By James Gunn
It is too early to comment on short-term revenue decline as we are anticipating an economic bounceback in the mid-term and the impact of Covid-19 must be viewed in the long-term. What I can confirm is that retail parks adapted to the situation very quickly and both landlords and tenants have shown a great deal of flexibility to overcome this difficult and unprecedented period.
When compared with shopping malls, our retail parks and stand-alone food stores have weathered the storm better and we see key advantages. First and most important is the layout of retail parks that allows customers to enter a shop directly from the parking lot with no contact with other stores. This has supported the social distancing measures put in place by our tenants with very few enclosed common areas in which cross-contamination of coronavirus can take place.
Management and maintenance costs are significantly lower in a retail park than in shopping centers. These expenses could not be cancelled during the crisis. In fact, demand for additional facilities management and cleaning services increased, resulting in additional investment in this segment. In certain instances, stores brought forward plans to refit certain premises.
No tenants left our schemes and we have received no notices of any intention to leave. In fact, all tenants remain supportive and service charges continue to be paid. Support from banks in terms of moratoriums came on time and were crucial in weathering the crisis. With the suspension of the lockdown, footfall is recovering quickly to previous levels, and we expect turnover to do the same. Overall, we feel that this will definitely not have a detrimental impact on the future of retail parks in SE Europe.
We are ready to respond should a second wave of Covic-19 return or local lockdowns come into effect through the summer and autumn. The experience of the past three months means that we are in a stronger position to cope, such as supporting the deployment of delivery services, the promotion of special offers during off peak hours to even out footfall, and deploying the learnings taken from retail park operators internationally to provide a better and safer shopping experience.
Poseidon Group is continuing its Capitol Park expansion plans through the autumn. For example, we have just announced that Capitol Park Ivanić Grad will open in October 2020. It will see the reconstruction of a previous Konzum building to become a new city center shopping destination for more than 9,000 residents, providing more than 50 jobs for the local community. The 5,000 sq m location will introduce three international brands, opening their stores for the very first time in the city–namely Pepco, TEDi and Kik Textilien. Konzum and Caffe Bar will remain as important tenants in the building.