MAPIC Non-retail tenants boost shopping centre performance

Non-retail tenants - including food and beverage (F&B) operators, leisure and community amenities – help boost the performance as well as the rental values of shopping centres, according to a new study published by the Urban Land Institute (ULI) and JLL.

The report, which analyses the performance of 12 shopping centres in Europe over the past 12 months, shows that non-retail occupiers led to 28% estimated rental value growth, a 7.24% increase in footfall and a 1% decrease in vacancy rates.

'It’s now more important than ever that shopping centres provide that exciting, innovative space that people want to come to, spend time and money in, and return to,' commented Christian Luft, director of valuation advisory at JLL. 'The survey’s findings are encouraging and build on what we found last year, that non-retail offerings add value to modern shopping centres. Getting the tenant mix right helps to create successful retail destinations which thrive, benefitting consumers, retailers and landlords alike.'

The report - Trading Up: Dining, leisure, amenities, and the new shopping centre - also draws on insights from interviews with industry experts, as well as a survey of ULI members working in the retail sector.

58% of the survey respondents reported that the addition of F&B, leisure, and community amenities has had a positive impact on the financial performance of shopping centres. As in last year’s survey, respondents indicated that increased dwell time (the time a consumer spends in a centre) and footfall are the two most important contributions non-retail offerings can make to shopping centres. However, this year’s survey found non-retail tenants’ roles in supporting overall retail sales and rental income to be almost equally important.  This suggests that there are increasing expectations around how non-retail tenants can contribute to a shopping centre’s bottom line.

'Over the past year or so, we have seen how F&B, leisure, and community amenities have become such a strong focus of attention in the industry – from the perspective of the landlord to that of the operator,' said Chris Igwe, co-chair of the ULI Europe Retail and Entertainment Council.


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