A mall typically generates revenue through a combination of rental income and percentage rent.
Rental Income: The mall owner or operator leases retail space to various tenants, such as clothing stores, restaurants, and department stores. The tenants pay rent on a regular basis, such as monthly or annually, to the mall owner or operator.
Percentage Rent: Some malls also charge tenants a percentage of their sales in addition to their base rent. This percentage is typically based on a percentage of the tenant's sales above a predetermined threshold, known as the "breakpoint." This is used as an incentive for the mall to attract high-performing tenants, and for the tenants, to have a better revenue sharing with the mall.
Advertising: Some malls also generate revenue from advertising and sponsorships from brands, events, and other promotions.
Amenities: Some Malls may also generate revenue from the amenities they offer, such as parking fees, movie theaters, and other entertainment venues.
Other: Some Malls may also have other sources of revenue such as food courts, vending machines, and other services.
A mall business expenses include:
Property and Building Maintenance: The costs associated with maintaining and repairing the mall buildings and property, such as landscaping, HVAC systems, and roofing.
Security: The costs associated with providing security for the mall, including hiring security personnel and security systems.
Insurance: The costs associated with insuring the mall buildings, property, and tenants' businesses.
Utilities: The costs associated with providing electricity, water, and other utilities to the mall.
Marketing and Advertising: The costs associated with promoting the mall, such as creating and distributing print and online advertisements, and hosting events.
Administrative and General: The costs associated with running the mall, such as office rent, office supplies, and legal and accounting fees.
Management: The costs associated with managing the mall, such as hiring a management company or mall manager, and paying their salaries.
Taxes: The costs associated with complying with tax and other legal requirements, such as property taxes and business licenses.
Capital Expenditures: The costs associated with making long-term investments in the mall, such as renovating the buildings, upgrading infrastructure and purchasing new equipment.