While other states in the country appear to be flattening the curve and heading back to normal, Victoria has unfortunately regressed forcing Premier Daniel Andrews to reinstate stage 3 ‘Stay at Home’ measures. The restrictions took effect in 31 metropolitan Melbourne local government areas and the Mitchell Shire local government area, from 11:59pm on Wednesday the 8th of July. The restrictions are in force for 6 weeks until 11:59pm on Wednesday the 19th of August.
So how this will affect commercial properties and tenancies?
As the implemented measures only allow people to leave their homes for the original four reasons: shopping for necessary supplies, compassionate care, exercise and work or study, typical retail tenants (Gift Shops, Florists, etc.) will be grossly impacted by the massive reduction of walk in traffic over the 6-week lockdown period.
Cafes, Bars & Restaurants, will be forced to revert to take-away meals only and in some cases, full closure will be inevitable. Gyms and associated businesses such as yoga and karate studios will be shut down throughout this period. Whilst some can and will operate online classes, in most cases, this will not subsidize even a portion of their business. Beauty related Businesses, that offer services such as waxing, laser hair removal, massage etc. will be forced to shut under government advice. Lastly, tattooists will again be shut for the period due to the close contact that is required for their services to be performed.
As the COVID-19 commercial leasing principles remain in place and coupled with their own financial struggles, tenants will undoubtedly start to seek rental assistance through their landlords. In these instances, we will be in contact to discuss details on a case-by-case basis.
Whilst we hoped this was a road that we would not have to travel again, we find ourselves with little option but to help each other ride the Covid19 wave, until things inevitably start to settle. This too shall pass.
Should you wish to discuss this further, please do not hesitate to contact the property management team.
