Retailers and landlords’ uncertain fate: assessing future lockdown impacts
Retail landlords are at the frontline of the economic crisis triggered by the Covid-19 pandemic within the real estate sector. Many variables will influence how landlords, and retailers, will fare in the months and quarters ahead. First, the macro context. UK GDP fell by 19.1% in the three months to May 2020, according to the Office of National Statistics. Andrew Bailey, Governeor the Bank of England, said last week that the economy contracted between “23% and 25%” in the second quarter relative to the end of last year. While an easing in lockdown restrictions has had a positive effect on some sectors – such as the housing market, which has seen increased activity – retail, leisure and hospitality are still struggling.Protracted pandemic headwinds put retail landlords at centre of property sector liquidity crisis
Retail landlords’ rates of rent collection have emerged as a proxy for solvency status across the broader retail and leisure sectors. Disrupted business activities for those retailers reliant on traditional bricks and mortar footfall is severely denting their ability to make rental payments. Covid-19 has hastened the demise of the retail sector already locked in a perpetual decline for more than a decade. Driven by shifting consumer behaviour, sometimes characterised as ‘the Amazon effect‘, this decline has gathered momentum alongside the increased sophistication of supply chains and last-mile delivery infrastructure.UK economy braced for record quarterly economic contraction with more pain to come
The UK economy is braced for a record double-digit contraction in economic activity for the second quarter, with the economy expected to be worse affected than many of its European neighbours and possibly even the US.Find the right professional using the below dropdowns. Our reach covers the globe with a network of over 300 offices.
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