Fast food restaurants are expected to recover faster from the coronavirus pandemic, according to Knight Frank Africa Market Pulse Survey.
Tilda Mwai, Researcher – Africa at Knight Frank says in their latest findings, 64 percent of the restaurants are expected to recover first in the retail sector followed by healthcare-related retail tenants at 14 percent.
The survey looks at ‘Responses and Strategies for the COVID-19 Pandemic’ further found out that 31 percent of retail tenants reported to have requested for rent holidays were requested while 31 percent reported that a renegotiation of lease terms was requested.
In addition to the increasing disruption in supply chains as a result of lockdown measures imposed and border closures, 61 percent of the respondents indicated that it significantly impacted their ability to fulfill the demand for products leading to additional financial stress.
In April, the Kenyan Government eased some of its coronavirus measures, including the reopening of restaurants.
“With the retail sector expected to be under pressure for the short to medium term, it is expected that more flexible lease terms and potential revenue-sharing arrangements may be requested by retail tenants in the future as they seek to hedge themselves in the event of similar crises,” part of the report reads.
The report found out that most respondents see a change in the retail mix with increasing biases towards essential goods provision.
“As Omnichannel platforms continue to be dominant, 51 percent of the respondents indicated that they had an online platform with 80 percent of the businesses without an online presence are already looking to adopt a platform.”
In addition to Covid-19, respondents indicated that additional factors continue to exacerbate the stress on the sector in different countries such as currency devaluations impacting the ability to pay rent.