Shopping Centres : A Tenant’s Perspective

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Shopping Centres in South Africa are two for a penny. Some soothsayers claim that there are too many, that the Retail sector is overtraded.

Unfortunately, I am not suitably qualified to express an opinion on this, so I won’t go down that road if you don’t mind, except to say that it is an extremely competitive market sector.

However, in saying that, from experience, my common sense tells me that the success or failure of any shopping centre is directly related to the standard of operational input and delivery rendered by the management team.

In a nut shell, poor delivery will result in dissatisfied tenants, who, in turn, may even cancel their leases. This will lead to high vacancy rates which, of course, is clearly detrimental to (rental) income, thus affecting the overall capital value of the shopping centre.

In my view, Airconditioning plays a leading and crucial role in achieving tenant satisfaction. As such, it demands constant and on-going attention with regards to the workspace (space management).

To understand this, it is important to realise that Airconditioning is an extremely perplexing engineering discipline, giving rise to opportunism risk.

This level of expertise requires on finding the right skills and not simply fulfilling a short-term cost saving solution.

Any thoughts along these lines will prove disastrous, leading to poor decisions, unnecessary expenditure and very soon, dissatisfied tenants.

A properly managed Airconditioning system will ensure one less major tenant complaint to contend with.

Probably the best way of approaching the subject is to outsource the entire Airconditioning facility to a recognised professional in the field, thereby, building a relationship on trust and expertise. By doing so, accountability will be improved, operational flexibility achieved, access to specialised information made available, with overall cost savings as a direct result of an independent partnership.

However, be aware of the pitfalls associated with outsourcing if the right provider is not selected for the process. A service provider simply intent on winning the contract at all costs, may not live up to the client’s expectations, resulting in catastrophic consequences and leading to the facilities not being correctly managed.

Nevertheless, a professionally managed Airconditioning portfolio will add value to the overall shopping centre package, by reducing the management burden, overcoming skills shortage, improving ccountability, and ensuring optimum equipment replacement life.

Patrick Burke FSAIRAC
RPM Consulting Engineers

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