The introduction of quarantine measures to combat the spread of COVID-19 dealt a significant blow to the retail real estate market in Kyiv, as in the first month of quarantine it suffered significant financial and reputation losses, loss of human capital and competitive advantages. “The Kyiv retail real estate market in the first month of quarantine suffered losses of about $50 million,” NAI Ukraine consulting company told the Interfax-Ukraine agency.
The head of the Cushman & Wakefield Ukraine retail property department, Yekateryna Vesna, noted several categories of losses for owners of shopping centers: monetary, reputational, human capital and competitive advantages.
The financial ones include loss of rental income from stores that cannot work, income from the commercialization of common areas and sale of advertising space, a decrease in turnover in stores that are allowed to operate, which leads to a decrease or absence of rental payments from sales.
In addition, according to Vesna, costs for protection and disinfection grew.
“Shopping centers now predict an increase in vacancy. The less popular the facility is, the higher the share of free space will be at the end of quarantine,” the expert predicts.
The owners of the trade malls also suffer loss of human capital, as they had to cut employees or send them on vacation at their own expense. Not all workers will be able to return after trade centers resume their work.
