Albemarle Street at the heart of Mayfair (The Royal Institution)

This is a short feature on how to select a good retail site. I am using my experience with a client who wanted to set up a high end Art Gallery in Mayfair (London). These Art Galleries are centred around Cork Street and New Bond Street. The other streets being Albemarle Street, Savile Row, Mount Street, Clifford Street and Old Burlington Street.

The client said that he had found an ideal property on Old Burlington Street where the rent fitted his budget. He had worked out a business plan, suppliers, monies for rent, staff and refitting of the property. All he wanted was my approval on the selected property, do my magic with feng shui and everything would be work to plan to get the projected sales. It would be Hunky Dory (a British slang) on his part! The rent was extremely reasonable for that area and the unit did not need any money to be spent on the decor. It was ready to use.

I visited the site and asked for the “history of the site”. How many recent tenants have there been? The estate agent rattled out the history of previous tenants and it clicked. It was a nightmare site. Tenants would come in with the best of intentions, refurbish the unit as their version of a high end gallery, get the stock in and waited for business to come. Wait they did. They waited and waited for the customers which did not come. The tenants moved out but after an heavy expenditure of time and money; let alone a loss of confidence. Then, there is the additional expenditure of getting the rent paid after moving out.

He then said to me, I thought with feng shui, you could turn a site with a history of poor business to one with good business. Yes I can do it only if there is plenty of energy going down the street. There is no energy flowing on this street. There are no shops, just offices and a multi-level car park. This speaks volumes for the level of business on this street. That is why you can get the unit for an amazingly low rent in Mayfair. It has a string of failures behind it.

We then toured the other streets with the art galleries. The vacant sites were either too expensive or needed a refurbishment which was way above his budget.

When we parted, he was happy that he knew that his project, as envisaged, would not work. He did not lose any money. The time he lost was in the planning of the project. I would recommend this approach to everybody looking for retail premises. Discuss the project with me first before paying any monies. I certainly do not like going to failing shop and being asked to improve it. In 99% of the time, there is no energy getting to the main door and there is nothing that can be done.

Secondly, he began to recognise the word “bargain” or “below market value” in property. We understand buying consumer goods at a discount. Consumer goods depreciate or have very little re-sale value. There is a serious market in property. A property that is to be sold needs a buyer paying the asking price or better. A property for rent needs to be occupied with a tenant paying the asking rent. An unoccupied property is a serious liability. It is not doing anybody any favours.

When a property that is being sold at a discount, there must be a reason for the discount. More often than not, they have hit a problem – cannot sell at the initial asking price, owner got into financial problems etc. In more cases than not, the feng shui of the property is poor. Therefore, when you are purchasing the discounted property, you are inheriting the associated problems of the property as well.

· If it was hard to rent out; you will also find it hard to rent out as well.
· If it is hard to sell, you will also find it hard to sell as well,
· If it is doing poor business because of location, it will also do poor business as well.

I prefer to be called in at the planning stage so I can comment on the various shortlisted properties.

1. Identify potential locations that would work very well or bea successful location for business

2. Identify property in secondary sites but will be a successful location

3. Identify property that are currently poorly performing but can be altered to be a successful location.

This way, the client minimises the risk of time and money and maximise the upside potential of the project.

Dr Michael Oon