The Many Benefits of Investing in a Shopping Mall

0
117

For some, the thought of purchasing an entire shopping mall may seem like more than they’re willing to handle. But when you look at all the benefits that malls can offer, it’s easier to see why so many people are jumping on board with new mall investments. Shopping malls provide plenty of other investors with high profit margins and steady growth, and they can be a great investment option if you have the resources to purchase one and manage it appropriately. This article will cover all the details about how to make money from investing in shopping malls and how to maximize your profits throughout your ownership of the property.

Initial Investment


One thing you’ll need to consider when considering investing in a shopping mall is how much it will cost to purchase. This largely depends on how much space and how many anchor tenants (such as Target or Macy’s) are needed for you to make your initial investment profitable. While some malls may be sold for hundreds of millions, others may only require an initial investment of $20 million or so.

Rental Income


A shopping mall is not just a place to shop. It can also be an income source for its owner. Most malls have stores that are independently owned, meaning that as an investor you’ll have access to rental fees from these shops, often with long-term contracts guaranteeing high profit margins. If you’re not interested in managing all these rentals yourself, it’s possible to rent them out via management companies and keep your hands clean.

Long-Term Return on Investment


Although retail shopping malls tend to drop in value as they age, their long-term returns are very high due to steady traffic and consistent store sales. Even before it’s completely paid off, your mall will provide you with annual income based on its rental income. Plus, keep in mind that many investors sell their malls at some point during ownership to enjoy even greater profits. In fact, most owners do make at least one sale during their time holding a mall—on average, it happens after about 7 years.

International Exposure


One reason shopping malls are ideal investments is because they bring international exposure to local markets. There’s nothing like walking into an American-style mall—with its air conditioning, trendy shops and clean facilities—when you’re accustomed to outdoor markets and run-down buildings. The consistent appearance and feel will draw more shoppers from neighboring countries, which means more business for you. And with enough exposure comes competition, which creates opportunities for your mall to expand further than originally intended.

Build Brand Awareness


Brand awareness refers to how many people are familiar with your business. It’s about getting people to become aware of what you do, who you are and why they should care. To reach brand awareness, focus on three areas:

1) creating an online presence

2) building your network

3) nurturing relationships with customers.

Retail Development Investments


When you invest in retail, you’re helping to bring businesses and consumers together. That’s exactly what shopping malls do: they provide places for consumers to meet with businesses they want to buy from. Shopping malls are more than just centers for shopping; they foster community. And when done correctly, community is an incredibly valuable investment opportunity. Here are three benefits that come with investing in retail development