Line of Business: Finance Suite
Dollarama is a Canadian discount retail chain founded in 1992 with over 1,450 stores across the globe, selling a wide range of low-cost merchandise such as household goods, toys, party supplies, and seasonal decorations. Dollarama is the largest Canadian retailer of items for five dollars or less and owns 51% of Dollarcity (Dollarama structure in LATAM). Despite its low prices, the company has grown to become one of Canada’s largest retailers, employing over 24,000 people and with annual revenue of more than $4.3 billion CAD.
Dollarama relies on Nakisa Real Estate software (NRE) as its primary tool for managing all its corporate real estate needs for its stores, offices, and warehouses. As the company continues to grow, they plan to increase the number of leases managed through the platform.
Retailers have traditionally relied on physical retail stores to conduct their operations. Although e-commerce is becoming an increasingly popular alternative for many retailers in today’s digital age, many customers still prefer to shop in person. Dollar stores, such as Dollarama, which specialize in selling low-priced items, continue to rely heavily on their brick-and-mortar stores since it’s not practical to sell items priced at $1 or $2 online. As a result, physical stores continue to play an important role in the success of dollar stores, allowing customers to browse and conveniently buy products in person.
Dollarama was in search of a user-friendly real estate solution that could provide comprehensive lease administration, lease accounting, and real estate rent management functionality, aligned with the requirements of a global retailer. Prior to the selection of Nakisa Real Estate management software, they were using an in-house built database that did not provide all the functionality they required and was dependent on the only person who built it. They decided to switch to a new software solution that could provide them with all necessary functionalities while also being able to grow with their business and operation needs.
Dollarama chose NRE as its primary tool for managing all its real estate management and accounting compliance (IFRS 16) requirements. As follows, we will go over each of Dollarama’s requirements and how NRE has assisted Dollarama in meeting them.
Prior to implementing NRE, Dollarama’s ERP system, and in-house real estate solution were not integrated. The two systems are now fully integrated thanks to NRE’s bidirectional integration with SAP. SAP pushes vendor and location data to NRE automatically, streamlining the process. The bidirectional connection between NRE and ERP allows Dollarama to send rent payments to ERP and receive timely feedback on any failed transactions or errors. This level of integration is critical for accounting control purposes, as it helps to minimize manual tasks and reduce the risk of errors. When data is manually entered into Real Estate software and then duplicated in another system (such as an ERP), the likelihood of errors increases. This is a risk that all retailers aim to mitigate by integrating the CRE software with their ERP system.
Dollarama’s organizational structure is designed for efficiency, with a lower real estate manager-to-user ratio and a more streamlined approach to data management. The company benefits from the ability to consolidate all core information in one place (lease contracts, dates, documents, rent payments, etc.), with access granted to multiple departments and third-party entities. Dollarama frequently praises Nakisa Real Estate management software’s ease of use and quick information retrieval, which is one of the main reasons they chose this solution.
Dollarama required a tool to ensure IFRS 16 compliance while also providing a central repository for all their agreements. They chose Nakisa because of its native ERP integration, which has also greatly aided in streamlining their lease accounting processes. NRE is not only fully compliant with the lease accounting standards of ASC 842 and IFRS 16, but it can also seamlessly embed accounting policies within itself. By integrating an accounting and compliance tool with a corporate real estate software into a single platform, all accounting-related items from A to Z (including expenses, purchase orders, invoices, and more) are automatically and compliantly transitioned for reporting purposes. This eliminates the need for maintaining separate solutions, managing materiality thresholds, and ensuring proper financial reporting.
Through integration, Nakisa Real Estate is linked to Dollarama’s system of record for their sales data, ensuring that all sales numbers are accurately reflected in the platform. The Lease Conditions Matrix and Dollarama’s Maintenance system are completely integrated, allowing for seamless data transfer between the two.
Dollarama’s business model relies heavily on store selection and development. Retailers invest a lot in choosing and setting up shops and need to realize the highest value out of this investment. For this reason, maintaining a positive relationship with the landlord is vital. As a result, retailers must keep track of lease critical dates and obligations, such as renewal dates and rent payments, to avoid any potential issues that may arise with their landlords. Finally, effective lease management is critical to the long-term success of retail stores like Dollarama. Dollarama gets an overview of critical deadlines and milestones with NRE’s critical dates dashboards, which provide the team with real-time status updates to optimize daily property management duties.
Effective cost control and expense management are crucial for Dollarama due to its narrow profit margins. This entails meticulous monitoring of expenses, such as tracking lease end reconciliations and percentage rent payments. Additionally, Dollarama also makes extensive use of the NRE “Occupancy Cost Analysis” module as it is important to report on all costs and define each cost item in detail to identify the largest expenses. Nakisa Real Estate “Occupancy Cost Analysis” module allows them to upload actual costs of any other expenses that are not paid through NRE from their SAP ERP. This allows them to compare the actual total cost per expense for a given lease or location and therefore have a comprehensive picture of their costs, which is critical for their cost-cutting efforts.
Nakisa Real Estate solution’s ad-hoc reports, dashboards, and advanced analytics allow data to be presented in a visual format giving end-user the ability to slice and dice data by different attributes and making analysis easier. By having this level of visibility and flexibility, Dollarama is now able to optimize its operations and ensure long-term profitability at the store operation level.
In the real estate industry, tenants are often provided with the opportunity to renew their lease on predetermined or re-negotiated terms. Failing to exercise these options within the specified deadlines can result in significant rent hikes and eviction by landlords. With Dollarama having numerous retail stores not only in Canada but also globally, it is imperative for them to stay informed of such clauses and dates to avoid any potential damages or unexpected costs.
Nakisa real estate solution provides Dollarama with timely notifications of critical dates and other important information through various features such as the “Option-to-Renew” dashboard, ad-hoc reports, action center of the application, notification center, and email notification (requires client configuration).
For Dollarama, 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 Real Estate, a recurring payment can be generated to pay the other vendors for these services. This ensured that Dollarama could pay all vendors fairly and in a timely manner, while also streamlining the payment process and being fully compliant with the accounting requirements of IFRS 16.
For Dollarama, a company where real estate plays a pivotal role in business success, finding the right real estate management software was critical, to the point that the CEO was directly involved in the search for a real estate solution. After evaluating multiple vendors, the CEO and lease administration team selected NRE for its robust real estate functionality, intuitive user interface, and deep real estate knowledge of the Nakisa real estate team.
NRE is a cloud-native solution that empowers corporate real estate teams to streamline their day-to-day operations and achieve superior real estate portfolio management and accounting compliance. Designed with corporate real estate logic in mind, NRE 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, NRE is a comprehensive and flexible solution that delivers powerful real estate management capabilities to complex large enterprises.
NRE 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.
NRE’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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