How to make money in a shopping mall? (ENG)

When it comes to thinking about making money in a shopping mall, people only focus on maximizing profit by NLA lease. However, there are so many ways for a retail developer to put more money in their pocket.

I. For Vietnam Market:

1. Rental from NLA lease:
a. Fixed rent: an amount of money that the tenant has to pay monthly

b. Gross turnover Share: Besides the fixed rent, the landlord can also consider sharing turnover with the tenant. This generally works for a retail professional developer, who is willing to invest in the shopping mall value and a heavy marketing plan to draw the traffic.

As mentioned before in the food court chapter, I am a GTO person. Sharing revenue will help a developer to gain more money than a normal fixed rental rate. Indeed, the value of a shopping mall mirrors by the traffic flow. I will present how many ways that you can do GTO in the next chapter.

2. Rental from outdoor refreshment area:
According to a shopping construction, an outdoor walking haul and rooftop area are always available. You can use those areas to lease if your tenant has needs.

3. Rental from event space:
Most of the shopping malls in town have a big space under the void. That should be used as the event space for the shopping mall to make some good for the community or improve sales for tenants. An event space is not necessary to be inside of the shopping mall but outside also. As long as the size of the land can work for vendors. To note, the rental of the event space at the weekend should be higher than the weekday.

4. Rental from license agreement:
According to Investopedia, a license agreement is a written contract between two parties, in which a property owner permits another party to use that property under a specific set of parameters. In this case, we are talking about advertising deals. There are so many places that you can use to rent out as an advertising spot in a shopping mall. It’s such as escalator, lift, walking haul. Center haul, wall, or parking lot…

Normally, the landlord will rent these out for free to support tenants by the beginning. Later, the landlord can start to think about gaining money from the tenant if the tenant needs.

The advertising banner is a good investment for the landlord if they already think about it in the beginning. If the landlord doesn’t want to spend too much money, they can use a static banner. Or else, they can spend a lot of money on a flash banner, which can make a huge return back. An advertising banner can work very well that depends on the location of the mall.

5. Rental from Non-NLA:
Non-NLA is a flexible deal and normal for a small area in a short term contract. The landlord can use those space to lease out for pushcart, game machine, ATM or kiosks….

6. Electricity and Water Payment:
It’s not a big surprise that the mall operator always charges utilities higher than an actual price. Regularly, it will be 30% higher than the price that the landlord signed with the government.

7. Parking fee:
It’s a big discussion for any mall developer to decide. Should a mall take a parking fee from customers?

To be fair, the developer should not take parking fees for customers in at least 6 months of the beginning. It helps customers to feel more comfortable to get used to the parking area and the mall as well. After a certain time, they can consider to take it.

The parking fee from shopping malls is from VND 2,000 to VND 5,000 for a bike in the daytime.

Let’s think about it!

An average footfall for a normal shopping mall should be 3,000 per day. If there is VND 2,000 per bike. How much should it be?

8. Rental from storage:
It’s a quite common deal if your shopping mall is outside of a big city. The tenant always requires for storage, especially for F&B, fashion or footwear tenant.

II. Not applicable in Vietnam (at the moment):
– EPOS rental
– Showcase rental
– Telecom Equipment rental
– Carwash
– Telephone rental
– Selling soft drinks at your center
– Renting roof space to telecoms

Hi, I am Hoang Anh - a leasing geek! I am basically naturally curious. If you love working in the real estate industry like me, you are in the right place. Let reveal all the secret and my secret will help you to understand more about retail and commercial leasing in Vietnam.

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