What about the retail market?

On March 18, the National Security Council announced the mandatory closure of all stores, regardless of their size, with the exception of shops of first necessity such as grocery stores. This decision came as a shock to the retail world and it was necessary to adapt quickly and find short-term solutions.

A whole series of questions arose. How can you pay your expenses without any income? Can one invoke force majeure as a reason for not paying rent? Can one resort to occupational incapacity in order to negotiate with the landlord?

Many questions are left unanswered. Who would have imagined that one day a virus would cause so much damage to the retail sector in such a short period of time and with all the repercussions that we discover day by day?

As announced in the Echo magazine on April 30, an agreement was reached to reopen the stores: "The discussions were complicated, but the players in the distribution sector ( management and labour unions) reached an agreement to reopen all non-essential stores as of May 11. The social interlocutors (labour unions, Comeos and middle-class organisations) signed a joint declaration last Thursday afternoon setting out the conditions for a safe re-opening of non-food stores as of 11 May". This decision raised a lot of new questions.

Yes, the reopening of shops is allowed, but at what price and under which conditions? How can we protect our staff and customers? How can hygiene measures be implemented? A heated debate took place between the different protagonists. Some claim that it was necessary to reopen as soon as possible to avoid further losses to retailers. According to Echo Magazine, "Every day of closure costs the non-food businesses 140 million euros". Others argued that the people’s health and safety had to come first. Clear measures have been taken by the National Safety Council, such as the application of social distancing between two customers, no more than 30 minutes per customer in the store, a maximum of one customer per 10 m². All these measures can be found on the FPS Finance website: https://economie.fgov.be/fr/themes/entreprises/coronavirus/coronavirus-mesures-renforcees.

While many questions remain unanswered, everyone agrees that these new measures and the weeks of closure caused by the Covid 19 will have a major impact on the sales revenue of the coming months and consequently on the rent.

In these uncertain times, it is essential to rethink business development strategies. Why not have your rent appraised, to see if it still corresponds to the rental market value? What are your options to consider in a commercial lease to solve the problem inherent to the Corona crisis? How to find the right compromise with a tenant or landlord? Please know that Structura.biz can help you in repositioning your strategy thanks to our years of experience in the retail sector, our expertise in commercial leases in Belgium and our dynamic and proactive team.

If you have any questions about your real estate portfolio, feel free to contact Structura.Biz at 02/462.32.00 or by e-mail at office@structura.biz.
It will be our pleasure to help you.

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