For this edition’s Industry Insight, Rob Jewell, Managing Director, Asset Management at Pradera Lateral, explores the importance of proactive asset management to avoid complacency and to drive growth.
In a fast-evolving market, the days of waiting for lease renewals and relying on existing brand line-ups are gone. We believe strong asset management means staying bold and fiercely customer-focused – not just reacting to change but proactively driving it. That means interrogating data, curating an intelligent retail mix, investing in asset enhancement, being focused on risk and opportunity in your income streams and ultimately, never standing still.
At its very core, the foundation of proactive asset management is drilling down into data to uncover what the customer truly wants. By delving into the data, landlords and asset managers can better align with the needs of their customers. Interpreting the insights with real understanding, allows asset managers to shape and deliver a strategy that will truly make an impact.
At the heart of this data journey is finding the right place for the right brand at the right time. Building a fit for purpose tenant mix isn’t just about landing the biggest names – it’s about placing brands where they’ll genuinely flourish. Too often, the industry has worked backwards, waiting for leases to end before starting the conversation. By shifting to a more proactive approach, you can unlock opportunities that elevate the customer experience.
To avoid a complacent approach, it’s time to look at leases in a more creative way. Traditional lease lengths can have terms of anywhere up to fifteen years and see brands stay on at retail centres for a long period of time, regardless of performance. Whilst in traditional property parlance shorter leases are seen as an income security risk, proactive asset managers should, in fact, welcome a blend of both shorter and longer leases – allowing them to lock in strong legacy brands, whilst also embracing flexibility.
Shorter leases allow landlords and asset managers to constantly review performance and brand salience with the market, something which can be particularly potent when introducing a strong retail mix. What’s more, an ever-shifting retail mix can often drive footfall, as customers flock to try out the new rotation of brands. Ultimately, you can right-size, relocate, or introduce brands regardless of lease length, so it’s important not to let this become a barrier.
When a centre nears full occupancy, as we’re seeing across the SGS portfolio, it creates positive leasing tension. This allows us to be highly deliberate and proactive about who we bring in – making tenant mix decisions based not only on brand desirability but also on how each fits within the wider zonal strategy.
Alongside creativity with leasing, landlord complacency is often revealed in a lack of asset enhancement investment. From substandard mall seating to poor signage to subpar lighting, complacent landlords and asset managers can often neglect these elements. However, these areas are integral to the customer journey and deserve both attention and investment. This includes developing an effective marketing and brand strategy, an area where many centres historically underinvest. At Lakeside Shopping Centre, we’ve overhauled the brand
strategy and are unafraid to make bold choices – whether it be capitalising on the onsite lake or launching a new customer-facing website, we’re pulling every lever at our disposal to unlock the asset’s potential.
This kind of long-term investment, whether it be in green spaces, car parking facilities or mall aesthetics, is an important element of defensive investment and can make a massive difference to footfall and sales. Long lease structures can leave landlords asleep at the wheel, but with a proactive asset management approach, complacency can be avoided and long-term investments will pay off.
Being scrupulous with mature income streams is another key way that asset managers can avoid complacency. For landlords and asset managers, it’s about maximising every inch of space, from underused car park areas to external zones, ensuring no opportunity is left untapped.
Ultimately, the retail landscape is evolving too quickly for landlords and asset managers to sit back and wait. Success now comes from bold, proactive asset management – by constantly pushing boundaries, from reimagining our lake and green spaces to overhauling our marketing strategies, we’re proving that retail destinations can thrive when they’re managed with creativity, agility and an unwavering customer focus.
