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How shopping centres survive during the pandemic

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Irina Toropova, Director of SC Riga Plaza managed by Colliers

 

With the onset of the Covid-19 pandemic, the routine of shopping centres has become even more dynamic than before, as the total workload directly correlates with the imposed restrictions. During the first wave of the pandemic there was a huge panic; when the Emergency Situation was announced, almost all tenants tried to contact the shopping centre administration simultaneously. Now, during the second and third waves, both tenants and visitors perceive the situation more calmly. Currently, both shopping centre owners and their tenants feel much more ready to accept and implement the new rules, and are able to react to them very quickly.

Daily life of shopping centres

During the pandemic, the shopping centre administration teams closely follow the changes in the latest regulations to reduce the pandemic, and the new rules are implemented very quickly. There have been a number of cases when in late Friday afternoon or evening (even at night) the government has adopted changes to retail restrictions that take effect as early as next Monday. Accordingly, in a very short time, it is necessary to adapt the operation of the shopping centre to the latest regulation - to inform the tenants, to instruct the staff and re-plan the work, etc. It must be said, however, that as the pandemic lasts, it becomes easier to adapt to changes, because we have already gone through all of this before. With the current restrictions in place, the hardest part might be answering questions of numerous tenants, because we don't always have the answer right away. Sometimes the law does not clearly state how one or another process should be carried out, leaving space for interpretation. In such cases, the shopping centre management team tries to understand the idea stated in the law as soon as possible or, in the case of uncertainty, to contact the relevant state authorities to clarify specific issues. Our priority is our tenants and visitors, and although there are not always answers to all questions, we gradually try to solve the unknown and look for the best solutions.

Visit less often, buy more

An important trend over the last year and a half is the change in visitors’ habits. Clearly, as the number of patients infected with Covid increases, people are more likely to choose to stay at home or to visit places where they are less likely to meet other people. Accordingly, it has been noticed that shoppers visit the shopping centre less often, but make several purchases during one visit and use several services in order to solve the maximum possible tasks in one visit. Undoubtedly, the development of e-commerce should not be neglected; it has only benefitted and grown during the pandemic. Currently (while in lockdown) people are forced to shop online because it is the only way to buy what they need. However, there are things that are difficult to buy in an online store and that are more convenient to buy in-store – trying on or seeing the real look of the product.

The requirements for applying for state support are difficult to meet

Within the framework of the state support programme, shopping centres were able to apply for compensation because of the decrease in SC rental income, as they could not operate during a long-term lockdown. However, it was not easy to meet all the requirements and become eligible to receive state support; besides, this opportunity was only offered 18 months after the pandemic began. During the first wave, all stores were allowed to operate, but there were practically no customers - the stores were empty and waiting for visitors, because Covid-19 was something new and unknown, causing great fear of getting infected, and people tried not to visit public places. In turn, this year people have already got used to Covid and following the restrictions, but even now most shopping malls are closed due to the Emergency.

Despite the fact that there is currently a kind of quiet period in the shopping centres, the management teams of the centres continue to work actively on new projects. It’s great that despite the current situation, tenants (existing and new) still see an opportunity for their business in shopping centres in the future, and want to cooperate and use this pandemic time to prepare for opening the door to visitors next spring.

 

* SC Riga Plaza is managed and operated by the international real estate services company Colliers

 

 


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