A revised business strategy + creative thinking = success during Covid for EPG's Retail Division
Category News
Retail is an everchanging environment. A sudden change in "everyday life" can result in a major shift in how retail functions and delivers. No one understands this better - particularly over the last year ― than the Retail Division team at Eris Property Group (EPG).
"Understandably, the retail and restaurant sector as a whole has suffered during the pandemic," explains Michelle Small, Senior Retail Leasing Manager at EPG. "Stores closing, tenant performance and keeping up with rental payments have been some of the biggest challenges. Retail Development Projects have also been delayed or cancelled," she adds.
Despite this, however, EPG's Retail Division has had various successes over the last year ― no small feat. "Our Retail Division has had to adapt its business model and revise our strategy going forward" explains Small. "We had to become more creative with how deals are structured and incorporate new trends into the retail environment, such as online shopping," she says. "During the pandemic especially, we as a division were fortunate, as we had minimal 'casualties' in our existing centres, plus were able to open a new centre: Chuma Mall in Diepsloot," adds Small. The team has also positively moved forward with the construction of Sarona City Mall in Botswana (private client - EPG leasing agent), which will open later in the year. They have also been able to place various new tenants in existing centres, as well as extend and/ or refurb two of their existing centres: Taung Mall and Silver Mall.
"Opening a centre in the midst of a pandemic was no small task for EPG", comments Bruce Krog, Senior Retail Leasing Manager at EPG. "This has certainly highlighted the fact that a retail centre can only be successful if the community that it serves forms part of the development from its inception," he says.
"The opening of Chuma Mall highlighted the need for similar developments in communities that need it. Future retail development projects that our team is currently focusing on include developments in Oudtshoorn, Coega, Umgeni in Durban and the redevelopment of Cape Station," adds Krog.
Various key retail trends have come out of the Covid-19 pandemic:
-All aspects of retail have had to become more innovative in terms of leasing and marketing of space.
-Online shopping has become a growing industry over this period with many retailers introducing the offering for the first time.
-The pandemic has also introduced the likes of "dark kitchens" due to the limitations and restrictions which were placed on the restaurants and deliveries.
-Consumers are shopping mindfully and cost-consciously, with demand for local, sustainable and value brands rising.
-New global consumer research shows that the home continues to be the focus for living, working and shopping (despite restrictions lifting).
-Consumers' personal situations are influencing attitudes and behavior, including levels of comfort venturing out.
-The recent surge in digital and omnichannel adoption (shopping online) particularly among new or infrequent users, looks set to continue.
"These key trends have taught us as a Retail Division to work on strategies with our tenants. Apart from rental concessions, we looked at ways to either upgrade their stores, partner on marketing activities, relook at their locations and/ or their offering as whole," says Krog.
Landlords and tenants have had to implement big changes, which will continue to affect the entire industry. They have had to optimise on space, plus provide for additional costs to comply with Covid regulations within shopping centres and stores - this has had an impact on income. Business has had to learn to adapt the service and offering to cater for social distancing needs and still try to provide a safe and healthy shopping experience.
Restaurants and food services have also had to rethink the way forward in terms of their business survival. Retailers have started to re-evaluate their space needs ― and in certain instances, negotiated with landlords to reset rentals ― in order to keep the business sustainable. Customers have opted for a more open environment than to be restricted to indoor malls. "Tenants have also had to think about more innovative ideas to enhance their business offerings and shopping experiences - this will no doubt continue going forward," concludes Small.
The EPG Retail Division team offers a range of retail related services to developers (internal and external), landlords and tenants. By understanding the nature of retail property, they aim to unlock potential by tapping into their vast resources and intellectual capital. Besides the standard retail leasing function, the team gets involved in leasing from start to finish.
The EPG Retail Division offers various services, including:
- Advice on specific tenant mix for new and existing developments
(eg. design & layout plans; income & rental level projections; practical tenant mix advice).
- Market the relevant project through their standard Eris communication network to tenants and other potential interested parties.
- Assist with summarising the Retail Feasibility Study of the project or property:
(eg. demographic analysis; retail competitive market analysis; spending power).
- Communicate with the professional team to ensure positive feasibility projection of the project with reference to rental levels and tenant installation expenses.
- Assist the professional team and the tenant co-ordinator with a tenant liaison in order to address any potential development related issues.
- Assist with the smooth and timeous occupation by the tenants of their leased premises.
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Author: Eris
