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AVERAGE EFFORT RATES (%) BY TENANT CATEGORY

One of the most important profitability indices is an effort rate. The ratio is defined as the

relationship between rent and service charges vs. turnover. According to CBRE’s database

the average effort rate is at 14.5% and ranges depending on the tenant’s category as well

as the size of the city and where the subject shopping centre is located.

The highest effort rate is registered by entertainment brands, multiplex cinemas as well as

tenants from the accessories & gifts and children’s fashion & toys categories. Conversely,

the lowest effort rate is recorded by grocery stores and multimedia brands.

The higher the effort rate, the greater the occupancy cost for tenants. This could cause

retailers to struggle with covering occupation costs.

In the case of tenants representing electronic equipment, an effort ratio at the level

of about 5% is considered as healthy, due to the fact, that such tenants operate on low

margins.

0% 5% 10% 15% 20% 25% 30% 35%

Accessories & Gifts

Children Fashion & Toys

Entertainment & Cinema

Fashion

Groceries

Health & Beauty

Hobbies

Homeware & Electronics

Jewellery

Multimedia

Restaurants & Cafes

Services

Shoes & Leather

Sports

Series1

Source: CBRE, 2016

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© 2016 CBRE