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Shopping Centre Landlords Brace For More Pain

Credit rating agency S&P warns the listed property sector could feel the pain of COVID19 for a few years, as shopping centre owners continue to grapple with the threat of decreased discretionary spending.

Shopping centre landlords are expected to be the most hit among rated ANZ REITS, as renters query deferrals, waivers or more.

Early this month, S&P gave a negative rating on several retail REITS including Westfield owner Scentre, Vicinity and others.

Analysts warn many commercial landlords could feel economic pain far beyond the local lockdown period.

Continued negative rating pressure could also accumulate later in the year after leniency on tenant evictions eases.

Conversely, industrial warehouse landlords are forecast to potentially fare a lift in demand, with retailers experiencing a jump in e-commerce requirements from COVID19.

Wesfarmers has temporally converted three Kmart stores into online fulfilment centres. The retail conglomerate is also focused on building its digital capabilities following the purchase of e-commerce group Catch.

Commentators question the impact on online delivery volumes following COVID19, as more consumer become familiar with the service amid lockdown conditions.

Market watchers claim demand for some commercial offices (or sizes) may also decrease post-lockdown, as organisations find a rhythm in work-from-home conditions amid coronavirus.

As previously reported, a vast majority of tech professionals reportedly expect some level of work-from-home policies to stay post-pandemic.

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