How Co-Operation Between Landlords and Tenants Can Support Sustainability in A Post-Covid World

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  • For pan-African property companies, identifying risks and opportunities will increasingly become a collaborative effort between tenant and landlord
  • Mitigating tenancy risk remains a key pillar to sustainability, but doing business in Africa requires implementation of a much wider spectrum of risk mitigants
  • Open and candid dialogue between landlord and tenant remains imperative to accurately identify and analyse risk and opportunities


The economic impact of Covid-19 will likely last much longer than dealing with the virus itself. It is therefore increasingly important for both landlords and tenants to jointly identify and mitigate risk without impacting the financial viability of either party in the process. 

As Africa’s largest diversified landlord, LSE-listed Grit Real Estate Income Group is ideally placed to offer perspectives on how collaboration could result in adaptability and more sustainable businesses in emerging markets.

For most landlords, identifying risk and opportunities is a long-term focus that starts with keeping in close contact with major tenants – enabling regular, ongoing, and open dialogue which is not only reserved for tough times. C-suite landlord executives should regularly engage with their counterpart tenant executives to share perspectives on business performance and how this overlay with what is happening in the broader economy.

Industries and sectors differ tremendously and in many of these challenges lie opportunities, provided that both landlord and tenant are openminded enough to explore them.  

Beyond purely Green initiatives, Covid-19 induced changes to the medium-term outlook for commercial offices are creating opportunities for landlords to deliver co-mingled solutions. For many operations across the African continent, work-from-home is simply not a workable solution, given the high cost of data, sporadic connectivity, and security concerns.

This invariably means a knock-on effect on the space requirements of office tenants, especially for those with open plan offices who now have to reconfigure desk space in compliance with social distancing regulations. A mutually beneficial solution could see landlords filling vacancies by temporarily leasing out space to these tenants at preferential rates but including greener “fit-outs” and incentives for more sustainable office practices.

Many large corporates also prefer to host their transient staff in bespoke corporate accommodation facilities where social distancing and sanitisation protocols are better controlled.  This has led to some entrepreneurial business opportunities for both landlord and tenants, such as on-site catering through a more optimal use of on-site facilities and reduced wastage.

Retail on the continent provides a particular set of challenges. Food retailers and financial services providers continued trading throughout the various lockdown restrictions and in these instances, it was the landlord’s obligation to ensure that the shopping centre remained open for trade. Measures included increased cleaning of high-frequency areas with hospital grade sanitisers, limiting access through only a small number of entrances in order to implement temperature checks and the supply of face masks, and even different shopping hours for the vulnerable and infirm members of the community. In some countries, a mobile app has been developed for shoppers to book a time slot to do their purchases, smoothing foot traffic and allowing for greater social distancing.

High-end fashion retail, on the other hand provides a very different set of challenges. Where food and perishable goods are prioritised to move through customs and border control quickly, fashion retailers often end up with having stock delays at the border, missing parts of the season as a result.

Lockdowns have forced online purchasing onto many African countries and has grown exponentially. Considering the challenges around logistics and last mile deliveries, shopping centre landlords and tenants could leverage online purchases to their own benefit. Research points to ongoing growth in “click-and-collect” options, where shoppers collect their online purchases in-store at the shopping centre, alongside other innovations such as “safe shopper.”

Despite social distancing concerns, shopping centres remain a major attraction for socialising. Landlords who can enable this in a safe environment will do well in supporting their tenants’ survival. The extension of outdoor catering areas where patrons are spread out can often be done at little cost to the landlord, but with significant implications for tenant sustainability.

Although mitigating tenancy risk remains a key pillar, doing business in Africa requires implementation of a much wider spectrum of risk mitigants to ensure sustainability. These include in-depth analysis of currency risk, repatriation risk, country risk, operational risk, concentration risk and of course, political risk to name a few.

Open and candid dialogue between landlord and tenant remains imperative to accurately identify and analyse risk and opportunities. Through collaboration, the sector will grow stronger, provided that all parties work together, are not focused on short-lived wins for only their own business, but rather focus on the long-term goals.

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