Nothing better to begin this post than the Ray Korc’s legendary phrase, McDonald’s developer, who said: “The three main elements to achieve greatness are: location, location and location.”
Without a doubt a good location is essential to ensure the viability of a business that needs clients to test and buy their products.
Each month we see premises that close and in most cases the problem comes from an error in location.
From Cat Real Estate we are in constant contact with expansion directors of multiple brands to advise them on where they should set the location and which are the most strategic zones for their clients.
This was New Balance’s case, the brand needed a prime location to offer a new shopping experience to both their national and international clients, and we accomplished a premise in the middle of Rambla Catalunya number 47 of Barcelona.
Another enterprise with whom we have collaborated in several occasions is “Buenas Migas”, which has had an exemplary expansion of the chain with the opening of new premises in exceptional locations.
Of course we need to take into account that not all brands can afford to pay prime locations, where the first line stores such as Inditex are located. Amancio Ortegas firms hold the majority of Portal del Ángel with prices of 280€/sqm/month, known by some people as Inditex’s Street.
As far as rental prices go, the brands should not pay rends which they cannot support. Their financial exertion has to be managed and under no circumstances should unbalance a business. There is a need to bet in areas that have a growing potential and can meet the clients’ expectations.
An example could be “La comercial”, located in the born neighborhood, which has become a referent as far as quality textile commerce goes in Barcelona.
The Barcelona Oberta association, which brings together traders who share economic and social vision of the proximity trade and shopping tourism in the city of Barcelona, state that the average occupancy is over 80%, according to the study “Diagnosis of the ecosystem of commercial axes associated to Barcelona Oberta” conducted by Eixos Economy Observatory.
Another interesting point to highlight is the possibilities of opening new establishments in malls do to the fact that in some of them the rents are too excessive for the clients who guarantee it.
In Cat Real Estate we found ourselves with a brand that only opened in malls, now this brand no longer exists in Spain. With this I do not mean that obviously there are shopping centers where the opening of a commercial premise is really positive, but there are others that do not justify it.
In conclusion, a good solution could be to combine the opening of premises in the streets with openings in malls, but once again the location of the brand in the shopping mall.
We get back to the beginning of the article “The key to triumph is: location, location and location.”
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