Costs You Can Expect When Renting Out a Retail Space

Updated on 15 October 2018

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retail store shopping shoes

Locating your store in a shopping centre or mall can be a viable option for retailers looking for increased foot traffic and brand exposure, but it does come with costs.

The process of entering a lease agreement can be complex one, particularly for SMEs. To help entrepreneurs navigate the cost aspect we turn to Monalisa Sam who is an experiential retail and property expert who has previously managed Cavendish Square in Cape Town, The Zone in Rosebank and Maponya Mall in Soweto.

“It is important to request shopper profile information from the mall you have interest in. This will guide you as to whether your target market is visiting the mall in the first place. Secondly having an understanding of the retail mix in that specific mall will give you insights of any competition you may have in the centre,” Sam shared in an interview with SME South Africa.

Below are the costs business owners need to consider when making their decision. 

Costs business owners can expect when they become a tenant?

  • Security deposit as agreed with the Landlord.
  • Shopping fitting costs to fit out the store procured in the mall.
  • Signage costs for the store.

Other costs include:

  • Costs to stock (merchandise) the store for trading purposes
  • Operational system support for point of sale equipment
  • Recruiting and staffing the store
  • Marketing costs – The shopping mall markets to attract feet to the mall not specifically to your store.
  • Monthly rent and electricity – Rent includes operational costs incurred by the mall such as security and cleaning which is allocated to tenants according to size of their operations.

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