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Yurdaer Kahraman, CEO and Board Member of Fiba Commercial Properties in Istanbul and Member of the ACROSS Advisory Board. Credit: Fiba

Regarding the need for compromise

“We do expect the same developments like in China by late spring or beginning of summer at our malls in Central Eastern Europe and in Turkey.”

By Yurdaer Kahraman

Crisis don’t last forever. This corona crisis though can be seen as a challenge without precedence in the history after the Second World War, as most aspects of society such as health, economy, education, and social life are affected. Therefore, all parties in our industry are more than ever asked to act calmly and farsightedly. All actors in our industry will need each other and should try to overcome this challenge as a team not as opponents as there is a possibility for reinforced growth after the crisis. 

Our common main aim between lessors and lessees should be to open our facilities as soon as possible and with as many shops as possible. Doing this we should strictly follow all regulations given by the authorities to help handling the health issues by providing masks and gloves, hand sanitizers etc. and maybe also a controlled limitation of visitors during the duration of the pandemic. 

Our mall in Shenyang in China has reopened with 85% of the stores just three weeks ago after the end of quarantine. We could see a slow rise of visitor frequencies up to 50% of our previous numbers by now. We suppose this trend will continue and expect to reach 90% to 100% of our previous numbers by the end of this year if no further outbreak will occur. Even in these difficult times we were able to sign letters of intent or prolonged lease contracts with either the existing or new tenants with a higher value. This shows that people trust in future growth and the economy never stood completely still, even during peak times of the outbreak. That is above all a success of our team in China that has always been in very close contact with our existing tenants as well as new retailers.

We could see that people needed to cover their needs and also wanted to consume. This supports also the assumption that there could be an over-consumption after such a crisis in different branches. We do expect the same developments like in China by late spring or beginning of summer at our malls in Central Eastern Europe and in Turkey. This differs strongly from country to country and depends very much on how strong the government is able to support the economy and also how capable the government is in handling the crisis. One positive outcome from this crisis is that we could see a decrease of populism as these parties don’t seem to be able to contribute any constructive input to facing this challenge.

It is crucial that all real state and retail parties work together closely and try to reach the same aim, which is managing the restart successfully. Therefore, it might be necessary to compromise and not try to achieve your own maximum goals. Every participant is responsible to ensure that any support given by governments, business cooperation partners or industries is used to maintain as much employment as possible and to create a sufficient cashflow. The experiences we gained in the last months will surely lead to new business models and to a more sustainable and responsible economy. 

For example, strengthening the local economy, moreover delivery in time models will be very much in demand. As we can see a shortage of needed goods it might be necessary in the future to build up and maintain sufficient stocks of essential products which was not existing in many European countries anymore. It seems very unlikely that only our current logistics models with shipping goods all around the world will continue to exist as these models are very vulnerable to any kind of global crisis. 

Surely digitalization will become even more important in modern work life, be it bureaucratically, economically, or educationally. It is very likely that our now known e-commerce will find new ways to collaborate with stationery trade e.g. more show rooms, more pick up points, more local/regional set-ups and collaboration. Our industry, as a part of the economy, has now the responsibility to maintain the economic system by opening our malls and thus enable existing as well as new industries to sell their products and services.