Leasing premises today is a more profitable business than manufacturing, so more and more entrepreneurs prefer to earn in this way. The most difficult thing in such an enterprise is to find a suitable anchor tenant. Let's find out what this phrase means and what features this type of rental has.
Who are the tenants
Before defining an anchor tenant, it is worth remembering who is called a tenant. This is an individual or legal entity that enters into a written agreement with the owner of the building (or other property) for the right to use it. In return, the tenant is obligated to pay financial compensation to the owner. Its size and frequency of payments are specified in the contract.
In addition to residential and non-residential premises, you can rent equipment, land, vehicles and even entire enterprises. By the way, renting out various things is called a rental.
Types of tenants
If we take into account precisely the tenants of the retail space, then, as a rule, there are three types of them:
- Ordinary tenant. In most cases, he rents a small area , and therefore, brings a very modest profit.
- Subtenant Sometimes the leased area is too much for one company. Therefore, the "excess" space retake to smaller organizations. It often happens that tenants get more profit on sublease than their outlet located on the remaining territory.
- Anchor tenant. The most coveted “client” for the owners of shopping centers. Why? Let's consider.
Anchor tenant: what is it
To better understand the essence of such a lease, it is worth recalling the history of the appearance of shopping centers.
Since the cost of land on the outskirts of cities and beyond has always been lower, it was always more profitable to build shops there. There was one problem: how to attract buyers? After all, to get there, you need to spend more time and effort than just go to the store near your own home or work.
To solve this problem, preparing to open another shopping center, they began to hand over the territory in it to stores with unique products or very cheap . It was they who became the magnet that attracted customers to the mall. Such tenants, who actually served as advertisements for the entire complex, were called anchor. It is on their availability that the profitability of a shopping center depends.
Features of this type of rental
By what special features can anchor tenants be recognized in shopping and entertainment centers (shopping and entertainment centers)?
- On average, they occupy from 5 to 15 percent of the total area of premises. The maximum amount of the territory they rent is no more than 50 % .
- It is these stores (or institutions providing other services) that, as a rule, attract the majority of customers to the shopping center, so their advertising can be found everywhere in the mall.
- Often the place of the anchor tenant in the mall is located on the second, third floor (or in other less attractive places). This is done so that, reaching them, a potential buyer can get acquainted with the products of lesser-known stores. For such a kind of advertising, the landlord usually makes the agreed discount to the tenant or provides him with other benefits.
- As a rule, such a point of sale provides a wide range of products at attractive prices for customers. Therefore, most often anchor tenants of shopping centers are various supermarkets. Their most common specialization is products, chemicals or household appliances. Sometimes there may be several at once: for example, on the ground floor there is a grocery supermarket, and on the third floor there is a household appliance. The second floor and empty spaces on the other two are distributed between small narrowly specialized shops and offices.
Benefits of anchor rentals for mall owners
Recently, building owners have increasingly preferred to have as many “anchors” among their clients as possible. Why so?
- First of all, they attract customers on their own, providing greater popularity to other stores of the shopping center.
- The owner of the building spends less on advertising his premises, since the anchor tenant independently conducts his own marketing campaign. By the way, sometimes he himself paying for the design of the facade of the building, or at least part of it.
- Such a tenant brings more profit than small retail outlets. By the way, there are times when the landlord does not even receive a fee for the area of the used premises and utilities, but a percentage of the total revenue of the company.
- The presence of a particularly successful “anchor” allows the owner of the building to increase rents to smaller retail outlets, whose consumer flow increases at his expense .
What are the benefits of an anchor tenant?
Becoming an “anchor”, the tenant also rarely remains unpaid and receives certain benefits.
- When choosing the location of your point in a shopping center, it has advantages compared to small shops.
- It receives preferential rental conditions due to its special status.
- The facade, as a rule, primarily places the logo or advertisement of the anchor tenant.
Unfortunately, the marketing strategy based on anchor rent is far from always successful. There are cases when well-advertised outlets became bankrupt, and the owner of the mall had to search again for a new “anchor”. Therefore, along with a host of advantages (compared to other tenants of the premises), the anchor also significantly risks it. While the lessor will still remain in financial gain.
Types of "anchors"
It is worth noting that the anchor tenant is not always a store. It is clear that the main goal of any outlet is to make a profit, but often such customers do not specialize in direct sales, but in the provision of certain services. Knowing this, we can distinguish the main types of "anchors".
- Supermarkets In most cases, they are the anchor tenants of shopping centers. A list of such points can be listed by anyone who has been at least in a small shopping center . Although most often these are grocery supermarkets, sometimes they may have a different specialization. For example, sell clothing, building materials, or machinery.
- Gyms, fitness centers and similar establishments are often anchor tenants.
- Schools. Of course, they are not as widespread and profitable as the first two species, but in some cases they are the “anchors”. Typically, these are private courses in the study of foreign languages, schools of hairdressers, cosmetologists, masters of manicure and pedicure, etc.
- Entertaining complexes. One of the most common types of "anchors" after supermarkets. These can be ice rinks, cinemas, pools, bowling alleys, saunas, etc. As a rule, they are very convenient for landlords, because around them you can place numerous restaurants or shops selling appropriate equipment (for example, bathing accessories near pools, ice skates - near ice rinks , towels and soaps with shampoos near saunas).
Examples of anchors
In order to better understand the essence of the concept under consideration, we consider several shopping centers in the city of Moscow.
For example, take the famous shopping center "Schelkovo". Despite the fact that it has only two floors, more than two hundred outlets are freely placed on them. At the same time, the main anchors are Baskin Robins (children's attractions and cafeteria), Real hypermarket and Centerfilm cinema. All these places are distributed throughout the shopping center in such a way as to attract visitors to less popular points.
Another example is the Gagarinsky shopping center. It is interesting that, in addition to standard "anchors" in the form of Auchan and Sportmaster hypermarkets, as well as branded clothing stores, jewelry and cosmetics, its advantage is its close location near the metro.
The considered short list of anchor tenants will be incomplete if we do not mention the legendary GUM and TSUM, which in themselves have been “anchors” for many buyers since the beginning of the 20th century.
For this reason, the Central Department Store exists not only in Moscow, but also in Kiev and Minsk.
Why today there are problems with the "anchors"
In the modern world, shopping centers are no longer a rarity. If ten years ago in small towns there were one or two each, today today there are an average of five such places in a settlement with a population of about 60-80 thousand.
If we talk about big cities or megacities, then the number of shopping centers in their tens. All of them are usually quite similar to each other, as are their “anchors”. Usually these are supermarkets or fitness rooms, restaurants. Sometimes shops of inexpensive branded clothing (as, for example, in the Moscow GUM).
In this regard, there is serious competition between the malls, especially those located in one district, so building owners are forced to look for unusual anchor tenants to make their shopping complex stand out from the others. However, in smaller cities it’s more difficult to find.
Indeed, for example, the same ice rink, cinema or pool is a rather expensive enterprise, and in small towns it simply will not pay off. In this regard, landlords are forced to come up with other ways to attract buyers. Therefore, today the anchor system is gradually becoming obsolete. Unfortunately, a worthy alternative to it has not yet been invented.