The performance of other property classes relies mainly on how well the property owner/managers can battle against the forces of supply and demand. No matter how well a commercial or industrial property is managed, if there is more space than tenant requirements in a particular market, there won’t be enough tenants to go round, and the effect of the property owners competing for the limited number of tenants will result in reduced rentals, the need to offer lease incentives, and vacancies, that will effect the performance of all properties in that market.
Retail property is different. Most capital cities have had examples of a busy thriving suburban shopping centre on one side of the road, and a struggling centre on the other side. Low foot traffic, vacancies and no ambience on one side of the road, and a busy, vibrant great place to be on the other. It is possible that 5 years earlier the success of the 2 centres could have been the other way round. The difference between the 2 centres is the retail offer. The centre that is able to attract and retain the best tenants will be the winner, the rest, clean toilets, convenient parking, well lit safe environment is easy.
One of the strengths of the succesful retail property manager is to understand retail trends, and be able to convince the people who make the decisions to ensure that the uses or tenants who will be strong in the future are retained, and the uses or tenants who will be weak in the future are replaced. This is not easy, the trends are not always easy to pick, and the best courses of action for the long term, are not necessarily the most financially attractive at the time.