CREATING sustainable retailers

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GPT RETAILER ENGAGEMENT STRATEGY

Contents

TOC o "1-2" 1.0Executive Summary PAGEREF _Toc19825460 h 4

1.1Why is Retailer Engagement important? PAGEREF _Toc19825461 h 4

1.2Key Findings PAGEREF _Toc19825462 h 4

1.3How will these findings be applied? PAGEREF _Toc19825463 h 4

2.0Introduction PAGEREF _Toc19825464 h 4

2.1Why engage with retailers? PAGEREF _Toc19825465 h 4

2.2Engagement Strategy Overview PAGEREF _Toc19825466 h 5

3.0Introduction to GPT: Retailer Onboarding PAGEREF _Toc19825467 h 7

3.1Objective PAGEREF _Toc19825468 h 7

3.2Key Activities PAGEREF _Toc19825469 h 7

4.0Life at GPT: General Communication PAGEREF _Toc19825470 h 8

4.1Objective PAGEREF _Toc19825471 h 8

4.2Key Activities PAGEREF _Toc19825472 h 8

5.0Strategic Relationships PAGEREF _Toc19825473 h 10

5.1Objective PAGEREF _Toc19825474 h 10

5.2Identifying Strategic Retailers PAGEREF _Toc19825475 h 10

5.3Key Activities PAGEREF _Toc19825476 h 11

6.0Promoting Commercial Sustainability PAGEREF _Toc19825477 h 11

6.1Objective PAGEREF _Toc19825478 h 11

6.2Understanding Key Retail Drivers PAGEREF _Toc19825479 h 11

6.3Abatements PAGEREF _Toc19825480 h 12

6.4Turnover Rent PAGEREF _Toc19825481 h 15

7.0End-of-Lease Retailers PAGEREF _Toc19825482 h 15

7.1Maximising Base Rent and Retention PAGEREF _Toc19825483 h 15

7.2Leaving GPT PAGEREF _Toc19825484 h 16

8.0Appendices PAGEREF _Toc19825485 h 18

8.1Welcome Email PAGEREF _Toc19825486 h 18

8.2New Retailer Contacts Form Example PAGEREF _Toc19825487 h 19

8.3Newsletter Example PAGEREF _Toc19825488 h 20

8.4Abatements PAGEREF _Toc19825489 h 22

8.5Pre Lease Expiry Meeting Template PAGEREF _Toc19825490 h 23

8.6Web Based Retailer Engagement Scope Example PAGEREF _Toc19825491 h 25

Strategy at a Glance:

Retailer Life Cycle Stage Engagement Opportunity

Beginning New Retailers Marketing Support

Operational Support

Pre-Opening Meetings

Post-Opening Meetings

During General Communication Store visits

Newsletters

Retailer Forums

Retailer Awards

Marketing Calendar

Pinnacle Service:

Strategic Relationships Identifying key retailers

One-on-one meetings

Collective Meetings

Promoting Financial Sustainability Understanding key retail drivers

Assessing and supporting struggling retailers

Supporting top performers

End End of Lease Maximising retention

Pre-lease negotiation meetings

Maintaining relationships

Executive SummaryWhy is Retailer Engagement important?Engaged retailers lead to better business outcomes for GPT, our shareholders and the retailers themselves.

Retailer engagement can be measured by the amount of discretionary effort that a tenant will use in order to help a centre achieve its goals. It can make the difference between a retailer, and therefore a centre, being successful or not.

Key FindingsPockets of best practice engagement exist, however, it is inconsistently applied across the portfolio. These minimum standards can be applied flexibly based on an individual centres needs, and help deliver great outcomes for retailers, customers and shareholders.

In the broader market place, engagement is an effective strategy in driving customer experience, which is critical to differentiate ourselves from online, our number one source of market share leakage.

To ensure that the tenants in GPT centres have successful, sustainable businesses we must engage with our retailers across their entire lifespan, not just when they are at risk, or when their lease is up for renewal.

Setting retailers up for success can also differentiate GPT from our competitive set. Having consistent standards of communication and support will help retailers tailor their offering and become more relevant to our customers.

How will these findings be applied?This engagement strategy shares best practice from which centres can develop a tailored approach for their specific centre and retailers. The strategy follows the general life cycle of a retailer in a shopping centre: from birth, to life and to exit.

The following initiatives are considered:

Introduction to a GPT Centre: On boarding for a successful opening

General Communications: Life at GPT

Managing Strategic Relationships:Who is most important for GPTs success?

Maximising Sustainability:Promoting financially successful retailers

At the End of a Lease:Ensuring our retailers stay with GPT Centres

This consolidated engagement strategy ensures that:

best practice is shared among all centres;

retailers will see GPT centres as preferred destinations for both new stores and renewals; and

financial outcomes are maximised at all touch points during a tenants customer journey.

IntroductionWhy engage with retailers?Our unifying goal: Great Customer Experiences

Great retailer engagement results in better customer experiences, which leads to GPT Centres becoming preferred destinations for tenants and customers. Our goal is to ensure that every customer who comes to a GPT Centre has an elevated, seamless experience. To be successful, we must be ruthless in our customer centricity.

Our NPS data tells us that there is a direct correlation between customer experience and spend per visit. Online sales are the number one competitor to shopping centres, and the best way to prevent leakage is through five-star service experiences.

Benefits to Retailers

An engaged relationship with GPT will ensure that retailers:

Are clear on the Centre Management team members, their contact details and responsibilities.

Have an understanding of the initiatives that GPT is undertaking to promote the centre and boost traffic.

Have confidence in GPTs goals, driving participation in events and ensuring that initiatives resonate with as many customers as possible.

An effective engagement plan will also ensure that a retailer is inducted into key drivers of their commercial success, including:

Key customer profiles in the centre;

The local trade area; and

The precinct in which they are located and shopping habits therein.

Benefits to GPT

GPT has identified nine key stages in the customer journey of a Tenant Retailer.

Centre Management effectively begins to engage with retailers from stage 6, when a tenant takes possession, if not before. Effective engagement also ensures that when a retailer arrives at Stage 8 and they make the decision to stay in a GPT Centre.

Great two-way communication helps GPT get a clear understanding of its customers and the Australian retail landscape, allowing us to make future focussed decisions. This ensures:

Retailer sustainability is maximised and retention increased. Retailer goodwill is a key component of our value proposition, minimising downtime and capital required for new retailers.

Our Leasing team has an understanding of our current retailers that they can use to assess prospective tenants.

Our Asset teams manage opportunities around abatements and turnover rent more effectively.

Our Marketing teams have better participation in Centre initiatives, and receive more accurate, measured feedback from retailers after an event occurs.

On a more macro level, we also have an opportunity to invest in long-term strategic relationships with retailers. This can result in:

Brands choosing GPT centres as destinations of choice for their stores.

Leveraging GPT portfolio opportunities across both Office and Logistics.

Engagement Strategy OverviewWe want to ensure that retailers in all GPT centres have a premium experience. This will help to differentiate GPT as a destination for both retailers and customers. Nothing in this strategy should replace a genuine, authentic relationship between Lessor and Lessee, which is essential for mutual success.

By focusing on providing a great experience, we encourage increased visitation, dwell and spend from our shoppers. This will ultimately lead to an increase in sales, which is our unifying goal in driving specialty productivity and ultimately improving our market share. As a result, our retailers are willing to pay more rent, which increases our returns, enabling us to reinvest in our assets.

Individual Centre Strategies

Each centre will need to develop a strategy that is most appropriate for their team, their tenants and their customer.

It is suggested that each centre team hold a planning session annually, to determine which actions will be most effective in their individual context. This could be at the beginning of the financial year (to ensure the plan is at its most effective for peak trade), or as part of the business planning process.

left1837781Market Share

Grow market share through increased customer visitation and dwell

Hold /grow sharein key categories

00Market Share

Grow market share through increased customer visitation and dwell

Hold /grow sharein key categories

20590914180263Program: Better, more engaging activations enabled via a more consistent feedback loop

0Program: Better, more engaging activations enabled via a more consistent feedback loop

4400113382930Product: Elevated product through better attraction, retention and performance

0Product: Elevated product through better attraction, retention and performance

right1825905Place: Improved environment for customer through elevated displays and activations

0Place: Improved environment for customer through elevated displays and activations

316494726852High performance team and culture

0High performance team and culture

Introduction to GPT: Retailer OnboardingObjectiveEnsure that all new retailers are inspired to be a part of a GPT Centre, and are aware of all resources that will help their success.

Where we are now

We have great activities happening in most of our centres, mostly for our incoming retailers. Despite this, retailers are not clear on what they can expect when they open at a GPT centre.

Where we want to get to

We want to be known for a best-in-class new retailer experience across all GPT assets. Every new retailer should be confident that they will have a consistent experience at a GPT asset, helping set them up for success. They should have the tools, knowledge and relationships to achieve their goals from opening, and a clear understanding of the customer demographic and the centres aspirations.

Key ActivitiesKey Activities prior to Opening Day

Date Responsibility Task

Lease Documents Issued Centre Administration Manager Contact the retailer for initial documents such as PLI, bank guarantee, etc.

Marketing team Contact the retailer to schedule a marketing consultation.

Six weeks prior to trade Marketing team Contact the retailer to discuss marketing support, and determine if a customised plan is appropriate. Understand:

Retailers business and measures of success

Trade area, key demographics and competitors

Customer patterns relevant to commodity group and retailers precinct.

Store launch opportunities (paid/unpaid opportunities, launch day activities, best practice from other launches)

Business Development Media and other Business Development opportunities introduced.

Centre Administration Manager Send out calendar invites to all Centre Management team members for Onboarding actions for the retailer.

Two weeks prior to trade Centre Manager or Retail Manager Call retailer to see if assistance is required prior to opening, and to understand key operational contacts.

Centre Manager or Retail Manager Send Welcome to the Centre email: see appendices.

If available, a Retailer Handbook should be provided. Include:

A Centre map + information on accepting deliveries, etc.

Centre rules, including Centre opening hours

Marketing activations and opportunities

Details for contacting security

Centre Administration Manager Get retailer to complete contact form and input information into Salesforce to facilitate seamless communication.

Two days before Opening Day Centre Administration Manager Visit the store and deliver copy of the Welcome Pack.

Show the store manager: storage (if applicable), postage options, Customer Service desk, security office, toilets and parents rooms, end-of-trip facilities.

Operations Manager and/or Assistant Operations Manager Visit store to:

Show the store manager access points, emergency evacuation routes and procedures

Explain waste management and recycling procedures

Answer any questions that the store team may have

Marketing Coordinator/Team member Ensure that the website and centre directories are updated

Opening Day

Responsibility Task

Centre Administration Manager Visit the store to bring a welcome gift.

Take photos of the store, email to all of the asset team and will post to Yammer.

Centre Manager and/or Retail Manager Visit the store on day one to welcome the store team to the centre.

This is a great time to understand what success looks like for the retailer, which will help tailor future conversations about support or performance.

Post Opening Checks

Date Responsibility Task

One week post open Marketing team Visit the store to understand how the first week of trade went.

Additional marketing support should be offered at this point if results were not successful.

Two weeks post open Retail Manager Meet the store manager to check in.

Four weeks post open Marketing Coordinator/Team member Email the asset team to confirm that all launch actions are complete and to give a summary of trade for the first month.

Three months post open Retail Manager and Marketing Team member Meet with the retailer to understand performance and to discuss longer-term plans for the stores success.

Notes from this meeting should be circulated to all asset team members.

Life at GPT: General Communication

ObjectiveEnsure that all retailers are inspired to be in a GPT Centre and are aligned on key issues.

Key ActivitiesBusiness as Usual

Effective communications as part of Business as Usual are critical to ensuring that a retailer has a great relationship with a centre. If Centre Management does not ensure that a retailers basic and urgent needs are consistently met, then it is unlikely that a great relationship will ensue.

Each centre must ensure that they are consistent in how we triage issues, regardless of which team member a retailer is trying to contact. Issues such as air con/heating, ad-hoc requests, security for late night trade, can undermine subsequent initiatives that involve significant financial outlay for GPT.

The effectiveness of other engagement activities, such as collective meetings, will be diminished if simple requests are not responded to in a timely manner. There is a risk that these forums will be used to vent frustrations, as this is the only avenue to contact Centre Management.

Guide timeframes:

Operational requests Business Development / CML Marketing requests Lease terms

Same day Two working days Two working days Five working days

A holding email should be sent it an effective response cannot be provided within the agreed timeframe.

List emails (e.g. highpoint.marketing@gpt.com.au) that multiple team members have access to should be utilised where appropriate.

Consider how effectively the ARC system is being used by retailers to log concerns.

Newsletter

Newsletters improve the accessibility of the team and the flow of information. A periodic newsletter should be a key source of information for all retailers and reduce the number of ad-hoc memos a retailer receives.

Newsletters may be sent out fortnightly, monthly, bi-monthly or quarterly, with timeframes for sending out newsletters that are consistent and communicated. The intervals of a newsletter will be decided by the asset team, based on:

The size of the asset, including the number of tenants;

The degree of change that will be occurring in the coming 12 months; and

Competitive factors, including engagement.

A good newsletter should include:

A message from a key team member on events upcoming in the next month.

A marketing update, including a look back and update on whats coming up.

An operations update, including any key operational priorities and changes.

Centre strategic priorities should be clearly and consistently communicated.

E.g. In order to encourage our community to converge and have positive interactions, we have streamlined our extended trading hours for December.

A contact list for Centre Management, including pictures of each team member.

An example of a good newsletter is included in Appendix A.

Retailer Forums | Town Hall Meetings

Town Hall-style meetings should be conducted at least twice annually to give all retailers an opportunity to hear information, ask questions and give their views.

Elements of a good Town Hall Meeting include:

All retailers being invited;

A member of each function from the Centre Management team being present;

Time split between a high level presentation of how the Centre is performing, and questions and interaction; and

Catering should be provided.

Additional considerations:

Is there an opportunity to bring guest speakers where appropriate?

What forum works best for your retailers? Some examples:

An open office allow retailers to come into the Centre Management office for a defined period of time and speak to any member of the Centre Management team.

Speed Dating split the retailers up into a number of groups equal to the number of presenters, and allow ten-minute rotations with each presenter.

What time works best for your retailers?

Each centre is different, and the best time will depend on the trading pattern, opening hours and the normal hours worked by the centres retailers.

Web Based Retailer Engagement

We are currently working through a number of options that will allow GPT to engage with our retailers more seamlessly. We anticipate that vendors will be reviewed in the second half of 2019, with a solution rolled out to all centres in FY21. Appendix 7.6 includes an example of a scope that was provided by a vendor in relation to an app that would be available for retailers in a particular centre.

For centres that currently have online retailer engagement solutions (for example, closed Facebook groups), it is suggested that you continue with the strategies that are working for your centre.

Retailer Awards

In order to promote best practice, we celebrate when our retailers go above and beyond for our customers and our centre. Each asset will need to decide on the behaviours that are most important in the context of their centre. Awards could include:

Monthly Awards:

There are two elements that a store team in for brand will control that have a significant impact on a customers experience: service and store presentation.

For a service award, nominations may come from customer feedback or retailer nominations.

For store presentation, an asset team may wish to give nominations from each function within the CM team, or to all retailers to nominate themselves.

Annual Awards:

Suggestions for annual awards may include:

Centre Personality of the Year

Best Marketing Activation

New Retailer of the Year

Service Award

Best Store Presentation

Refurbishment of the year RDMs, TD or Leasing to judge the winner.

Marketing Calendar / Support Pack

Each centre has a Marketing Calendar and/or Retailer Marketing Support Pack. One of these documents should be brought to every meeting with retailers, to ensure that they are aware of:

upcoming events and marketing opportunities in the centre

who to contact

how they are getting value for their contribution to the marketing fund

Quite often, retailers will not follow our centres on social media or notice what is happening around the centre, unless an activation is specifically happening outside of their store. Communicating the events happening in the centre, and how retailers can participate, can have a significant impact on how our tenants perceive our centre.

Strategic RelationshipsObjectiveStrategic Relationships drive customer experience, sales and engagement through our key tenants. In order to ensure that we are listening to the voice of our retailers on a consistent basis, we need to identify the specific retailers that we wish to have a more detailed, ongoing conversation with.

A consistent dialogue with a specific group of retailers will:

Ensure that an asset is getting ongoing feedback on plans, activations and opportunities

Be able to road test decisions before communicating them to all tenants.

Identifying Strategic RetailersEach centre must undertake a review of its most important relationships. This could be based on:

Sales volume

Who is generating the most turnover for the centre?

Rent paid

Who pays the most rent? (can be looked at in total, or on a PSM basis)

Who pays, or has the potential to pay, turnover rent? This may include retailers close to or over their breakeven point (see section on Promoting Commercial Sustainability)

GLA

Which retailers have the biggest stores?

Brand

Some brands are a priority for assets to retain and elevate. For example, retailers that are unique / first to market.

Some brands cover multiple stores within a centre for example, the Just Group, or Cotton On Group.

Key Influencers / Ambassadors

Some of the individuals in our centre become unofficial ambassadors for our retailers in specific precincts. We can engage these influences to get effective and timely feedback, and to champion a message for the Centre Management team.

Key ActivitiesOne on One Meetings

Once key strategic relationships are identified, a clear plan for how they will be engaged should be agreed. Specifically:

The member of the Centre Management team who owns the relationship

The cadence for meetings i.e. monthly, quarterly, bi-annually.

The meetings should take place in the first half of the month to give sales insights ahead of the monthly sales report. This will allow us to understand the numbers and to give feedback to the broader business.

Collective Meetings

To facilitate conversation, our strategic retailers should be brought together for a meeting at regular intervals. These meetings should follow a similar format to Town Hall-style meetings, in a smaller, more intimate venue. The purpose of the meetings are to ensure that we have retailer buy-in to our initiatives and that we listen to any concerns that they may have.

All strategic retailers will be invited.

A member of each function from the Centre Management team will be present.

About half the time should be used for a high level presentation of how the centre is performing, with the other half used for questions and interaction.

Catering should be provided.

Listening to the people who directly service the visitors to our centres ensures all decisions are customer-focussed and will be made with the end user in mind.

Promoting Commercial Sustainability

ObjectiveDeliver on key financial opportunities for GPT and maximise the potential of each opportunity.

Understanding Key Retail DriversThere are key metrics and activities in every retail business that will drive success. A struggling retailer will often make the case that traffic is the only key driver of sales. Alternatively, a successful retailer will look to ensure sales growth of a store is significantly above traffic growth, based on the principle that if a stores sales are only increasing in line with its traffic, it has not improved on its service, offer and operations compared to the previous year.

Understanding the key drivers of a retail business will allow us to have more productive conversations with our retailers.

Sales Metrics

Sales are a result of a simple calculation:

Traffic x Conversion x Average Dollar Per Transaction = Sales

This may also be expressed as:

Traffic x Conversion x Units per transaction x Average Dollar Per Unit = Sales

Traffic The number of people that enter a store.

Conversion Proportion of people that entered a store that actually purchased an item, normally expressed as a percentage.

Average Dollar Per Unit The amount that each customer spent on average.

Per the above equations, traffic is only one factor that affects sales. By encouraging retailers to focus on the other drivers of performance, they can have a more meaningful impact on their performance.

Many retailers will not track traffic coming into their store. If this is the case, then a focus should be put on improving the average units per transaction and the average dollar per unit.

Service Performance

Examples of activities that affect conversion and average dollar per transaction:

TEAM PRODUCT SPACE

PLANNING OPERATIONAL EXCELLENCE & MARKETING

TEAM ENGAGEMENT SEASONALITY FIXTURE LAYOUT REFILLS

The store team does not come across as the most motivated team on the sales floor. At times of the year the product the store has does not match our climate and consumer needs. The stores layout is not easy for customers to shop and they struggle to find products on the floor. All styles, colours, and sizes are represented on the sales floor at all times.

SERVICE SIZING CHECKOUT EXPERIENCE BACK OF HOUSE

The store needs to improve the level of service to effectively connect with the customer. The store is often out of stock in the right sizes so customers are unable to purchase. The efficiency of the check-out experience leads to long queues, which deters customers from shopping. The BOH size is inadequate. The racking / organisation needs improvement.

KNOWLEDGE DEPTH & BREADTH FITTING ROOMS PRODUCT PRESENTATION

The store needs to expand their product knowledge to better upsell additional items. We run out of styles too early because our load-ins are too small. The location, number and our fitting room servicing inefficiency is limiting customers purchases. The merchandise of the store is not tidy or presented in an easily shoppable way, and is not inviting to customers.

AbatementsAbatements are a key lever with which centres can support retailers through short-term issues, hold a retailer into a space and to avoid vacancy. However, abatements are a limited resource and must be applied judiciously. The key question in this regard is: is this assistance going to make a meaningful difference to sustain and promote the retailer, and the centre?

From a centre perspective, the retailer is essentially asking us to invest in their business. If an abatement is being recommended to the owners, there must be a clear benefit.

Stores that are development / capital works impacted should follow a similar process to the below, but will need to be assessed on a case by case basis.

Key activities:

Undertaking the correct activities in assessing an abatement request ensures that we are making the best use of this limited resource. We must have all of the relevant information before entering the decision making process.

Initial Requests

Standard email responses have been created for initial abatement requests (see appendices). These emails request the business plan; marketing plan, profit and loss statement and balance sheet.

The principle behind initial responses is to ensure that a retailer:

takes effective, positive steps to grow their business and to avail of all opportunities presented.

gives relevant information about the overall plan for the business, and how it will be successful in the longer term.

understands that a significant level of analysis and scrutiny will be applied to their business before an abatement will be granted.

Set a Meeting

Once the requested information is received, a face-to-face meeting should be the next step to establish the reasons for a request.

Clarity on the Proposal

Understand what does the retailer want and for how long?

Ensure that you have set an end date.

Business Health Check:

Regarding the Financial Statements, it is prudent to check:

Is GP in line with Urbis averages?

Are wages in line with ATO averages? (see ATO website)

Have wages reduced in line with the reduction in sales?

Do the directors of the company have other assets?

Complete an asset search as appropriate.

Does the company/the owners have other loans?

Are they drawing a wage?

Do they own the equipment they are using?

Marketing

Has the retailer engaged the centre marketing team to do in-centre marketing?

Has the retailer provided offers for centre activations / VIP Shopping Days?

Does the retailer have an offer on the offers page of the website each week?

How has the retailer engaged with other retailers in the centre to promote their product?

Service:

Has the retailer received a compliment for your service in the last four weeks?

Does the retailer use retail metrics?

Can the retailer demonstrate that they have improved average dollar, conversion or UPT?

Are the store team measured on conversion, average dollar per transactions?

Is the store team incentivised?

Ie, do team members receive a bonus if the store achieves its budget for a week/month/year? If a store does not set sales budgets, a suggestion may be for a retailer to identify the breakeven point for the business, and to incentivise team members to achieve this goal.

Standards:

Has the retailer engaged our marketing team for VM support? (if applicable to retailer)

Does the store reflect the agreed fit out?

This should be a prerequisite to any discussion. Therefore, even if an abatement is not granted, noncompliance will be addressed.

Solutions before cash

Giving away an abatement should be the last option. Negative impacts of abatements include financial impact to the centre and negative perceptions of rent and of the value proposition of the centre.

Abatements are also unlikely improve a retailers performance. A retailer should be encouraged to develop an action plan (with Centre Management/Marketing support) that will enhance performance, with the results of this monitored before an abatement is considered. An example plan includes:

An additional step that may be taken would be to engage a retail consultant. The current rate for the Australian Retail Association (ARA) is approximately $1,800 plus GST per day.

Turnover RentThe objective in relation to turnover rent is to maximise the income opportunity for the centre, through supporting our top performing retailers.

Key Activities

Risk and Opportunity Identification

Turnover Rent risks and opportunities should be identified each month in time for the MARS meeting.

Tenants who are between 90% and 105% of their breakeven point should be considered both an opportunity and a risk.

New retailers, who may achieve turnover rent on a pro-rata basis, should also be considered an opportunity. This is particularly true for retailers who open in October/November, as their sales will include a peak period, while their rental payments remain flat.

Retailers who pay most turnover rent should be met with at least twice a year to understand how their business is tracking. A simple guide would be to meet with them in each of February and August to ensure that our forecasting of their sales is accurate at Q2 and Q4. This will also allow us to understand if there are any opportunities to further drive their sales.

Actions to Take

Understand the sales trends - are sales increasing over time, or reducing?

Meet with the retailer to understand:

the steps they are taking to drive sales

how they are driving their brand proposition

their trading pattern throughout the year

which events/occasions will be key to their success

Align with the centre Marketing team to develop a strategy to support sales.

Capped Occupancy Retailers

These should be treated in a similar way to Turnover Rent risks and opportunities.

Sales and performance needs to be monitored each month to understand if the retailer is at risk of requiring a refund on their rent. Sales for a retailer on a capped occupancy deal should be forecast for the length of the deal. Any refund to base rent should be forecast in the abatement line.

Any risk to sales, or any opportunity to improve sales for the retailer should be considered in light of the direct financial impact that GPT will incur. If it appears that a retailer will not achieve the sales forecast set (therefore requiring a larger than forecast payment from the abatement budget), then action will need to be taken to support the brand. Marketing and BDE teams should be included in these discussions to ensure that all avenues to mitigate risk to GPT are being explored.

End-of-Lease RetailersMaximising Base Rent and RetentionObjective

Ensure that GPT is retaining retailers and minimising unnecessary churn through gaining an understanding of a retailers business. We will also minimise vacancy and rent-free periods/capital that need to be offered to incoming retailers.

Key activities

Identifying Expiring Retailers

At any given time, the Centre Management team should be aware of the retailers that have lease expiry dates that are nine to twelve months away. When lease negotiations begin, a retailer may become guarded about the details they wish to share, which can make it difficult to ascertain relevant details about their business.

Pre-Lease Negotiation Meetings

Depending on the relationships that has been established with a retailer over the term of the lease, an informal meeting should occur to learn details of the individuals business.

The key objective of a meeting is to allow the Leasing team to understand how the business is performing, the factors that are affecting sales and it expects to perform in the future.

The most important pieces of information to establish are:

Gross margin on the products being sold

This can also be quantified as the cost of goods sold

Wages as a percentage of sales

Other details that would be useful to establish:

The position of the store in the portfolio

Is it the top, middle or bottom store? How does it perform against stores in nearby centres?

What is happening with the brand?

Is the retailer investing in additional stores or marketing activities?

Is the retailer investing in new store fitouts?

Is the retailer elevating their product line or introducing new categories?

Are there store issues that would affect sales?

Ie has the store been without a store manager for the past three months, negatively impacting sales?

What are the pressure points from a cost perspective?

For example, in a business that imports a significant proportion of its stock, the performance of the Australian Dollar against other currencies may impact profitability and/or prices being charged to customers.

Any detail gained should be entered into Salesforce as the space profile of the tenancy, to ensure that all team members who are undertaking actions in relation to the lease are aware of the detail.

All of the above will give the Leasing team confidence that we are in a strong negotiation position to achieve the best outcomes for our assets and GPT as a whole.

Leaving GPTObjective

It is critical that retailers leaving GPT continue to view its time in the centre as a positive experience.

The very nature of retail means that the majority of people in any brand have worked for at least one, if not multiple, brands. When a retailer leaves, we have the opportunity to future-proof our relationship with other retailers by ensuring that we leave a positive impression with the individuals who work for this brand.

Key activities

Store Team

Prior to the last day of trade, the Centre Manager or Retail Manager should attend the store to speak with the store manager, to thank them for their time at the centre and to wish them all the best for the future.

Owner / Head Office Team

When the handback notice for a retailer is completed, the Centre Manager or Retail Manager should call the relevant person from the retailers management structure to thank them for their time at the centre and to wish them all the best for the future.

Gifts

Discretion should be used when deciding on whether to purchase a gift to an exiting retailer. This will depend on the tenure of the retailer, the circumstances of their exit and the relationship that preceded the exit. Appropriate gifts include a box of chocolate or bunch of flowers.

AppendicesWelcome EmailHi,

Welcome to Highpoint and congratulations on your new store. Highpoint is the premium shopping destination in Melbournes West, where one million people from all walks of life come together to discover new ideas and experiences.

The GPT Group is proud to have responsibility as owners and managers of Highpoint. We welcome you into our community of retailers and look forward to working with you in building on the success of this unique retail, entertainment and leisure destination. Highpoint has over sixteen million visitors annually, which presents a fantastic opportunity for any new addition to our retail community.

My name is Denis Ryan, I am one of the Retail Managers for GPT at Highpoint. As such, I will be one of your key contacts in the centre moving forward. Once you have settled into the store, it would be great to meet for a coffee to discuss the centre generally and how we can support you being successful in the centre.

Attached to this email, you will find some key information that will assist you with your trading at Highpoint. It provides valuable information on operations, marketing and administration functions. It is also designed to be a working document with an annual planner, space to store memos and campaign material, and the necessary forms for employment, parking and security. Most importantly, the manual is designed to enhance your day to day working relationship with the Centre Management team - not replace it.

I encourage you to meet with members of the team on a regular basis and be as active as you can in Highpoint promotions and activities.

We wish you every success at Highpoint.

Kind Regards,

Retail Manager

New Retailer Contacts Form ExampleCharlestown Square Retailer Contact Details

Please fill out and deliver the below form to the Centre Management Office when there is a change in any contact details. Or you can email sales.charlestown@gpt.com.au when there is a change.

Shop Name: ________________________________ Shop Fax: ______________________________________

Shop Email: ________________________________ Shop Phone: _____________________________________

Store Managers Details (After Hours contact)