As retail business came to a standstill in the months of March and April while some even continue into May, national retail chains in Europe and US are crumbling.
With most of them negotiating rent agreements with landlords or not being able to pay rents altogether, mall operators’ rent collections have hit rock bottom, casting doubt over the ability to sustain business.
April saw only 15 per cent rent collection for mall operators in US and the trend is forecast to fall further for May.
As many retailers like Macy’s and Tapestry struggle to reach common consensus with mall owners, the inability to meet the rent agreements has led to store closures all over the country.
Retailers are of the view that rents have been riding too high in the recent past and in order to keep more stores from either leaving premises or closing down, mall owners will have to rethink their rent strategies.
Retail rents have risen by 2.6 per cent over the last 3 years in US; however, real estate analytics firm CoStar Group estimates that rents are likely to fall 8-13 per cent post the coronavirus crisis.