Conclusion: the crisis will be painfully felt in real estate revenue for 2020, it will require considerable effort on the part of management, but for most of the industry it will be possible to handle it.
And “apart from corona” there are positive trends as well: pedestrian and shared zones are developing positively, demand for space from the healthcare sector – also in shopping centres – has considerable potential, and structurally there is still a significant level of surplus demand in top locations.
Winners and losers of the crisis Even in the crisis, not everyone is the same: in addition to the losers, who are affected to varying degrees, there are market segments that are largely resistant and even a number of winners of the crisis. The winners: local suppliers, DIY markets, sporting goods, home furnishings, food and newcomers Retail parks with a focus on local suppliers are especially benefiting from the trend of shopping close to home. There are to some extent significant gains in revenue in the sporting goods trade (booming bicycle business), in DIY markets and in home furnishings, especially furniture retail. Garden centres are the frontrunners on the positive list, however. Food retail has also picked up somewhat, on the one hand because at least part of the time people are cooking more rather than going to restaurants. On the other hand, a growing awareness of health means consumers are increasingly reaching for (more expensive) organic products. The current upheaval also represents an opportunity for new retail concepts: innovative companies now have favourable chances at first-rate locations that would have scarcely been vacant in “normal times”. In this respect, a window of opportunity is currently opening up for newcomers with a coherent business model and solid financing, also because landlords are now even more willing to consider alternatives to the conventional branch mix. The losers: fashion, shoes, electronics and tourism hotspots The sectors with significant demand for space, textiles and shoes, report the most painful losses. Working from home and the cancellation of events do not motivate people to purchase fashion items, and the electronics industry is more sensitive than any other to the migration of revenue to online retail. In these segments, it is expected that the crisis will have longer-term effects and that less space will be required in the long term. In the short term, retail companies in the tourist hotspots such as the city centre of Vienna and Salzburg will be impacted even more. The lack of international customers is particularly noticeable in the top locations, but it can be assumed with great certainty that, first, city tourism will become significantly stronger again at the latest once a vaccine for corona is developed and, second, areas in prime locations can be quickly rented again should a tenant withdraw. Differentiated development in gastronomy and services Restaurants with a high proportion of tourists and business people, bars and clubs are among the biggest losers as a result of corona. Whereas restaurants with outdoor seating are increasingly being sought, and restaurants with a predominantly private, local audience are again reporting largely normal revenue. Among service providers, cinemas and other cultural institutions are in a highly precarious situation. On the other hand, there is positive development in health services, for which space is being sought to an increasing extent.
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