Tug-of-war between landlords and traders

Retail is expected to enter a period of major restructuring in the coming months, as the coronavirus crisis that came hot on the heels of the financial crisis of the 2010s is bringing commercial store owners and shopkeepers into conflict.

The representatives of owners and traders may do their best to show a picture of consent when they speak publicly, calling on their members for cooperation to avert as many shutdowns as possible, but the market reality is quite different.

The property market is dominated by landlords who appear inflexible despite the drop in private consumption, by commercial chains that use their size to put pressure on property owners, and by eviction orders when no solution can be found for generous rental cuts.

Each case is different, of course, as the landlord of a store on Ermou Street in Athens or in the center of Fira on Santorini has different bargaining power than the owner of a commercial property in the center of Maroussi, or Nea Smyrni, or any less popular district.

Property consultancy officials have noted in recent days that after the holiday season is over, or after the winter sales at the latest, some significant shifts should be expected in the market, as some chains will depart from the spaces they are currently leasing and be replaced by others that in the last couple of years have been looking to set up shop in the most popular spots of the Greek capital.

However, that scenario only concerns hotspots such as Ermou, Kolonaki, Glyfada and Kifissia, where property availability is limited anyway.

In the other areas, the picture is starkly different, and unless landlords become more open to concessions in the ongoing discussions, they risk many months of waiting until they find new tenants for their assets, and maybe at a quite lower rental level.

For their part, the large chains are forcing landlords to change their leasing terms, either toward reducing the rent for a specific period of time – six months or more in many cases – toward waiving the minimum rental level required, replaced by a share in turnover.

Property experts say landlords will have a very hard time finding new tenants in most cases.