Abstract
Retail property management teams neglect the influence of occupancy costs and the resultant
profitability of different retail formats when assessing their decision to expand. The aim of this
research was to provide an easy-to-understand profitability equation for shopping centres and
stand-alone outlets to guide retail property management teams in their decision-making
process. A quantitative study, using secondary data obtained from a single retailing group and
analysed using a simplified profitability formula, was conducted. The research endeavoured to
determine the influence of rent on profitability to provide financial guidance to property
management teams when benchmarking different retail formats. This included an investigation
into the relationship between size and rent value besides the comparison of the profitability of
different retail formats. Although financial considerations form an important part of the
decision making process, retail property management teams should continue to combine the
results of financial benchmarking with consumer preferences to achieve optimum results.