COVID-19 FAQ – Skyline Retail REIT
Q: Is it still safe to be invested in the retail sector at this time?
A: The Retail REIT’s management team believes that now is still an advantageous time to be invested in retail real estate. The majority of the Retail REIT’s income is derived from national grocery and pharmacy-anchored tenants who have remained open and fully operational during this time. It is important to remember that the Retail REIT is focused on nationally backed anchor tenants in industries that, in addition to grocery and pharmacy, include banks, medical suites, the Beer Store, LCBO, pet supply stores, and automotive services, all of which are seeing high demand at this time.
Q: Will retailers be required to pay rent during their shutdown?
A: Yes. With few exceptions, rent obligations of retailers and services located within Skyline Retail REIT’s portfolio continue during any unprecedented closures. However, Skyline Retail REIT understands the significance of the closures and the serious impact to retailers, especially smaller independent restauranteurs and service businesses. The REIT will be participating in the Canadian Emergency Commercial Rent Assistance (CECRA) program for tenants that have the greatest need and meet the qualifications. The management team is also working on a case-by-case basis with tenants that still need assistance, but do not qualify for CECRA. The goal is to ensure the long-term viability of our tenants while protecting the Retail REIT’s investment in these shopping centres.
Q: Will imposed store closures affect the distribution or Unit value?
A: Unlike the stock market, the Retail REIT’s Unit price is directly correlated to the value of the real estate assets. The impact of store closures may have an impact on some smaller retailers’ ability to pay rent. However, the majority of Skyline Retail REIT’s income is derived from large national food, pharmacy and everyday essential retailers who have, for the most part, remained operational, and are expected to continue to do so.
The full impact of the closures on smaller retailers will likely be mitigated by the Government’s assistance plan for small businesses and any other aid programs that continue to be unveiled.
Q: Will lower interest rates affect the Retail REIT?
A: Yes. The reduction of borrowing costs will have a positive benefit to the Retail REIT as its management continues to review accretive opportunities to refinance, ladder the mortgage maturity dates, and extend the average weighted mortgage term of the Retail REIT.
Q: What is Skyline Retail REIT doing to assist smaller independent retailers through this difficult time?
A: Skyline Retail REIT is working directly with its tenants and retailers to ensure that they will be able to reopen any store closures and continue operations as soon as possible, as per public health and Government guidance. Where possible, Skyline Retail REIT is directing these tenants to seek out available government assistance. As the timeline for reopening becomes clear, Retail REIT Management will work with these retailers to ensure that they are able to successfully rebegin operations.
Properties continue to be fully maintained, and the Retail REIT’s property management staff are in regular communication with tenants about the latest news available affecting their locations.
Q: Is there Provincial or Federal government assistance available for retailers?
A: Yes. The Provincial and Federal governments have both announced unprecedented government programs to assist business owners with payroll costs and tax deferrals, in addition to many other programs aimed toward individual workers to ensure that they remain able to maintain their financial position during periods of unemployment due to store and business closures. Skyline Retail REIT continues to work alongside its tenants to ensure that they understand the government assistance available to them, and to ensure that they avail themselves of the options available.
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