_Shift in Tenant-Landlord Relationships Post-COVID-19

As landlords and tenants anticipate resumption of mall activities post-circuit breaker, the relationship between them will transform to one akin of a partnership. With more transparent rent structures based on a higher turnover rent component, the retail landlord will be successful only if the tenant does well. Both parties will have to work together to overcome the challenge of attracting mall footfall while observing safety measures in crowd control.

Attracting Footfall

Besides investing in safety monitoring and hygiene systems to create a safe environment for their shoppers, retail landlords would be expected to increase advertising and promotion efforts to attract shoppers and boost revenues for their tenants. 

Physical Shop Spaces

Physical shops may not be the primary point of sales in a post-coronavirus world, with the proliferation of e-commerce during the circuit breaker Landlords are encouraged to reassess optimum shop sizes to attract and retain retail tenants who value space usage flexibility and efficiency.

Rental Structures

Shorter lease terms and flexible rent structures are likely to attract stronger tenants. A hybrid rent structure comprising of a low base rent with a higher percentage of sales component will be key in curating a desired tenant mix that can draw footfall traffic to the mall.

Stronger Retail Concepts

The retail landscape will experience substantial structural change with the elimination of weaker retailers. Entrepreneurs with innovative retail concepts and can connect effectively with their customers across multiple platforms will be incentivised to set up shop, strengthening the shopper experience and creating a destination draw for the mall.

Retailers and landlords who respond nimbly to the evolving retail trends will overcome the challenges presented by the coronavirus pandemic; partnering to improve shopper experience and create new value in this turning point of Singapore’s retail landscape.

Click here to read more on Opportunities for the Retail Sector after COVID-19.

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