A location analysis is performed to assess on a preliminary basis the potential of a certain site to welcome a successful retail asset. The location analysis is a short report including:
Analyze endogenous and exogenous factors.
a description of the site highlighting endogenous and exogenous factors
that may contribute to the success of the proposed mall (office hub,
tourist hub, student hub, natural, physical and cultural barriers,
driving, walking and accessibility through public transportation,
site visibility, other perceived attributes as
a description of the isochrones (drive-time or walking time or both
as reasonable) to assess the market potential in terms of inhabitants
and retail/leisure consumption;
a description of the existing retail/leisure competition reporting
distance towards the site, tot GLA, number of units, anchor stores,
footfall (as available), sales (as available) and more attributes as
Dimensioning or Performance Forecast
If the dimension is unknown: the exercise determines the ideal size of the project to maximize visits per sqm, sales per sqm, rent per sqm or to simply create competitive advantages beyond economics in a defensive strategy. The gravity model estimates the annual visits of the proposed development under different GLA scenarios enabling visits per sqm benchmarks. The statistical model estimates sales potential taking into account annual traffic and sales per visit at different GLA scenarios enabling sales per sqm benchmarks. All different GLA scenario are exploded into GLA programs with certain assumptions on mix and effort rates to estimate rental income enabling rents per sqm benchmarks. It is possible that one scenario with lower rents per sqm is more suitable than one scenario with higher rents per sqm due to the presence of leisure activities that would generate a competitive advantage even if paying lower occupancy costs.
If the dimension is known (fixed): the exercise is to estimate the potential annual visits for the proposed development and the related tenants’ sales potential. The GLA program is elaborated based on a market gap analysis taking into account the existing supply and industry benchmarks on average sales densities per merchandising category. The application of suitable effort rates to the sales estimation by merchandising category determine the occupancy costs potential. The rental income is part of the overall occupancy costs that are also usually estimated using industry benchmarks.
The positioning of a shopping centre is very relevant and especially in highly competitive market. The analysis entails extensive consumer surveys to determine the target audience and elaborate what should be the shopping centre attributes to address marketing, leasing and design strategies.
Often, UrbiStat is requested to coordinate the consumer survey process and to engage the different stakeholders (property manager, development manager, landlord, design manager, leasing manager, marketing manager) with workshops to share and reach an alignment on the vision related to the market positioning taking into account the extensive analysis of demand (consumers) and supply (competition).