Landsec, the retail property group, expects shopping centre rents to fall because of the impact of the Covid pandemic and an “ongoing structural shift to a lower rent model”.
Landsec, whose portfolio includes outlet centres and regional shopping malls, reported in its interim results that estimated rental values (ERVs) “across our estate will need to fall 35% to 40% from their 2017/18 peaks in order to reach a sustainable level with retailer total occupancy costs in the low teens. This would imply a further decline of around 15% from September ERVs.”
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