Turnover Leases – Managing for a Change!
As we move through the pandemic there has been a proliferation of ‘’noise’’ about the introduction of turnover leases with reduced or even ‘’zero’’ base rents but it seems there is little debate or consideration of the associated management implications.
I have always had a fascination with turnover leases and the associated rents and having completed a dissertation on the subject, was fortunate enough to land my perfect job at Capital & Counties more than 30 years ago (which then of course, became CSC and INTU) – then in their halcyon days and very much pioneers of the turnover lease in the UK!
Hindsight is a wonderful thing and in reality, the whole turnover model then was simply a means to squeeze a bit more rent out of those retailers trading extremely well….! Fast forward more than 20 years and I started to get involved in the Outlet sector and my whole outlook changed completely……...!
Many owners and managers will be perfectly capable of collecting turnover certificates and undertaking the requisite rental calculations, but do they have the systems; resources and skills to truly ‘’drive sales’’ and influence the performance of the occupiers, thereby improving their total rental income?
Data collected needs to be closely analysed with the results being used to support occupiers in stock selection; merchandising; staffing levels and customer service (underpinned with robust training and mystery shopper surveys). This is far more than the ‘’token gesture’’ retail liaison role deployed in many schemes and demands an appropriate level of resource and experience within the management team which will come at a price when every budget is under intense scrutiny!
This is not just a question of producing a new standard form of turnover lease!
Ray Cliff – OPTIMISE Destination Management Solutions Limited
#TurnoverLeases #OPTIMISE
Very true Ray, it is also a much broader subject with many more variables than some people seem to portray. Our many years of experience working with turnover leases suddenly stands us in good stead!
FM Consultant | Coach | Mentor | Board Trustee | CIWFM
4 年Thanks for sharing Ray, much to encourage discussion. There were/are some outstanding retail liaison people in the former intu centres who developed their roles as you say, becoming great partners to their retailers, influencing across the centre management team, making a quantifiable impact. I do hope the skills and experience built over the last 6 or 7 years can be retained through the budget challenges ahead.
Sales Director, Passionate about Facilities Management and walking the great outdoors
4 年Well said and I totally agree Ray Cliff. Interesting times ahead across all areas of #retail