Close this search box.
Dietmar Reindl, COO of Immofinanz and Member of the ACROSS Advisory Board. Credit: IMMOFINANZ

“Collaboration between lessors and lessees is essential”

As an emergency measure, Immofinanz has deferred lease payments for April of retailers affected by the shutdown and postponed them until September, according to COO Dietmar Reindl.

ACROSS: The negative impacts of the corona pandemic will have long-term effects for the European retail and placemaking industry, even after the store reopen. Many people say that closer collaboration between lessors and lessees is essential, especially in times of crisis. Do you share this view?

DIETMAR REINDL: Collaboration is absolutely essential. Close collaboration and joint solutions are the only way. We as lessors and our lessees are in the same boat. It is not always easy to achieve consensus, of course. Vastly different and complex legislations in every single country do not make it any easier.

We understand the lessees‘ argument when they say that they parked their money in goods and logistics, that they have to pay their employees and, at the same time, cannot generate any revenue due to statutory restrictions. However, it is also unacceptable that lessors have to bear all the costs. That would be incorrect and impossible for lessors.

Therefore, collaboration between lessors and lessees is essential. I assume that this collaboration will become even more intense due to the corona crisis. It would be great if the end result could be an open dialogue, also about figures and KPIs, that would enable us to talk about revenue and goods-related issues even more openly.

ACROSS: What are the immediate and concrete measures that Immofinanz AG has taken to overcome this crisis? Were you even prepared for a situation like this? 

REINDL: We have, indeed, far more experience with handling this kind of crises than many other companies, for example from handling the financial crisis and the Russia crisis. Due to our experienced and well-coordinated team, we are in a very good position and can act quickly, for example with standardized procedures to defer lease payments and system-supporting processes.

Our first emergency measure was to defer lease payments for April of affected retailers and postpone them until September. Therefore, we have enough time to talk with everybody about the details and ease the pressure at the same time. And we immediately initiated cost-reduction measures, including the postponement of non-time-sensitive investments as well as the reduction of general expenses.

ACROSS: How did your lessees react to your measures over the past weeks?

REINDL: We are in close contact with our lessees and understand their situation. However, our relationship is determined by mutual contractual obligations that both sides have to fulfil. We also have to pay our employees and make interest payments for loans. Therefore, we can only do this together.

ACROSS: Are there regional/country-specific differences in regard to the impact of the crisis?

REINDL: Yes, there absolutely are. Overall, we are represented in ten countries with our retail properties and therefore we are also facing respectively different legislations, some of which tend to change very quickly. Therefore, we are looking at a quite big matrix with a myriad of variables.

The only thing that remains the same in all countries is that stores with basic supplies are allowed to remain open. This means that approximately one third or our leasable retail areas are open by mid-April. In all other respects, the countries’ approaches are very different, including who is actually affected, who gets what kind of support, etc. On the other hand, our lessees adhere to their respective county’s legislature, as well as different terms for restrictions and contracts.

I do understand that the respective states want to and had to act quickly. However, we would like to see more support from the EU in terms of a more unified approach.

ACROSS: From what you experienced over the last weeks, how crisis-proof are retail parks in your opinion; in comparison to, for example, shopping centers or inner-city locations?

REINDL: Retail parks definitely have their USP. Their kind of one-stop-shopping with direct access to the stores from the parking lot and lesser points of contacts with other people will surely play a more important role for many people during the post-corona phase. You step into the store directly from the privacy of your car. Another important point are the low lease and utility costs for retailers. Overall, I expect that visitor frequency and revenues will increase faster at retail parks after the crisis.

Shopping centers can be considered as meeting places. This is where people will primarily go to shop and be a little more careful with entertainment activities where a lot of people come together. But it also helps in these cases to focus on affordable goods that are always in demand in difficult times.

ACROSS: When it comes to joint crisis management, who, in your opinion, should be included into these partner models and why?  

REINDL: Advocacy groups and associations, like shopping centers and trade associations or organized real estate developers. In Slovakia, we launched an initiative in collaboration with CBRE; in Poland, we joined forces with other landlords to crack down on the government’s one-sided legislative plan. However,  I have to be a little self-critical here and say that the industry has not yet established a strong and, above all, transnational lobby.

ACROSS: Which role can/should states play after the events of the past weeks? Is there a need for more superordinate regulation, like a code of conduct?

REINDL: I already mentioned the vastly different legislatures and handling in individual countries. This is where a unified approach with the support of the EU would certainly help. A code of conduct, initiated by the industry or the states, that serves as a guideline for lessors and lessees, is definitely helpful. For example, when it comes to moratoriums on evictions, or if lessees, who are not substantially affected by the crisis, do not comply with their lease contracts. These codes of conduct could help to implement unified and fair solutions for both parties. However, they cannot enforce a specific kind of behavior.

ACROSS: Does this crisis reinforce the online sector? 

REINDL: Even major retailers say that the online sector is not growing significantly right now. In the current phase of insecurity, people tend to consume less. Will online retail grow stronger after the crisis than originally anticipated? It may come to a further shift in the percent range. But as soon as the virus is somewhat under control, people will want to socialize again, go out together again, and have fun. This applies, above all, to the time when medications and a vaccine against the virus will be available. Keep in mind that online retail will reach its limits quite quickly–not only in terms of transport costs in comparison to production costs, but also in terms of flexible deliveries and quality.

According to Reindl, retail parks like Stop Shop definitely have a USP. One-stop-shopping with direct access to shops from the parking lot and fewer points of contacts with other people will play a more important role many people in the post-corona phase. Credit: Immofinanz. Credit: Immofinanz

ACROSS: Do you expect long-term impacts/changes in terms of consumer behavior? If you do, what are they and why will they occur? Will these changes impact the tenant mix at your retail parks?

REINDL: It will depend on how long this crisis will last. Consumer-oriented products in retail parks and at stores providing basic supplies will always be in demand. Regarding the tenant mix, it is definitely possible that may lose some retailers. However, this situation should change again in a year from now. So far, we only had one insolvency in our portfolio with its more than 2,000 lease contracts, and that one affected only a small area.

ACROSS: What did you personally learn from the past weeks?

REINDL: I am very glad and thankful that our staff in our country offices as well as our headquarters in Vienna has acted in a competent and professional manner in this crisis situation and is fully committed to overcoming this crisis in collaboration with our clients. Furthermore, we have invested in technologies over the past years that will give us a daily overview of our properties’ performance in all ten countries. Therefore, we are able to make well-founded and quick decisions.

It was surprising and frightening to see how fragile our economy has already become after the first one or two weeks of the shutdown. A deeper analysis of this situation may result in a rethinking of goods cycles as well as reinforced regionality in terms of supply.

Digitization will definitely get yet another strong boost and digital solutions will find their way into professional and private life much quicker than before.


Subscribe to ACROSS Magazine

Across print & digital

Enjoy ACROSS – The European Placemaking Magazine on your desktop, tablet, or smartphone.

Latest Print Issue