At a time when shoppers demand anything at any given time, subsectors such as outlet retail can be resilient but cannot risk being complacent. At Realm, a clear focus on the shopper experience, as well as being collaborative and agile in our retailer relations, is the foundation of the innovative management that Ian Kitchen alluded to in his recent letter.
The turnover lease model, which outlet retail is largely based on, gives us a different, holistic approach to managing a scheme and is one of the ways in which the sector has remained resilient.
Turnover leases are not only popular with retailers but put us on the front foot when overseeing and managing the schemes to drive optimum performance for our retail partners and landlords alike.
The structure of the leases and management systems provides us with daily sales performance data (provided on a weekly basis) so we know what is working and, importantly, what isn’t.
Beyond the turnover lease structure, it is a genuine partnership approach between landlord and retailer that is necessary to ensure success. Knowledge of a prospective retailer’s business and proposed plans for the unit is vital and communication is key.
On the ground, our centre manager teams are in regular communication with our retail partners and work with them on their shop layout, stock packages, merchandising and general store performance to ensure that together we can achieve maximum sales.
This means we can spot the warning signs of a struggling retailer and intervene as early as possible. When talking to tenants, we not only discuss how a unit is performing, but what is going on elsewhere for the company, giving us the whole picture. This is a collaborative process for both parties and transparency is key in building a strong partnership.
The turnover lease structure is pivotal in providing a platform to build a strong relationship between a landlord and tenant, which in turn leads to proactive asset management and investment as both parties have a vested interest in the success of a store. This naturally generates high-quality assets as all parties work together to create a desirable customer experience of the type Realm provides.