Supermarkets and stallholders are pushing for rent waivers and deferments to help them brave through the economic fallout of the Coronavirus pandemic.

The move comes in the wake of the retail sector  grounding to a halt as the escalating Covid-19 spread  keeps people from stores, schools, restaurants, movie theatres and workplaces.

On Monday, President Uhuru Kenyatta announced new measures, including travel restrictions, that are expected to further shrink the national retail space.

It is on that premise that Retail Trade Association of Kenya (Retrak) chief executive Wambui Mbarire asked landlords and malls to waive rent or offer concessions to help tenants.

“We have been witnessing a constant decline in purchases of non-essential items. People have hardly made any sales since March. Therefore, landlords cannot expect 100 per cent rent,” she said.

“We are encouraging landlords to have dialogue with their tenants to find a way forward. Whether rent can be reduced, then post-coronavirus every wins,” she said. 

According to Mbarire, the worst affected segment of the retail sector is the non-essential goods sub-sector including clothes, electronics and non-food based products.

She warns pushing retailers out of malls and stalls was counter-productive since landlords will not find replacements in the era where there are gluts in the industry.

In most malls, big retailers like supermarkets are often anchor-tenants that have traditionally been used to attract customer traction.

Business activities

But there are fears that cessation of business activities will temporary force the closure of malls if a drop in sales means they cannot pay their bills.

Some retailers have already sent letters to their landlords requesting a deferral of rent for the coming months as they register razor-thin profit margins.

But even as pressure mounts on malls to waive rent, compassionate rent relief is not necessarily simple.

In addition to loss of income, most landlords rely on rent payments to pay for the mortgage on their properties.

Without rent payments, landlords could default on their loans and lenders have not yet issued guidance on mortgage flexibility.