Solving the ideal tenant mix puzzle for a proposed shopping centre: a practical research methodology

Abstract

Tenants generate the income for a shopping centre and the value of this type of retail property to the property owner or landlord thus depends on the forecast of consumer demand for the products or services sold by tenants. Through balanced tenancy, the stores in a planned shopping centre complement each other in the quality and variety of their product offerings, and the kind and number of stores are linked to the overall needs of the surrounding population in the centre’s catchment areas. Whereas there is frequent reference in retailing literature to the importance of tenant mix for shopping centres, published research about the so‐called “ideal” tenant mix is almost non‐existent. Aims to rectify this situation partially and suggests a practical research method using a consumer preference weighting methodology based on three parameters, namely tenant category preference, tenant category ranking preference, and tenant shopping likelihood, consolidated into a single composite tenant choice index. The emphasis is on describing the logic of the research methodology, using a real‐life example of a planned‐to‐be‐erected shopping centre in South Africa, but due regard is given throughout to the relevant theoretical underpinnings in order to also contribute to this aspect of the young science.