Covid-19 could lead to new data-based leasing models
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Report
79 percent of landlords who own more than 120 square feet of retail property in the UK believe that the Covid-19 pandemic will permanently change how retail property is leased and the terms on which it is occupied.
That’s according to a survey commissioned by property consultancy firm Colliers International, which sought to explain how property owners have adapted to lockdown measures and how their strategies have changed in regard to the pandemic’s impact on their tenants.
More than 40 percent of landlords are more likely to consider factors such as footfall, trading turnover and how physical shops generate online sales when deciding rent prices post Covid-19.
Future property leasing will be driven by an advanced use of data, according to the report. But landlords will face challenges in terms of accessing the right datasets and they must be willing to share this information with retailers if both sides “wish to sustain a relationship which is viable for all parties”.
“It’s clear that we’re going to move away from the old model of how shops have been rented out. In an environment that can integrate masses of relevant datasets, more precision can be brought to the pricing process and this will benefit both landlords and retailers,” said Matthew Thompson, head of retail strategy at Colliers International, in a statement.
Though this new leasing model has piqued the interest of landlords, the survey shows that many are not yet able to apply data to create a new leasing methodology. Of those surveyed, around two thirds do not have access to the data which would help measure who is visiting their properties, where they are coming from or their reason for visiting shopping environments. Additionally, even if the data has been obtained, 40 percent of owners said that they would not be willing to share these insights with occupiers in return for sales data.
“This unwillingness to share data between stakeholders needs to be resolved if a new model for retail property leasing is to emerge from the devastation of the pandemic,” Thompson added.