Even with the availability and easier access to data via the internet, the retail lease holder is still well behind where they need to be in order to put themselves in the best position to get the best possible lease deal for one of the most crucial cost factors in their business.

As I enter my 20th year in business, supporting retailers in all facets of retail leasing and the challenges inherit in the Lessee/Lessor relationship, it is time to reflect where the industry is at and how it has evolved.

Although the internet was up and running, retailers may have had an email address but were still ordering stock via fax, and deals were done face to face or over the phone, and documents were exchanged by facsimile or express post. (document couriers were still in existence).

Smart phones weren’t heard of and social media consisted of the Society Pages in the Saturday Newspaper, but Australia’s first shopping centre was about to turn 40 and the Shopping Centre Management industry was hitting its prime.

Centre Managers were more highly regarded than leasing executives (certainly by salary) and relationships between retailers and landlords was far more personal, today we constantly hear clients who have barely met their Centre Manager but know the mobile number of the Leasing agent.

Information Gap Still As Prevalent Today

What hasn’t changed in 20 years, is the information gap regarding data surrounding retail leases and real estate performance between retailers and landlords, in fact this void has significantly widened as technology has expediently exploded.

And landlords have applied their superior resources to leverage their position manifestly.

Although retailers have certainly lifted their game when it comes to collating lease data and intelligence, the practices of how they apply this information and their strategic planning has not.

When I leapt over from the ‘dark side’ 20 years ago there was at best a handful of retailer lease advocates, and wanted to ensure we remained relevant and transparent through aligning ourselves with Retailer/Industry Associations. Now there are probably upwards of a hundred, most of whom have evolved into the role within their group or brand without any real depth of experience, which has invariably lead to the old ways of doing business (negotiating a retail lease) being passed down the line and reflects the outcomes we see across the market currently.

A Poor Lease Deal Can Have a Decade+ Impact

Everyday my team comes to me with yet another lease benchmark review which is the result of a poor lease deal done 5-10 years ago, and the compounding effects has overtime fractured the sensitive retail equation.

The world is full of Monday morning half-backs, who tell everyone who will listen how they would have made the play to get the winning result. When it comes to retail leases these halfbacks usually dust themselves off as experts every five or so years and believe their last deal was always the best available (time usually brings them unstuck – but are too proud to admit it) or are employed to maintain (and grow) a group or brands number of sites, at someone else’s expense – yours! (How else has retail property continued to remain the investment poster child for funds managers?)

It’s not enough that we have made significant changes to Retail (Shop) Lease legislation in every State & Territory to improve the rights of Lessees, but we still have retailers making the same fundamental and hugely costly mistakes. The profession of managing, and strategically leveraging the numerous commercial terms to deliver the right outcome to a retail investment that adds value (to the retailer - you know, the person who pays the bills) must change from just delivering a deal to taking the responsibility of future proofing the Retailer/ Lessee (the Client) to the next Lease event/renewal (and even the one after that).

It is not hard to scan the news headlines for the past 12 months and see the number of retail failures to realize that we don’t have another 20 years to deliver this transformation.

Unquestionably, along side your franchise agreement, your most important contract – The Lease, and the way it is often negotiated and managed, these attitudes are stuck in the past. (while change is happening right before our eyes)

A New Approach to Managing Your Lease

I am unashamedly open about my desire to get retailers involved in what we do. I am passionate in my belief that our ‘New Rules of Leasing’ is long overdue, the time has come to invest in not only delivering the right outcomes but to change the mind set of Retailers/Lessees and industry stakeholders to level the playing field not just for the deal done today but for the future.

MiLease-New Rules of Leasing is a program to not only deliver outcomes but to provide the tools and mentoring to bring about a mindset change in how Leases are treated as assets, how relationships can be developed and how to successfully negotiate for the future.
As Albert Einstein is quoted…”Insanity is doing the same thing over and over again while expecting a different result” let’s stop
the insanity?