Analysis of Tenant mix in shopping malls

ABSTRACT
A good tenant mix includes a variety of compatible (or complementary) retail/service providers,
and an efficient space allocation (both size and number) and proper tenant placement that
encourages the interchange of customers and retail activities. Tenant mix is not a static
condition: the market changes over time, as do the customer preferences and fashion trends.
Therefore, even the “ideal” condition achieved in one season or period might not be suitable for
the next one. Consequently, centre managers have to adjust their tenant mix constantly to keep
up with the market trends. Under these circumstances, it is not surprising to find that an ideal
tenant mix can be a puzzle for centre managers factoring in statutory laws that require
commercial leases to have a minimal term of five years and three months in Kenya.
The main objective of the study was to analyze tenant mix in Shopping Malls. The study adopted
a descriptive survey which assisted the researcher to systematically and accurately conduct an
analysis of tenant mix in shopping in malls, with a focus on The Junction and T-Malls. Random
sampling technique was used to select the sample representatives. The study population 60
respondents comprising of chief officers, departmental heads and general staff from the real
estate firm managing these two malls. Primary data was collected by the use of questionnaires.
The structured questions were used in an effort to conserve time and money as well as to
facilitate in easier analysis as they are in immediate usable form. The raw data collected was
collated to aid simplification. Microsoft Excel and the Statistical Package for Social Scientists
(SPSS) were also used to aid in the analysis.
The study concluded that, a shopping centre is meant to fulfill consumers’ needs in a certain
region. Consequently it should contain the highest product variety demanded from convenience
goods to comparative goods. This variety of the retail agglomeration plays a crucial part in
increasing productivity. However, variety is not merely the diversity of product combinations but
should include certain principles to maximize the favourable effects that generate increasing
returns. In a shopping centre, product variety comes from the combination of retail tenants and
tenant mix strategies that are adopted by the managers. Without operational rules, tenant mix
decision-making normally follows a “rule of thumb” or experienced common sense. Therefore
with a better understanding of leading community center tenants, including their site selection
criteria and methodologies, the real estate developer can better understand what attributes, and
which information will best serve him in the community center tenant mix process.
The study recommended that armed with today’s technology real estate company managing
malls can then quickly map out tenant locations in a given market, estimate their trade areas, and
visualize underserved markets. With an understanding of a desired tenant’s strong site
preferences, the developer can then seek out a site which meets those requirements adequately.
With an understanding of how point of sale (POS) and demographic data is used, the developer
will be better equipped to approach lease negotiations, and better understand which sites will be
better suited to certain tenants.
 

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Analysis of Tenant Mix in Shopping Malls Christabel.pdf2.3 MB