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 It holds records for over 35,000 UK and international retailers and contains a wide range of published and unpublished information.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

 

  • Over the past few years, FSP's research has provided Argent with in-depth understanding of the current and future potential of King's Cross as a retail and leisure destination, helping to inform key strategic decisions

    Frederique Siegel|Project Manager, Argent (Property Development)Services LLP

  • FSP produced summary research to help market our scheme to retailers. It has been gold for our agents.

    Ian Sanderson|Director, Chester Properties

  • We needed a clear understanding of St. Enoch’s retail performance as well as an overview of both the macro and micro issues influencing shopper behaviours in Glasgow. Accuracy, speed and depth of detail were paramount and we knew FSP was the team to deliver this. FSP’s detailed research helped us to fully assess the opportunity from an investment perspective

    Alia ElGazzar|Principal at The Blackstone Group, The Blackstone Group

  • 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 wanted to build on our understanding of the Menkind customer profile and buying habits. 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