Some 30% of stores may fail to open in Ukraine after COVID-19 quarantine is over – experts

Colliers International (Ukraine), a company providing services in commercial real estate, says a number of large retail operators admit that up to 30% of shops may fail to reopen in Ukraine after the COVID-19 quarantine is over if some lessors remain unwilling to substantially review rental terms.

"A significant reduction in rental rates for at least six months is expected after quarantine is lifted to preserve lessees' businesses. A number of major retail operators assume that under the worst-case scenario and given unwillingness of some lessors to review rental conditions in favor of lessees, up to 30% of stores may fail to open after the quarantine," the company's press service said in a statement on April 16.

Many retailers stick to a watch and see position.

"Construction is ongoing under certain projects. Dates of opening [of sales outlets] will certainly be adjusted for general restrictive measures. Retailers are focused on negotiating with lessors on lease terms pending the quarantine period and making payments only based on reduced ОРЕХ [operating expenses] and utility bills," the report said.

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As UNIAN reported earlier, the Kyiv-based Ocean Plaza shopping mall had suspended rent, operating expenses and marketing payments for the period from March 17 to March 31 for lessees who shut down their shops amid quarantine.

According to a March snap poll by the European Business Association (EBA) among representatives of small- and micro-sized businesses, participants in the Unlimit Ukraine project, every fifth representative of small-sized businesses in Ukraine says they may cease operations because of the quarantine set by the authorities as part of measures to counter the coronavirus spread.

The Cabinet of Ministers on March 11 decided to introduce quarantine in Ukraine from March 12 until April 3 over the spread of the novel COVID-19 coronavirus. On March 25, the national quarantine was extended, while the national emergency situation was introduced throughout the country until April 24.

UNIAN memo. Colliers International is an international consulting company providing services in the field of commercial real estate. Colliers International has over 17,000 employees working in 68 countries, including in the CIS and the Baltic States.

The representative office in Ukraine has been operating in Kyiv since 1997.