pop up shop

[propertyVIC]

Wondering if anyone has experience of renting to people running a 'pop up shop' on a short term basis while seeking long-term tenant?

Is rent generally less than it would be for a long-term tenant? If so, what proportion?

 

[chilliblue]

I have only done these in NSW so best to check with your states act.

Commercial Buildings:

I have my own licence agreement which details the basic requirements and clearly identifies the lessees rights and responsibilies. The lessee and their legal adviser signs the licence and I always take a security deposit of at least 3 months gross rental.

Ensure that you follow up that that the electricity is placed in their name and like any lessee, that they have the correct insurances.

There is also a clause that I am allowed to show potential tenants through as required and with a minimum 24 hour notice period.

Generally, it is done over the Christmas/January when most people are not looking at leasing or alternatively I have also done it in July/August period when I contact the local accountants to fill in any vacancies that I may have in the portfolio.

Try not to use this type of tenancy for longer 6 months.

Retail Tenants (casual mall lettings)

Similar to the above with regards to paperwork and insurances but in these instances I never have them longer than 1 month at a time as the types of tenants need to rotated.

With regards to rental, it depends on the situation. If you are using it as stop gap then the quality of the tenant and the way that they will look after the property is more important than attaining top dollar.

Casual lets in shopping centres command a significantly higher rental.

Hope this helps.

 

[Macca]

I know a guy that does pop up shops in NSW, generally he low balls all the shopping centres that have empty shops for a tenancy for one month.

He will only visit each centre about once a year, in a real biggy he may go twice a year.

He generally pays less than half normal rental with no other contributions.

He can set up in one day, usually just has boxes of stock everywhere and lets the general public pull it out the boxes and buy it as he sets up.

He can strip out overnight if required by the centre when he has finished.

 

[Wunderbar]

In Chadstone they charge $200k per year for a 10sqm shop near the food court....but that is a long-term lease.

 

[Dazz]

Hmmmm, I wonder which one is close to reality.....they both can't be true.

I know a guy that does pop up shops in NSW, generally he low balls all the shopping centres that have empty shops for a tenancy for one month.
He generally pays less than half normal rental with no other contributions

and....

Casual lets in shopping centres command a significantly higher rental

 

[chilliblue]

Obviously it depends on the management/owner of the property.

 

[goonandtell]

from what i can tell popup in the main mall/walking area/etc.. is quite expensive and commands a substain premium from when ever i have been involved as a tenant.

Short term/casual leasing in the sense of using a spare shop which is empty and otherwise would get no rent is generally at a discount.

 

[PrimeCommercial]

Hmmmm, I wonder which one is close to reality.....they both can't be true.

I know a guy that does pop up shops in NSW, generally he low balls all the shopping centres that have empty shops for a tenancy for one month.

and....

Casual lets in shopping centres command a significantly higher rental.

As strange as it seems Dazz they are both true.

Casual Mall Leasing in shopping cetres is very expensive. In a regional centre like Garden City Booragoon for those out west, Knox for those in the south, Macquarie and Warringah Mall in NSW and Pacific Fair in QLD weekly rates for a std 3m x 3m powered "site" are over $3000 per week and throughout peak periods the loadings can be up to 150% (ie $7500pw). Hard to see how anyone can make a buck out of 9m2 at those rates but they do.

Casually letting a vacant shop more often that not works out cheaper than permenant rates let alone casual mall space rates. Saying that most centres wont allow you let a vacant shop for one week as with mall space and most want 2-3 month minimum.

I know a guy that does pop up shops in NSW, generally he low balls all the shopping centres that have empty shops for a tenancy for one month.

Theres quite a few operators that do this but generally for more than a month.

Wondering if anyone has experience of renting to people running a 'pop up shop' on a short term basis while seeking long-term tenant?

Is rent generally less than it would be for a long-term tenant? If so, what proportion?

Plenty of experience. In 90% of cases it was less than perm rates, sometimes as much as 70% less. For some reason the really busy sites that everyone will pay plenty for dont become available for casual leasing all that often. Conversly the crappy sites tend to come up all the time but people wont pay budgeted rates for them.

Shopping centre managers love vacant casual mall space.
Shopping centre managers hate vacant shops with hoarding up.

 

[rozella]

It is best for me to go in the walkway of the mall as exposure is much higher.....more expensive though. I do 2 shopping centres per month for 7 days each leaving a week in between each. I would not take an empty shop in a shopping centre even if it was free. Depends on your product though & the type of customers that you want. I stick to regional shopping centres....$100 - $200 per day rent. You need to factor in accomodation & fuel as well as the rent.