Yesterday, I took part in Bisnow’s Retail Reloaded webinar to interview Jaap Tonckens, CFO for Unibail-Rodamco-Westfield. The discussion looked to debate the impact Covid-19 has had on investor and lender appetite for global retail assets, which assets look to benefit from this environment and to understand the strategies in place for re-opening.
For me, this discussion drew out some key areas which I’ve outlined further below:
- On opening footfall is approximately 50% down from the previous year, but recovers to around 80% within a month of reopening although restrictions remain mainly around leisure, food and beverage. In contrast turnover is only down by 10-20% and average spend has increased.
- Early discussions with tenants helps, whilst accepting short term reductions it’s important to have agreements in place that outline the temporary changes and capped reductions.
- Where retailers are unlikely to have long term futures, make early decisions on what to do for example temporary letting of space and do not delay preparing planning applications for repurposing/change of use.
- URW is particularly looking at options for providing workspace and other complementary uses such as hotels and is not just focussing on residential
- Reviewing previous schemes, are they still fit for purpose? Taking time to review developments.
Overall: think longer term. Real estate is a long term business, and whilst short term decision may need to happen, core shopping centre assets will always be there - they just may need to be adapted to reflect the local demographic, which may include workspace and residential where appropriate.
If you missed out, take a look at the full interview here.