ABSTRACT
In a town centre where retailers compete with one another, there will be sufficient leasing activity to provide market evidence which will indicate the optimum rental value of a particular unit. The share of gross profit available for payment of rent will vary from one trader to another and is likely to be influenced by the type of goods sold, the volume of sales and the rate of stock turnover, the mark-up and the space required. For example, a jeweller needs less space than, say, a butcher, but sells items which are individually expensive and on which the mark-up is traditionally high. If he foresees sufficient turnover, therefore, he will be able to outbid the butcher. The latter may settle for a less important and therefore less expensive position in the shopping centre whilst a carpet or furniture retailer who requires quite large premises will tend to seek premises some distance from the prime part of the centre. The trader is likely to choose the best pitch within his financial ability and any analysis of rents agreed will provide information on traders’ preferences.
