July 23, 2024
Ep54 Leaving shopping centres & food courts for more profitable strip malls, with Ange Kondos
Is a foot high traffic shopping centre is the best place for a business? Ange Kondos is an expert in determining the answer to this question for many.
“Business has become so hard, so prohibitive, so costly I can see true entrepreneurs taking to the strips.”
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In Episode 54 - Our discussion came about following seeing a LinkedIn post by Ange where he highlighted the deal numbers and performance attributes of a food business in a strip mall location.
Comparing it to some typical lease circumstances faced in a high traffic major shopping centre location, we thought the scenarios was worth digging a lot deeper into.
The key factors of the business focus on;
- Rent $50-$60k - no penalty for succeeding,
- Sales - who cares but probably over $2mil p/a,
- Fit-out costs circa $120-$130k and no interference by teams of shopping centre designers,
- NO ‘obscene’ Cat1 costs to endure
- They have a life as they trade 6 days according to customer opportunity,
- No further charges if trading late,
- ROI under 6 months and goodwill created in the business.
Ange has some very firm opinions on the circumstances of leasing and food retail in particular in the market.
0:00 Intro
0:23 What LeaseWise does - property tenants advocacy for managing retail property portfolios
1:54 A LinkedIn post by Ange a while ago highlighting key points on strip mall profitability
2:45 What Ange is seeing in the market in shopping centre v strip malls at present
4:00 Shopping centres have been spoilt for choice as centre owner and now a shift by many to drive thru
5:10 The impact of a bad decision in a shopping mall v strip site with lower rent
5:50 The LinkedIn post example of Luke’s Viet Rolls, Puckle Street Moonee Ponds
6:15 Rent and no penalty for succeeding in strip mall leasing
8:15 Achieving great sales on low rent makes it all work for the business
9:32 Fit-out costs and shopping centres demanding too much expense for no reason
13:01 Category 1 costs at zero $, as opposed to ‘obscene’ in shopping centres
15:24 Strip mall having little requirements on you to trade at specific times, unlike a shopping centre enforcing certain hours
18:48 No extra charges for trading late in a strip mall as opposed to a shopping centre where they often require to pay more costs pro-rata
19:46 ROI being created faster quite often in a strip mall, and particularly in this example with significant goodwill advantage
21:16 Shopping malls seeing an operator doing well and seeing that as an opportunity to add another competing in the same category
21:43 True entrepreneurs taking to the strip malls into the future, particularly those that don’t need complimentary brands around them
23:45 The message is not ‘no shopping centres at all’ but to be very aware and well-advised
24:39 Don’t underestimate the power ‘no’ in leasing deals
25:03 Wrap-up
Podcast Produced by: magnetic business media
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