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Guy

18 Mar 2020

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What will be the impact of COVID-19 on commercial retail space/rents over the next 12 months?

I've read many articles about how the coronavirus has hurt businesses and the economy. What are the extent of the impacts and should I be worried?

Discussion (2)

What are your thoughts?

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I take opposite view vs Sudhan. I think the situation will be contained by June as all governments are taking stronger action by now.

The problem is can the shops survive until June?
The smart ones will...

  • Restaurant cannot do eating in will just have to adapt to doing takeout promos, prepackaged meals

  • take the pain and straddle labor accordingly to manage costs

  • develop automated self check out counters

  • make more use of vending machines

I guess things will be bad, but I don't see doomsday. If you want to survive, you will do what is necessary, and governments are already giving a lot of help, plus interest rates are coming down.

Those that can't just have to tweak or change their business model to survive in the long run.

Hi Guyi Shen, my take is that if the coronavirus pandemic is prolonged, and we go into a recession, people could curb their retail spending extensively, affecting the sales of retailers in the process. That could then cause retailers to shutter their stores. With a higher supply of retail space than demand, rents could fall, until an equilibrium is reached. ​​​

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