Guides for the people who run retail real estate

Turnover (percentage) rent ties part of a retailer's rent to its sales. The lease sets a percentage and a breakpoint: either natural, where the base rent divided by the percentage gives the sales level above which percentage rent starts, or artificial, a figure agreed in the lease. Some leases charge the greater of the base rent and the percentage.

In Mercato, retailers declare monthly or quarterly sales in the retailer portal, or their tills post them through the sales API. Declarations are checked for audit flags (late, missing or out of pattern) before billing, and the certified annual figure trues the year up against what was billed.

Common Facilities Charges recover the cost of running the parts of a centre every retailer shares: security, cleaning, air-conditioning, lifts, insurance. Costs are collected in recovery pools, each with a budget and an apportionment basis, usually by GLA, with carve-outs for anchors where leases say so.

Retailers are billed estimates on account with their rent. At year end the actual cost is reconciled against the estimates and each retailer receives a balancing charge or credit and a statement showing how its share was worked out.

Financial asset management treats each mall as an investment rather than a building. The core measures are NOI (income less operating cost), ROI against the owner's hurdle rate, yield on value and payback, read alongside vacancy, income against budget and the capital the plant will need.

Mercato's asset finance view calculates these per mall and for the group from the ledger, flags malls below the hurdle with a recommended action, and projects end-of-life plant for ten years with its replacement cost. Institutional structures such as SPVs, investor capital accounts and debt covenants are on our roadmap.

CAFM is the system of record for the physical building: what assets exist, how they are maintained, who is working on site and what it costs. A good CAFM joins work orders, planned preventive maintenance, the asset register with expected life and warranties, and statutory inspections for plant such as lifts and fire systems.

In a mall, CAFM also feeds recovery: the cost of a cleaning contract or a chiller repair flows into the Common Facilities Charges that retailers pay.

Closing an incident is not the same as preventing the next one. A good HSE register records what happened, where and how serious it was, and then asks why: was it a facility issue, a human error, equipment or a third party? The cause decides the corrective and preventive action, or CAPA: a facility issue needs a permanent fix by facility management, a human error needs training, awareness or a rule, and a breach of the mall's rules becomes a violation against the party responsible.

In Mercato an incident cannot close until the action its cause asks for is in place, or a waiver reason is written down. The CAPA register lists every action across incidents, open and overdue first; the lesson learned is captured at closure; and incidents that repeat in the same place, or share a root cause, are flagged as recurring issues.

Most markets in the region require leases to be registered: Ejari in Dubai, Tawtheeq in Abu Dhabi, Ejar in Saudi Arabia, and municipal or ministry registers in Qatar, Kuwait, Bahrain, Oman, Egypt and Jordan. The rules, fees and deadlines differ by country.

Mercato prepares the registration pack and the fee, reminds the team before the deadline and records the registration number on the lease. These registers generally offer no API for landlord software, so the submission itself stays with the authority's own portal.