The rate at which shopping complexes spring up in major cities only points to a fact: Shopping complexes are a profitable aspect of the property sector to invest in.
Naturally, the owner or a shopping complex stands to enjoy pecks that property business generally offers. It is a way of trying to tying down one’s money and a way of circumventing inflation, since a landed property will always appreciate in value. Yet, compared to investing in residential apartments, shopping complexes have a comparative advantage.
With a shopping complex, you r tenants are usually more serious than those of a residential apartment. They are more conscious of why they have to pay rents on time, because they know that any hitch will disturb their trades or businesses.
Factors to consider in siting a shopping complex:
- Feasibility study.
But as potentially profitable as owing a shopping complex is, it is not all that really succeed as a business venture. Unless the investor pays attention to certain factors right from the time the idea is being conceived, his calculations may fail along the line. Among other factors, there is the need to conduct a feasibility study and carry out a technical analysis of expected incomes before putting money in the venture. This is because where some shopping complexes succeed as a business venture, others fail.
There are many levels of shopping complexes. Every investor must be able to determine where he fits. The location is a key factor you must consider before you start to build.
When you want to invest in a shopping complex, look for an area that is commercial. It must be a commercial lane. You don’t put a shopping complex in an area that is entirely residential, unless it is central to that area. For instance, since the time their layouts are being done, certain areas are considered commercial, and the potential of a shopping complex is already there. A shopping complex will serve that residential neighbourhood.
Another thing to bear in mind is the design. When you are designing your shopping complex, you must have the use in mind.
What kind of tenants are you targeting? Are you looking at the banks for instance? Then you must have the structure and requirements of a bank in mind when you are designing. Otherwise, a bank will later come and tell you that, ‘We like the location, but the building is not designed well enough to occupy our branch’.
Related to design is the issue of access. One should be guided by experience to build a shopping complex in a way that people can freely drive in and make use of the facility, whether as offices or shops, or whether you are talking about customers who want to drive in freely and drive out. It is not walled in as many people do, leaving only one or two tiny gates that scare away many would-be users because of overcrowding or traffic.
- Financial analysis.
It is thing of note that an investor ought to do a proper financial analysis before building a shopping complex. The location he chooses will determine how much it is going to cost him, and how much will be coming to him. He must be able to analyse what his expected income will be based on an outlay of how the money will start coming in, and when he would have recouped the money he invested. The analysis of the payback period is important.
Many people don’t do this kind of analysis, and so, the investment does not come out successful, primarily as a business venture. There are people that, once they have a redundant piece of land somewhere, what comes to their minds is: let me build a shopping complex. Others will just decide to do so, probably because a friend or an associate has built one. For others, they just see a beautiful structure somewhere, and their minds go to a plot of land they have somewhere. The next day, the construction work kicks off!
Based on the afore-mentioned, I will say that when you are planning to have a shopping complex, contract a professional estate surveyor and valuer. He will get a dependable feasibility study and analysis done for you in order to ensure that your investment in shopping complex generate good rents for you.