenant search for shopping centers is a service rendered by Colliers International on an exclusive basis, meaning that the client will not contract other persons to provide the same service, and will refrain from letting premises independently.
