Major shopping centres in Victoria have seen a collapse in foot traffic this week as result of the surge in Covid infections. Even centres in areas outside the regions hit with infections have seen traffic numbers fall.
Talking to different retailers, sales revenue Monday through Thursday this week is down between 33% and 75% comparing with recent data for the same days.
Some retailers who felt they were climbing out of a Covid pit have found themselves at the bottom of the Covid pit, again. Rosters are being reassessed along with trading hours.
The actions of Victorian shoppers are showing a weakness in large shopping malls in that high street businesses seem to be unaffected by in the spike in Covid infections. We saw this earlier in the pandemic and to see it again now reinforces the feeling that the value of shopping centres has diminished, maybe for the longer term.
Just read that mall operator Vicinity wants to include on line sales of tenants in determining rent. What planet are these guys on ?
Here is the story: https://www.commercialrealestate.com.au/news/retailers-reject-landlords-plan-for-a-cut-of-online-sales-965203/
Shopping centres are in trouble. For decades their tenancies have been in high demand. No longer. I suspect this will cause more missteps like this attempt by Vicinity.
The comment at the end sums it up for me
….”I think for landlords their job is really to generate foot traffic ……”
And when foot traffic falls, rent falls.
I hope someone publishes standard lease clauses that encompasses up and down rent reviews. For sure the landlords will never provide them.
Colin I think you will see businesses not renew leases. Only then will landlords engage.