A new game plan for the retail real estate businesses
Writen by Ángela ·
Talent growth, sustainability, technological advancements, economic uncertainty, and location could all add up to the challenges of a retail realtor. Focusing on the challenges that we discussed in the previous blog post, we will see the two of the many solutions offered by Geoblink to overcome them.
Spotting the right location
Location is an indisputable component in a commercial real estate. But how do you arrive at the right one? This can be backed by knowing the demographics of the specific location.
Let’s for an example say you would like to establish a medium size commercial center in Las Tablas, Madrid, Spain. (Area chosen within a 15-minute walking distance from the centre point in Las Tablas).
The following demographics could bolster your decision of choosing this location:
- The disposable income per household: 53,150€ (this is above the average disposable income reported by OECD Better Life Index)
- The transactionality is very high in this area with 2,897,602 transactions and an average ticket of 24€. Of all the transactions, 62.9% i.e., 1,821,347 transactions go toward spending on Bars & Restaurants.
- The area under study shows the spending capabilities are quite evident among both men and women. But, women of ages between 35 and 44, 45 and 54, spend more than the men from similar age brackets.
The transactions are typically more active between 10.00hrs and 20.00hrs, with more transactions reported at 14.00 hrs. (17% of total transactions)
The franchise business has a positive outlook in the coming years. But there are few problems associated with the franchisor in choosing the franchisee. Also, what is location document and why is it the next critical business tool?
Identifying your competitor’s geography
This stands as a critical factor in almost all the businesses from small to large enterprises. Let’s take another example. You are planning to buy or rent a commercial space in Los Berrocales Del Jarama to bring in a mall or a big retail store.
Now you are analysing the area for potential competitors. In can be deduced from the application that there exists many commercial stores and shopping malls dotting the selected area. To note, it is in between Plenilunio and Parque Corredor. You also can decipher from the application what stores are internally present within the mall.
Comparing the sector distribution in the two identified commercial centres, we can infer the following sectors occupying the top 3 positions in the 2 malls:
The realtors who are planning to set up a mall or a commercial centre in this area, can make use of the above details to ward-off the difficulties from similar competitions. i.e., if you intend to open a mall with a lot of retail stores than restaurants, then the decision might pose a problem since there are already two malls existing in proximity to your location offering the same in higher quantity. Therefore, a different marketing and business strategies can be constructed.
Also, you are planning to establish a mall on a Gross Leasable Area (GLA) of more than 50,000 sqm. Hence, you would like to know how many commercial centres already exist in the Madrid municipality with this measurement and also with GLA less than 50,000 sqm.
From the application: it can be seen that there are 17 shopping centres with GLA < 50,000 sqm and 4 centres with GLA > 50,000 sqm.
So, the integration of Geoblink into the retail real estate sectors can be of greater help in:
- Analysing unique investment opportunities instantly.
- Fending off the pressures from competitors with solid and granular data in hand.
- Enriching your communication and marketing strategies in the new location
The central factor in all this is location. The location that you choose today will not be of trend or of the same fame tomorrow. Henceforth, a long term vision is required to be gained along with the initial site selection process. Taking Spain market into account, the commercial investments in Madrid have been doing around well since 2014, reported Knight frank.
Also, the investments in Madrid rose to USD 10 million, i.e., a 5% increase from the previous year’s data. Thus, by correlating location analytics with the optimistic speculation of the retail real estate in Spain, the realtors are only walking towards a successful investment.