For many small businesses and start-ups that operate in the retail space, renting a retail unit is a major step in the growth, giving a business more opportunity to attract new customers, show its products, create a ‘home’, and boost its visibility and branding. It can also help a business to integrate into the local community and speak to customers face-to-face.
For small businesses that were previously operating out of a home, moving into a retail unit can also mean getting a lot of extra personal space back, as well as the ability to separate home and work more easily.
As a retailer, there are a number of different options available for renting a retail unit, and one of them is in a shopping centre. Renting in a shopping centre is different from renting in a high street, and in this article, we are going to take a look at some of the considerations that should be made by a retail business looking to rent a retail space.
Renting a Retail Unit in a Shopping Centre Vs High Street
There are different benefits to renting a commercial unit in a shopping centre compared to on the high street.
Renting in a Shopping Centre
Shopping centres are often (although not always) located out of town, meaning that they become a shopping destination with potential customers often spending a number of hours there.
Some of the considerations to renting a retail space in a shopping centre include:
• They can be convenient in terms of parking, deliveries, and getting food in a space that is designed to be convenient for the business and the customers.
• Renting a retail unit in a shopping centre means that your business will be closer to other, possibly larger brands, helping you to maximise these opportunities. However, it also means that you have competition from existing brands and could also be impacted by the reputation of the other shops that are located within the same shopping centre.
• Rents can often be lower due to the shopping centre’s out-of-town location (if applicable!).
• Unless it is a shopping centre that has a very high demand for space, some shopping centres can offer more flexibility in terms of the unit size and shape available.
Competition can be a great factor in terms of choosing a shopping centre unit. It is important to consider the other shops that are also located there to ensure that you have somewhere that the competition can help you, without ‘drowning you out’. You should also consider how well the shopping centre is attracting your target customers. It would not necessarily be useful, for example, to rent a retail unit in a shopping centre with shops aimed at young people looking for inexpensive clothes, if you are a small boutique clothes shop aiming at more affluent, older people.
Renting on a High Street
The other major alternative is to rent a retail unit on the high street, in a town centre. These tend to be more places where customers ‘pop in’, often spending less time in the vicinity.
Some of the aspects that should be considered if you are thinking of renting a unit on the high street include:
• Depending on the high street, there is more opportunity for good footfall at all times of the week. Other local businesses would help to create a bustling high street on weekdays as well as the weekends (unlike a shopping centre, where most of the footfall will be at the weekend).
• There are fewer large chain shops on the high street, which usually attract smaller, and often more independent businesses. Being amongst like-minded, similar-sized businesses can help to attract your target customer.
• Many shoppers admit to preferring to shop in the hustle and bustle of a high street, compared to the more sterile atmosphere of a shopping centre, looking to engage with smaller businesses, independent cafes, and other local activities that are going on (especially in the summer).
• Public transport to the high street is usually pretty good (especially for towns outside of the big cities). This gives more options for customers who don’t drive.
• Potential customers can be more varied – unlike shopping centre ‘destination shoppers’, the high street can also be home to offices, houses, tourists, etc.
Renting a Unit is a Shopping Centre
Here at Boxpod, we have a range of different retail units to rent across the UK, in a range of different locations. If, however, you are looking for a unit in a shopping centre, there are some aspects that are different when it comes to the lease and its impact on the business.
Some of the aspects that you will need to think about if you are looking at leasing a retail unit in a shopping centre include:
• The lease term and your options for renewal. Shopping centres normally operate on relatively long-term leases – typically between five and ten years. Make sure that you consider this before you rent, and check the renewal options as well, in case you decide that you want to stay for longer. Consider the termination clauses as well – how easy is it to get out of if the economy takes a turn for the worse, do you have break clauses, for example?
• There can be additional costs in a shopping centre. Of course, rent will need to be paid, but you will also need to pay rates, probably a service charge (cleaning, security, lighting, heating, toilets, etc.), sometimes a percentage rent is paid (where a percentage of turnover is also paid), and deposits.
• It is sometimes the case that a business can add an exclusivity clause – if you are worried about direct competitors moving into the same shopping centre, which could impact your sales, you could consider asking for an exclusivity clause to prevent this.
• Many shopping centres have requirements relating to the visual impact and fitting out of the space, so make sure that you are aware of this, and its costs before you take on the lease.
• If it is the case that you need to shut your shop for a certain amount of time, check whether you will be still required to pay rent, or whether you can add in a rent cessor.
• Ensure that you are clear about who is responsible for repairs and maintenance.
Final Thoughts
Different retail units work for different retail businesses, and for some, a shopping centre location would be the best place for them. For others, the high street would be a better option.
It is important that you thoroughly research where you are looking to base your business, in terms of the business benefits for you, as well as the financial impact on your business.
Here at Boxpod, we have a wonderful collection of retail units for rent, so if you are a business looking for a space to show and sell your wares, why not take a look at our website and see what we have to offer?
We can also list your commercial unit if you are a landlord looking for new tenants, so get in touch with us today!