The shutdown is affecting shopping centres particularly badly. What's the situation here?
Patrick Homm: All of the major shopping centre operators are suffering massively with the current situation. They have been particularly badly affected by lost rent and operating costs. You should also bear in mind that the operating costs of a shopping centre are significantly higher than those on the high street.
How are operators reacting now?
Patrick Homm: Even though most shops are closed, the workload in the background is increasing enormously. Currently, people are mainly busy proactively engaging in dialogue with tenants to find a mutually acceptable solution. We presently believe that it will be possible to better assess the situation in summer.
What impacts is the corona crisis having on owners?
Stefan Braune, Real Estate Agent Retail: They too are having to battle major losses in the form of lost rental income. This is true of both institutional owners and private owners. Planned investments in respective properties are therefore being held back in some cases and purchases as well as ongoing negotiations are being delayed.
What's your advice to owners in this situation?
Stefan Braune: To proactively seek out dialogue with tenants in order to find a long-term solution together, perhaps using a mediation process. Especially in the case of rental agreements with remaining terms of several years, a complete loss of the tenant is often more devastating than a temporary compromise. For large owner-managed companies, it is advisable to inform investors at an early stage and to request approval for further action in order to create a transparent flow of communication and a certain amount of room for manoeuvre.
Who are the current winners and losers in this crisis?
Anthony Crow, MSc. Senior Real Estate Agent Retail: The biggest losers so far have been the shoe, leather goods and textile businesses, as well as the service sector in shopping districts, shopping centres and retail parks. In addition to retailers, restaurants, bars, cafés and bakeries have also lost out. These sectors are witnessing drops in revenue of up to 80 % in some cases, and are fighting for survival. Companies that have in particular specialised only in static retail and are unable to generate any turnover through deliveries or online shopping are enormously affected and are expected to face severe pressure in the medium term.
And who are the "winners" in this situation?
Anthony Crow: The economic profiteers in the corona crisis are pharmacies or tobacconists, but also drug stores and online trade. Suppliers of pharmaceutical, medical and cosmetic products are also recording solid growth. Of course, food retailing is worthy of special mention, where, in addition to supermarket branches, delivery services for food and drug stores are also enjoying above-average demand. However this trend has already started to fall again. The term 'trade in transition' is undoubtedly the reality from at least this point forward, and we assume that the real effects will not be felt until the summer.