According to a survey carried out by the CPME, almost 50% of VSE/SME managers feel that the future of their business is "at least potentially threatened". Most are considering downsizing, and some are thinking of selling their premises, relocating or renegotiating rents.
Real estate: SMEs struggle to pay rent
Retailers aren't the only players weakened by the crisis. A survey carried out by the CPME among 1,950 VSE/SME managers between September 9 and 21, 2020 reveals that the restrictions put in place to limit the spread of the virus have led to a slowdown in business this summer. Indeed, in July and August, 53% of business leaders observed a drop in sales compared to 2019. This was mainly reflected in the non-renewal of expiring contracts and the postponement of investments.
Despite the support measures offered by the State (deferral of tax and social security charges, PGE), 28% of beneficiaries feel they will not be able to repay these charges, and 54% the State-guaranteed loan. Companies also have to cope with their property expenses. During the crisis, almost 40% of managers did not pay their rent. Most of them will have to settle this debt soon, despite their weakened finances.
Real estate expenses prompt managers to rethink their strategy
In June, according to the CPME, 40% of companies had paid their real estate charges, and over 20% had obtained a rent deferral. In response, many executives are rethinking their real estate strategy.
Several solutions exist, starting with the "credit tenant lease", which consists in the company setting up an internal lease and receiving from a lender the future value of the rents over a defined period, while retaining ownership of the property. Another possibility is to reduce the surface area of the premises. The pandemic has encouraged telecommuting, a practice that should lead to a different reallocation of space or a reduction in square meters.
Employees, on the other hand, want hypercollaboration, i.e. a totally modular work environment. The Covid-19 crisis has amplified the trend to reduce individual spaces in favor of collaborative work. However, these arrangements do not meet all needs. Professionals report receiving more requests for individual offices and outdoor spaces. So, faced with these divergences, designers will have to adapt by creating ever more flexible offices.
As a result, Covid-19 and the measures introduced to curb the spread of the virus are prompting more and more managers to rethink their real estate strategy, and even to part with their premises.