A shopping mall may have an impressive total floor area. But it counts for nothing if this abundant floor area does not translate into revenue for the shopping mall or the REIT owning the shopping mall. This is where the concept of Gross Leasable Area (GLA) comes in. Gross Leasable Area is a measure used in the real estate industry to indicate the amount of floor space within a property that can be rented out for income. It is generally expressed in square metres, although investors in the US and Canada will be more accustomed to the square foot variant.
One of the indicators of good REIT management is its ability to maximise the ratio of Gross Leasable Area (GLA) as a percentage of Gross Floor Area (GFA) by creatively converting basements, mezzanines and otherwise unproductive spaces into as much income producing spaces as it is legally and operationally possible. However an office or a shopping mall with crammed walkways and limited recreational spaces may also put off shoppers and tenants. This is where creative optimisation abilities of the REIT managers will have to be depended upon.