The survey found around 45% of tenants expect their sales will drop by at least 30% in 2020, while 39% except a drop of up to 30% due to the temporary activity halt.
“Long term effects are still difficult to assess considering uncertainties over further restrictions authorities could impose after May 15. Still, retail space owners have taken measures to support tenants such as suspending rents or partially shutting down shopping centers to lower costs on joint services paid by tenants,” Colliers analysts said.
According to the survey that polled tenants active mainly in segments like fashion, hospitality, cosmetics, services, entertainment and beauty, since the state of emergency started mid-March, 62% have suspended or postponed rant and utility payments, while 52% have requested lower rents upon reopening to allow their business to recover, 88% have resorted to furlough, 48% will postpone tax payments and 33% will suspend bank loan repayments until the end of the year.
On the other hand, 67% of retailers are focusing on alternative sales channels to keep their businesses afloat. Around 36% expect their online sales to grow this year and half of these expect growth of at least 20%. Still, 22% believe their online sales would also decline due to low appetite for consumption.
The first signs of recovery in the non-food retail sector are expected in the fourth quarter and results will be visible in 2021, which means both retailers and property owners are confident in a relatively quick recovery.