Lockdown, restart, buying restraint and a lot of uncertainty: in 2020, the partnership between real estate and retail was severely tested by the corona-related restrictions. But, according to the EHI Retail Institute, a constant dialogue has in almost all cases achieved a result that the parties involved can live with well.
In 71 per cent of the leases, landlords and tenants have agreed on a fair solution, and in a further 16 per cent an agreement based on partnership is in sight, according to the results of a survey by the German Council of Shopping Places (GCSP) among its members on the current state of talks between property managers and retailers. “For the landlords and owners of retail properties, the demands of retailers for rent reductions or waivers were an additional challenge at a time when e-commerce is threatening vacancies anyway,” says Christine Hager, chair of the GCSP board, commenting on the situation.
The plight of inner cities and shopping centres
The retail trade as a whole experienced a very differentiated year 2020. The food trade boomed, also favoured by the temporary closure of gastronomy and company canteens. The trend towards domestic cocooning supported DIY stores such as furniture markets and smaller sectors such as the bicycle trade recorded considerable special effects. Textiles, especially in the high-quality sector, experienced a crash. These conditions had a major effect on the asset classes: While retail parks with anchor tenants from the food sector were very stable, city centres and shopping centres suffered from the weakness of the fashion trade.
“Particularly against the background of the considerations on the tenant mix of the future, politics could provide obvious support for retail – for example, by simplifying and accelerating the building and use laws or with pragmatic solutions for opening hours,” says Christine Hager on the wishes for politics. “Many retailers, on the other hand, still have a need for optimisation with regard to the digitalisation of the shop format,” adds Michael Gerling, Managing Director of the EHI, “because the all-clear cannot be given immediately in the retail sector in 2021. Challenges due to omnichannel still exist and if travel and gastronomy become possible again, significant sales will flow away.”
Source: EHI Retail Institute
Photo: adidas AG (Symbolic picture)