A major element of managing risk as a retail property owner is understanding incumbent (and target) retailer performance. This applies particularly in respect of the level of rent that tenants can afford to pay in a specific unit, as well as their overall financial stability.  

Over many years FSP has built, and maintains, possibly the most detailed retailer database in the industry. It holds records for over 35,000 UK and international retailers and contains a wide range of published and unpublished information. When major retailers issue their annual accounts FSP analyses their performance and updates its model; this acts as the basis for quick and accurate evaluation of any location across two aspects:

  • Individual unit risk

Every unit has strengths and weaknesses relating to size, configuration, pitch, competition, mix etc. FSP has extensive experience in flexing its retailer model to ensure that each of these factors is weighted to make it as specific as possible for each operator. This avoids the reliance on generic data often applied by other consultants. Depending on the passing (or turnover) rent in force, FSP then uses its model to estimate likely sales, unit profitability and return on investment. This information is invaluable for quick pre-acquisition analysis but also for regular evaluation of performance across shopping centres, retail parks, outlet malls and high street stores.

  • Corporate risk

FSP analyses retailers’ annual accounts and, based on a series of ratios, establishes their comparative financial health. For many retailers FSP now holds a time-series pattern of performance which can indicate trading and profit direction. Operators are classified into broad groups (eg Healthy, Head Above Water, Very Worrying); the vast majority of retailers forced to stop trading fall into the latter category

FSP uses a matrix of information combining unit and corporate performance to show the proportion of passing rent at risk. As retailing is inherently dynamic, regular evaluation of the risk matrix helps property owners and investors keep ahead of the game.

What is your property risk profile? Contact FSP to find out more

 

  • I am very pleased to have given the approval to the research as this really does appear to me to be money well spent.

    Robert Wood|Fund Manager , Continental European Real Estate

  • We were aware of FSP’s work on shopping centres and also as a liaison between landlords and retailers. We wanted to build on our understanding of the Menkind customer profile and buying habits. After meeting with Jo and the team, we quickly realised that an analysis of our online customer – as well as in-store – would provide us with a rounded view of the customer experience we provide. Having this defined view of our customer really means we can develop a product strategy that responds to their preferences and needs. It’s vital that we demonstrate how well we understand our customer through our product range so we will be building this into our strategy.

    Paul Kaufman|Chief Executive, Menkind

  • FSP information and face-to-face presentations have been instrumental in getting retailers to consider schemes which they would not otherwise have done and this has been successfully converted into lettings which would not have happened in a number of instances.

    Roger Fulford|Director, Munroe K

  • We needed a clear understanding of the prioritised location opportunities for Acuitis to assist leasing negotiations and management planning. It was important for us to understand, in detail, which towns and cities offered potential for Acuitis and what levels of turnover might be expected. FSP delivered everything we needed and provided useful tools for us to review and adjust our thinking as the roll-out progresses.

    Diane Newman| Director, Acuitis

  • FSP has very helpfully set out the trading risks and opportunities in this investment opportunity.

    Krysto Nicolic|Senior Associate, Ares Property Partners