There is no doubt that jewellers have a legitimate gripe with shopping centre landlords regarding high rents. It has been a long-held belief – supported by anecdotal evidence – that jewellery retailers pay higher total tenancy costs compared to almost all other retail categories.
The difficultly has been proving the case and being able to negotiate from a position of strength with the large publicly listed companies; however, a new initiative by the Jewellers Association of Australia (JAA) may go a long way to changing that.
Now, not only will retailers be able to discover how much rent their competitors are paying but also they will be better informed at the time a lease must be renewed.
In partnership with Leasing Information Services (LIS) – an Australian provider of a wide range of retail leasing data – the JAA has launched an Australian first: to offer real-time data in states that do not provide registered leases, namely Victoria, South Australia and Western Australia.
Following the JAA’s successful application to the Australian Competition and Consumer Commission (ACCC) to grant an exemption to its members to provide their rental data in these states, LIS has developed a data portal for collecting leasing information in a de-identified manner.
This means, along with the existing LIS retail leasing database of shopping centres, direct factory outlets, bulky goods and retail strips, JAA members will now have access to this information via the JAA. Additionally, non-chain members – jewellers with less than three stores – will have access to leasing information for NSW, Queensland and the ACT.
The chart below is an example of the critical data that will be available to members in order to acquire and negotiate the best possible lease terms from landlords. In this sample report, there are 10 jewellery stores and three jewellery kiosks currently operating at XYZ Shopping Centre. The stores range in size from 54 square metres to 164 square metres, with the average being 82 square metres.
Note how the average rent ($2,100 per square metre) is deceptive because one store is paying as little as $1,480 per square metre while another is paying more than twice that at $3,300.
Are you paying too much rent? The JAA rental database, scheduled to go live later this year, can help members determine the true market rent for their existing store or assess a fair and reasonable lease cost for a new store.
Spotlight learning
Simon Fonteyn, managing director of LIS, will explain how this new system could revolutionise the jewellery retail leasing market by assisting retailers in negotiating leasing and tenancy costs.
His free presentation at the JAA International Jewellery Fair will be held at 10:00am on Sunday 30 August in the Spotlight 2 area.