Atterbury Europe’s Serbian operations has had its own unique challenges during the Covid-19 pandemic, but thanks to its partners at Confluence Property Management, business unusual was the order of the day. Confluence’s Head of Business Planning, Milan Smigic, shares his experiences keeping malls operational despite often challenging regulations.

What were the priorities on your plate at the start of the global lockdown, and what was your strategy going into this unusual situation?
Our main task at that time was to calm down our retail tenants and support them in their operations and expansion.

What did you see as your biggest challenge, and how was that handled?
In general, unpredictability is definitely the biggest challenge we faced last year. We had a full lockdown for one and a half months, thereafter we opened our shopping malls but then faced the second peak of Covid-19 in July which had a significant impact on trading. Thus, we were forced to switch to a performance-based rent roll.

More specifically, we were about to finish a shopping mall development and due to COVID-19 lockdown we were forced to postpone its opening for one and a half months. This was really challenging as we missed the spring window and we invested huge efforts to persuade tenants to open their stores in the middle of the crisis. Knowing that 96% occupancy was reached at the opening was a great success.

What is the status in your territory as of now in terms of restrictions and how is that impacting currently on trading? How are you managing that?
All mandatory restrictions imposed by the government were widely respected, resulting in a significant situation improvement during August and September and, at the moment, Serbia is the best performing jurisdiction in terms of the COVID-19 crisis in the region. Measures like face coverings, physical distancing, no mass gatherings, frequent disinfection, and so on has led to better COVID-19 control and visitors’ trust in their health safety in our centres . All our assets are operational, and foot traffic and turnovers in retail are recovering. Cinemas have recently opened after six months of lockdown. In the office segment, we are seeing more and more tenants calling people back to work from offices.

What does “business as unusual” look like right now where you are?
In terms of retail it means that our foot traffic is at 80% of normal while our tenants are trading at levels 10-15% lower compared to before the pandemic. In offices, we are seeing an overall drop in take-up followed by a slow increase in vacancies. On the other hand, roughly 30% of employees are back at work from their offices.

What is the one key learning that you and your team have taken away from this unusual year? If you could step back to the beginning of 2020, knowing what you know now, would you have done anything differently over the last 10 months?
Every crisis definitely also brings positive aspects. It’s pushing weak players out of the game, but it is also enabling well-structured and performing market participants to better position themselves. The major lesson we learnt this year is that you need to be flexible and react fast to external shocks. Although decisions were made in a short period of time in a turbulent and unpredictable environment, we find that our supporting measures for tenants were righteous and appropriate.