The uncertainty of repeated lockdowns, the inconsistent approach of different governments and the overly onerous focus on retail landlords to support an industry in crisis, is not sustainable.
So says the European Council of Shopping Places which has released a position paper that has been prompted by the financial effects of Covid-19 on the retail property sector.
The ECSP paper calls on relevant authorities to urgently consider five measures that could help mitigate the impact and risk associated with the pandemic on Europe’s retail property sector.
ECSP’s five measures to mitigate impact
First, financial provisions should be reviewed with the suspension or waiver of financial covenants. Second, there should be increased financial and banking flexibility and extended timelines. Third, a more holistic approach to subsidies is needed, where the burden is shared. Fourth, guidelines should be prepared providing basic rules and principles on asset classification and property tax payments. Lastly, credit lines should be offered to retailers.
Covid-19 continues to have unprecedented consequences on the life of European citizens, the economy, and society as a whole, the council said. Meanwhile, retail landlords across Europe are having to shoulder the economic consequences of significant drops in footfall, rent collection, and increased costs, with very little financial help, support or guidance.
“Shopping places are working hard to manage the situation from a commercial and operational perspective, providing access to essential goods and services despite rapidly changing circumstances,” says Joost Koomen, ECSP’s secretary general.
“However, the closure of hundreds of thousands of shops, stores, bars, restaurants, and places of commerce across the EU is hitting our sector extremely hard,” he said.
He adds: “We call for a coordinated strategy and approach to ensure that this short-term crisis does not have a longer-term detrimental impact that could result in closures, bankruptcies, and rising unemployment.”