Pandemic accelerated ‘long-needed’ discussion on retail

People are likely to look back on Covid-19 as a major accelerator of a discussion that retail sector landlords and retailers have long needed, says Justin Curlow, Axa IM Alts’ global head of research and strategy.

Investing in supply chains and inventory management systems to create omni-channel businesses has been a drag on profits. The pandemic has accelerated the discussion that was needed on rents, right-sizing store networks and to “get something more sustainable from an overall business model that aligns the bricks and mortar with online presence to allow for that omni-channel business model and the rent overage situation that we’ve had over the course of the past five to ten years,” Curlow said.

Meanwhile, a resurgence of demand for the leisure travel sector seems likely as economies start to reopen. While biased towards short-haul travel to start with, Curlow says that in a couple of years time, as herd immunity is reached globally, longer haul travel, business travel and conferences are likely to resume, Curlow pointed out to Real Asset Media’s Richard Betts.

Curlow said we are still in a low-interest rate environment despite recent rate increases. “I think the capital side of the equation will continue to be supported by the wider financial markets and the real focus going forward is going to be on the income side of property performance.”

Click on the video above to watch the full interview or listen to the podcast below.