Similarly, shopping centers are expected to suffer from a significant fall in revenues. The Fashion, Food & Beverage, and Entertainment categories, holding 45% of total leased space, will most likely experience a significant negative impact in the short term. Due to reduced demand, hyper/supermarkets within shopping malls will face a partial risk. Presumably, people will prefer small-sized local markets and grocery stores located near their residences.
Nevertheless, landlords/leasers should efficiently work to maintain occupancy. To prevent a growth in vacant spaces, they should reduce the rental rates and apply flexible payment conditions (in case of fixed rental). In the short term, tenants will avoid leaving leased areas or relocating to new spaces as these actions relate to additional capital costs.
In the mid-term, demand may rise for large-sized shopping areas and retail parks (including so-called outlet villages), which will be comprised of isolated commercial units. Also, discussion will open on the relocation of children’s entertainment centers to open spaces.
In the short term, street retail is forecast to experience a significant loss of turnover. The leading categories in the Tbilisi high street tenant mix are service, cafés-restaurants, fashion, and health & beauty. Most likely, the isolation period will negatively impact these categories, of which the most exposed tenants are café-restaurants and fashion retailers, holding 33% of the total mix.