...IN THE PLANNING AND DEVELOPMENT OF SHOPPING AND SPECIALISED RETAIL CENTER


Feasibility studies

The ecostra feasibility study involves an expansion of the analytical steps in a market and location analysis through the addition of, among other information, a profitability or cost-effectiveness analysis. In addition, a study on the optimal area and utilisation concept (sector and business type mix, shop layout of the center) can also be integrated if required

Thus at an early stage, comprehensive, detailed market findings can be integrated into the planning process, representing important information for the investors as well as the planning architects.

  • Presentation of the project data
  • Location description (description of the planned location and the situation in the relevant surrounding area), based on up-to-date, on-the-spot surveys
  • SWOT analysis with detailed analysis of the location features for the planned utilisation
  • Description and evaluation of the competitive situation in the catchment area, presenting the relevant data of each competitive location and an appraisal of its competitive strength, based on up-to-date, on-the-spot surveys
  • Delineation and zoning of the potential catchment area, and ascertainment of the relevant socio-economic data (population, purchasing power level, purchasing power potential, etc.)
  • Forecasts of factors including the development of population and purchasing power within the catchment area
  • Analysis of the potential turnover to be expected at the planned object
  • Profitability or cost-effectiveness analysis of the planned building
  • Summary of the feasibility study

The specific work programme of a feasibility study can be adapted according to the task definition and/or specific requirements of the project.

 

Analyses of the area and utilisation concept

As well as location factors, a brand-oriented mix of sectors and business types as well as an effective shop layout, are particularly important factors in the customer acceptance and economic success of a center.

Starting from the "form follows function" planning principle, modern market research methods adapted to the specific location and market situation are used to determine optimal area and utilisation concepts for a shopping or specialised retail center. This may:

  • if necessary, already be carried out at the early planning stage of a project, whereby the services performed by the architect team are supported by well-grounded data and indicators, thus ensuring a high degree of planning safety
  • also be carried out for an object already in operation, whereby weaknesses in the concept are selectively identified and detailed measures for optimisation are recommended
  • particularly in the case of a "needy" center or of one which finds itself in a crisis, represent an indispensable basis for revising the concept of the center in order to reposition it within the context of a relaunch.

The specific work programme of such a study can be adapted according to the task assignment and/or specific requirements of the project.

 

Analysis of market position and development perspectives

What kind of market position does an existing center have in its catchment area and/or a specific competitive environment, and how stable is that position? How will that center develop further in the light of factors such as the foreseeable changes in socio-economic parameters within the catchment area


The answers to such questions concerning a shopping or specialised retail center are given in a comprehensive analysis, which includes the following work stages:

  • Center description (location and accessibility factors, area and utilisation concepts, anchor stores, architecture, etc.)
  • Analysis of the relevant competitive situation (incl. evaluation of each competitive location of a specific table of criteria and study of its specific strengths and weaknesses)
  • Catchment area and purchasing power
  • Customer origin and purchasing power utilisation
  • Customer origin and purchasing power utilisation
  • Forecast for the future economic development of the center

The results of such an analysis not only contain essential basic data for the future-oriented further development of a center, but can also be used in communication policies both towards one's own tenants and to new tenants. In addition, these results represent valuable information for a market-appropriate evaluation of the center within the framework of the due diligence usual in a transaction (particularly in the case of so-called "vendor’s due diligenc").

 

Tenant Demand Reports

Besides the suitability of the specific location and the market situation, the economic success of each retail trade plan depends to a significant extent on the attractiveness (to customers) of the range on offer. This applies not only in the case of a new development, but also all the more when revitalising and relaunching a centre which is suffering a crisis. A Tenant Demand Report indicates the quantitative and qualitative demand for area and, thus, the rentability of a location at a very early stage in the development of the project. This not only determines the area sizes, sectors and potential rent levels on the basis of up-to-date and specific feedback from the rental market, but also specifies the precise names of individual retail trade, restaurant and service businesses who are interested in renting a store at a centre. This makes it possible to recognise opportunities and risks early on and to implement necessary measures.

In order to draw up the Tenant Demand Report, a telephone survey of trade chains and / or brand manufacturers is carried out, whereby only decision-makers are targeted (marketing managers, executives in charge of expansion). Information is thereby being continually gathered regarding whether these are basically interested in renting a store at the location under study or whether any reservations exist regarding a given location. Should reservations exist, the reasons and causes are ascertained and documented in the final report. The number of companies surveyed can thereby, at the request of the customer, be set at 25, 50, 75 or 100 chains and/or brand manufacturers operating at the national and international level.

Tenant Demand Reports are drawn up by ecostra for (among other facilities):

  • Retail Parks
  • Shopping Centres
  • Outlet Centres
  • Value Centres

Whereby it is possible to carry out such a study for locations in all European countries.

The result of the study is compiled in the form of a written study report containing a separate profile for each company surveyed, with a detailed record of the telephone conversation, and specifies any concrete interest in renting a store at the location under study. After the completion of the study researches and the presentation of the final report, the customer is free to directly contact those companies who have expressed a concrete interest in rental and, if appropriate, to thereby directly conclude a rental agreement with them. No additional costs will arise for the client as a result, as ecostra only researches the information and provides contact details, but does not directly act as a broker.

 

Image studies, consumer and tenant surveys

What kind of image does an operating shopping or specialised retail center have? How is it seen by the consumer or the tenant? How are competing centers perceived? Does its self-defined target or ideal image correspond to its actual image amongst consumers or tenants? Are customers satisfied with the form and breadth of the product range?

In keeping with the specific task assignment, a coordinated question catalogue is worked out in collaboration with the client. Based on this, a well-grounded and representative image study or consumer/tenant surveys are carried out. This may, as required, take one of the following forms:

  • Face-to-face surveys
  • Written surveys (questionnaires sent by post)
  • Telephone interviews
  • Meetings with "focus groups”

The results are printed out in an annotated report containing not only tables and diagrams, but also, above all, detailed explanations, comments and conclusions. If desired, the results may of course also be presented and elucidated verbally in front of a select group.

 

Feasibility studies for the relaunch of shopping and specialised retail centers

Due to competitive developments, various shopping and specialised retail centers are no longer adequately accepted by the consumer, either because they have an out-of-date design or for some other reason. Symptoms of a crisis are manifest not only in the case of older centers built in the early 70s or 80s, but already in the case of newer centers. This trend is going to get markedly stronger in the future, and will become noticeable in a strong need for revitalisation in the case of a large number of shopping and specialised retail centers.

ecostra conducts extensive, detailed analyses in order to provide a basis for objectively evaluating the situation and future perspective of such a center in crisis:

  • Evaluation of the location factors
  • Analysis of the market situation (competition, catchment area, purchasing power, etc.)
  • Examination of the area and utilisation concept for weak points or deficiencies
  • Potential current and future market penetration
  • Measures and recommendations for a possible relaunch (necessary structural alterations, improvements of customer walkways, optimisation of the mix of sectors and business types, communication policies, etc.)

FallIn the event that the study ascertains that a center no longer has a realistic future perspective as a retail trade location, possibilities for a change in its utilisation are examined and evaluated.

 

Letting analyses

Again and again, when developing shopping centres or comparable forms of large scale retail businesses, it becomes necessary to ensure that the current letting status, the mixture of sectors and business types and the essential key data on the existing leasing contracts are examined within the framework of an expert letting analysis. This particularly applies in cases where the leasing-out and perhaps also the later operation of the centre are not going to be carried out by the developer or investor themselves. In this way, mistakes can be recognised and corrected early on, to ensure a project management that is as optimal, sustainable and yield-oriented as possible.

The contents of an ecostra letting analysis are coordinated with each particular client’s specific project and the need for information. Usually, such an analysis contains the following work steps:

  • Viewing, examination and assessment and / or brief annotation of the existing project documents, such as the location analysis, the area and utilisation concept, the architectural concept, marketing brochure and any other relevant documents
  • Analysis and assessment of the current tenancy status based on quantitative experience gathered from comparable projects. The points dealt with here include the preleasing level, any letters of interest (LOI) that may exist, the relevant key business data of the leasing agreements concluded up to now (the size of the basic / turnover rent and of the service & marketing contribution agreed upon in each case, the validity periods, incentives, internal turnover estimates, etc.), the mixture of sectors and business types foreseeable to date, together with the identification of potential deficiencies, specific arrangement of terms for magnet or anchor stores, etc.
  • Estimation of the further developmental perspective of the project, including a prognosis of the potential leasing progress (benchmarks up to the date of opening), determination of the necessary "critical mass” or degree of utilisation at the date of opening, market-feasible average sales area rental price of the project and the achievable yields (in the 1st - 5th years of operation respectively)
  • Determination of market-driven operational measures for optimising tenancy and the mixture of sectors and tenants. This includes recommendations for an information and communication policy, how to address tenants, the use of incentives, etc.
  • Measures and recommendations for a possible relaunch (necessary structural alterations, improvements of customer walkways, optimisation of the mix of sectors and business types, communication policies, etc.)

The results of the examination are compiled in a written report and discussed in detail with the client. On request, ecostra can also provide advisory support during the further developmental stages of the project.


Subscribe to the Experts Letter

Registered users receive the ecostra free publications -
such as the "expert letter" and the market overview
"Outlet Centers in Europe" - each directly
immediately after the new issue is published
sent via email as a download link.

If you want to subscribe to the ecostra free publications,
you can enter your data in the form fields below.
The subscription is of course free of charge
and can be canceled by you at any time.

    Please prove you are human by selecting the Key.