Mall owners collect only 15% rent in April;
rents might fall further
As retail business came to a standstill in the months of
March and April while some even continue into May, national
retail chains in Europe and US are crumbling.
With most of them negotiating rent agreements with landlords
or not being able to pay rents altogether, mall operators’
rent collections have hit rock bottom, casting doubt over
the ability to sustain business.
April saw only 15 per cent rent collection for mall
operators in US and the trend is forecast to fall further
As many retailers like Macy’s and Tapestry struggle to reach
common consensus with mall owners, the inability to meet the
rent agreements has led to store closures all over the
Retailers are of the view that rents have been riding too
high in the recent past and in order to keep more stores
from either leaving premises or closing down, mall owners
will have to rethink their rent strategies.
Retail rents have risen by 2.6 per cent over the last 3
years in US; however, real estate analytics firm CoStar
Group estimates that rents are likely to fall 8-13 per cent
post the coronavirus crisis.