Our client is a discount retail chain with over 1,400 stores worldwide, offering a wide range of low-cost merchandise, including household goods, toys, party supplies, and seasonal decorations. Despite its low prices, the company has grown to become one of Canada’s largest retailers, employing over 24,000 people and generating approximately $6B CAD in annual revenue.
The retailer relies on Nakisa's commercial real estate software to manage all real estate needs across its stores, offices, and warehouses. As the company continues to grow, it plans to expand the number of leases managed through our platform.
Director, Lease Administration
Challenges before Nakisa: Operational efficiency and compliance
Retailers have traditionally relied on physical stores to conduct their operations. While e-commerce is becoming an increasingly popular option in today’s digital age, many customers still prefer shopping in person. Retailers specializing in low-priced items continue to rely heavily on brick-and-mortar stores, as it is often impractical to sell items priced at $1 or $2 online. As a result, physical stores remain crucial to the success of dollar stores, enabling customers to browse and conveniently purchase products in person.
Our client sought a user-friendly real estate solution offering comprehensive lease administration, lease accounting, and rent management capabilities, tailored to the needs of a global retailer. Previously, they relied on an in-house built database, which lacked the necessary functionality and depended on the sole individual who created it. They chose to transition to Nakisa's commercial real estate software to gain a robust solution that would meet their current needs and scale with their business and operational requirements.
With Nakisa's commercial real estate software, the large discount retailer has achieved:
- Global visibility of their commercial real estate information
- Reduced risk of errors with automated critical dates and predefined workflows
- Full accounting compliance with IFRS 16 for all leased retail stores
- Costs efficiencies with native ERP integration to streamline operations
The requirements: Core real estate functionalities provided in easy-to-use software
Like most global retailers, our client needed to be able to specifically manage:
- Seamless bi-directional integration with SAP ERP
- Consolidated view of real estate leasing portfolio
- Lease accounting compliance and maintenance
- Critical dates, rents, and other contractual obligations
- Multiple different areas (selling, storage…)
- As much detail as possible in the rent section
- Percentage rent based on sales (i.e., performance rent)
- Ability to reconcile rents on a provisional basis
- Leasing incentives and accounting compliance
- Lease conditions and clauses
- Other types of information like open hours
- Paying different vendors for the same location
- Store selection and development
The solution: End-to-end real estate management and seamless data flow from Real Estate to SAP
The discount retailer selected Nakisa’s real estate management software as its primary tool for handling all real estate and accounting compliance (IFRS 16) requirements. Below, we will outline each of these requirements and explain how Nakisa’s solution has helped the retailer meet them.
Seamless bidirectional integration with SAP ERP
Before implementing Nakisa, our client’s ERP system and in-house real estate solution were not integrated. Now, thanks to NRE’s bidirectional integration with SAP, the two systems are fully connected. SAP automatically pushes vendor and location data to Nakisa, streamlining the process. This integration allows the retailer to send rent payments to the ERP system and receive timely feedback on any failed transactions or errors. Such integration is crucial for accounting control, as it minimizes manual tasks and reduces the risk of errors. Manually entering data into real estate software and then duplicating it in another system, such as an ERP, increases the likelihood of mistakes—a risk that all retailers strive to mitigate by integrating their CRE software with their ERP systems.
Consolidated view of real estate leasing portfolio
Our client’s organizational structure is designed for efficiency, featuring a lower real estate manager-to-user ratio and a streamlined approach to data management. The company benefits from consolidating all core information—such as lease contracts, dates, documents, and rent payments—into one accessible location, with access granted to multiple departments and third-party entities. They frequently praise Nakisa software for its ease of use and quick information retrieval, which were key factors in their decision to select this solution.
Lease accounting compliance and rent payments
The discount retailer needed a tool to ensure compliance with IFRS 16 and provide a central repository for all their agreements. They chose Nakisa due to its native ERP integration, which has significantly streamlined their lease accounting processes. Nakisa is fully compliant with both ASC 842 and IFRS 16 lease accounting standards and can seamlessly embed accounting policies within the platform. By integrating accounting and compliance functions with commercial real estate software into a single solution, all accounting-related items—from expenses and purchase orders to invoices and more—are automatically and compliantly processed for reporting. This integration eliminates the need for separate solutions, simplifies the management of materiality thresholds, and ensures accurate financial reporting.
Through integration, Nakisa's real estate software is linked to the retailer’s system of record for their sales data, ensuring that all sales numbers are accurately reflected on the platform. The lease conditions matrix and our client's maintenance system are fully integrated, allowing for seamless data transfer between the two.
Critical dates, rents, and other contractual obligations
The discount retailer’s business model depends heavily on store selection and development. Retailers invest significantly in choosing and setting up their locations and need to maximize the value of these investments. Therefore, maintaining a positive relationship with landlords is crucial. To avoid potential issues, retailers must monitor critical lease dates and obligations, such as renewal dates and rent payments. Effective lease management is essential for the long-term success of retail stores. With Nakisa’s real estate software, our client can view key deadlines and milestones through the critical dates dashboard, which provides real-time status updates to optimize daily property management tasks.
Percentage rent and expense monitoring for smooth reconciliation
Effective cost control and expense management are crucial for our client due to their narrow profit margins. This involves meticulous monitoring of expenses, including tracking lease-end reconciliations and percentage rent payments. Additionally, the retailer extensively utilizes Nakisa’s 'Occupancy Cost Analysis' module to report on all costs and detail each cost item, helping to identify the largest expenses. The module allows them to upload actual costs from their SAP ERP for any expenses not processed through Nakisa. This capability enables them to compare the actual total cost per expense for each lease or location, providing a comprehensive view of their costs, which is essential for their cost-cutting efforts.
Nakisa's commercial real estate software offers ad-hoc reports, dashboards, and advanced analytics that present data in a visual format, enabling end-users to slice and dice information by various attributes and simplifying analysis. This visibility and flexibility help the large discount retailer optimize operations and ensure long-term profitability at the store level.
Lease conditions and clauses
In the real estate industry, tenants are often given the opportunity to renew their leases on predetermined or renegotiated terms. Missing these options within the specified deadlines can lead to significant rent increases and potential eviction by landlords. With our client operating numerous retail stores both in Canada and globally, it is crucial for them to stay informed of such clauses and deadlines to avoid potential damages or unexpected costs.
Nakisa’s real estate solution provides the discount retailer with timely notifications of critical dates and other important information through features such as the 'Option-to-Renew' dashboard, ad-hoc reports, the action center, the notification center, and email notifications (client configuration required).
Paying different vendors for the same location
For our client, like many other retailers, it’s common that the retailer may need to pay multiple vendors for activities in the same store. Retailers may pay one vendor for rent and another for marketing and promotional activities. In Nakisa's commercial real estate software, a recurring payment can be generated to pay the other vendors for these services. This ensured that our client could pay all vendors fairly and promptly, while also streamlining the payment process and being fully compliant with the accounting requirements of IFRS 16.
Why Nakisa's commercial real estate software?
For our client, a large, global discount retailer, where real estate is pivotal to business success, finding the right real estate management software was critical—so much so that the CEO was directly involved in the search for a solution. After evaluating multiple vendors, the CEO and lease administration team selected Nakisa software for its robust functionality, intuitive user interface, and deep industry expertise of the Nakisa team.
Nakisa's commercial real estate software is a cloud-native solution that empowers real estate teams to streamline their day-to-day operations and achieve superior real estate portfolio management and accounting compliance. Designed with commercial real estate logic in mind and tailored to the needs of enterprise tenants, Nakisa offers a wide range of industry-specific features, including CAM reconciliation, payment and rent tables, percentage rent, customizable reports and dashboards, critical date alerts, currency translation, site selection, and a vendor payment portal.
With bidirectional integration with ERP systems like SAP and Oracle, seamless integration with lease accounting solutions, and compliance with key regulations like ASC 842, IFRS 16, GASB 87, AASB 16, GDPR, and ITGC, Nakisa is a comprehensive and flexible solution that delivers powerful real estate management capabilities to complex large enterprises.
Nakisa is built on Nakisa’s microservices that provide agile updates, scalability, and integration. All Nakisa SaaS components are monitored for both performance and security 24/7/365.
Nakisa’s commitment to customer service was also a decisive factor. At Nakisa, providing exceptional customer service is a source of pride, and it sets us apart from our competitors. Our clients consistently praise the quality of our service and the positive impact it has on their daily work experience.
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