The Importance of Tenant Mix in Shopping Centers

The Importance of Tenant Mix in Shopping Centers

The Importance of Tenant Mix in Shopping Centers

A tenant mix is a collection of tenants who converge in one area, like a commercial retail property, to conduct business. It is a common strategy used by retail property owners and managers to enhance the effectiveness and efficiency of their business. They control the retail centers through a well-thought selection of tenants for the best possible mix of services, which are perfect for that particular area.

The tenants benefit from doing business together by taking advantage of the high traffic and complimentary services from their counterparts. The aim is to maximize sales and profits for each occupant through the synergy brought about by their different yet supportive services. On the other hand, they create a conducive shopping environment for customers.

Since these mixes provide services that complement, rather than compete against each other, all tenants enjoy a consistent flow of customers and revenue. Customers also get to enjoy a variety of products and services from the convenience of one location. Even so, for optimal benefits to both the customers and the traders, significant considerations go into getting the right combinations.

Below are some other benefits of Tenant mixing.

Profit Maximization 

Working with other establishments creates synergy, which benefits the owner, store operators, and the customers. The property owner shapes the market by observing common trends that appeal to that location. They also consider tenants who can work well together to improve the center’s image.

This creates an opportunity for better sales and profits for the tenants. With a variety of goods and services are chosen carefully to attract the interest of the shopping community in the area, a large number of customers will frequent the center. This is because of the convenience of getting all their needs under the same roof.

The high traffic of shoppers attracts new customers to the different stores, thus, improving sales and profitability of the individual businesses. In addition, since rampant competition is discouraged in these establishments, being the only or one of the few suppliers of a particular product or service will prove profitable in the long run. Some of the most common businesses in such establishments include restaurants, grocery stores, fashion wear stores, and leisure activities, including gyms and cinemas.

Increased Sales

There are many reasons why tenant mixing leads to increased sales. This is as discussed below.

Comparison Shopping

Mostly purchased for durable usage, comparison goods are purchased irregularly. The features that attract customers to these goods include quality, style, and suitability. Examples include clothing, furniture, footwear, household items, and jewelry. To increase sales, most owners prefer to cluster businesses selling comparable goods close to one another.

That way, they tend to attract customers who prefer making comparisons before settling on a particular choice. In other words, it motivates shoppers who prefer comparing the same class goods from different stores to visit a shopping complex that offers options for comparison.

Two adjacent establishments dealing with comparable goods will complement each other and improve their sales based on the interchange of the high traffic customers between them. For maximum profits, it is paramount to consider the location and tenant mix of comparison goods stores within a shopping center.

Convenience Goods

Convenience goods are those products purchased regularly. As such, the location has to factor in with care to enhance convenience when shopping. Convenience goods include foods, drinks, and groceries. Having the parade shops that sell these merchandise strategically set attracts high numbers of potential customers who move from shop to shop buying their stuff.

Anchor Tenant

Retail property investors design their grounds with the main focus being an attractive anchor tenant. Anchor tenants are renowned brands and can generate high traffic on their own. They attract high numbers of shoppers because of their friendly prices, high quality, and functionality of their merchandise.

As a Landlord, you must think of the right tenant mix and in what order to allocate the units based on size, location, and services offered. The Anchor tenant selection is fundamental because they influence the products and services offered in a particular center by others. You can have one or multiple anchor tenants depending on the size and setting of the shopping center. That is because the businesses need to go hand in hand and complement one another.

Taking up most of the space, they attract a cluster of smaller establishments around them to feed off the high traffic of shoppers. The surrounding stores not only complement the anchor retailer but also attracts a chunk of shoppers to the location in their own right.

For example, with a renowned restaurant adjacent to a supermarket, people planning to eat out and shop afterward are more likely to be attracted by such a center. The choice of the anchor tenant determines the other tenants who may want the next available space.

Demand for Rentals

A well-calculated tenant mix benefits all the parties involved. Such units appeal to retailers, and you rarely find a vacant store. Vacant units are leased immediately, which is an advantage to the property owners. They can attract optimal rental income from their investment by charging higher rental charges. Their popularity is enhanced by the significant sales and profits generated from the high traffic of customers visiting the different stores. This means a steady flow of income to the owner and retailers for a sustainable period.


It is a daunting experience to create a perfect tenant mix, especially if you do not understand the concept. Whether you are constructing a new shopping complex from scratch or buying an established center, there are significant factors to consider.

You can hire professionals such as Sapphire Capital Investment,  to help you understand what tenant mixing entails. This includes the importance of anchor tenants and the right balance for complementary retailers. The experienced professionals will help you understand the appealing trends in the location and assist you to beat what other commercial retail properties have implemented. This includes coming up with incentives that can give you a competitive edge.




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