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REITS including Choice Properties and Crombie have already offered rent deferrals to troubled tenants. RioCan, one of the country’s largest retail landlords, agreed to about $15 million (US$10.1 million) of deferrals for April, or about 17 per cent of total gross rents.

REITs Slide

RioCan received two-thirds of its gross rents for April, while First Capital REIT and SmartCentres REIT each collected about 70 per cent and H&R REIT got 56 per cent of its rents from retail tenants, according to company disclosures.

The cloudy outlook has contributed to a 26 per cent plunge in the S&P/TSX Capped REIT Index this year, lagging the 15 per cent decline of Canada’s benchmark S&P/TSX Composite Index.

Big mall landlords, like pension funds and REITs, are better able to weather the downturn with rent deferrals and can woo shoppers back with retail experiences that can’t be found online, according to van Dijk. Smaller property owners may not even have tenants to reopen storefronts when this ends, he said.

That’s a view echoed by RioCan CEO Ed Sonshine.

“To be very blunt, some of these smaller tenants will probably not survive — I would guess that some of the ones that won’t survive maybe weren’t in such good shape when this started,” he said in an April 21 interview. “Where we think the tenant should be able to survive, we’re certainly open to discussing further help.”

Still he’s optimistic the vast majority of the retail industry will be fine.

“Once people feel safe and comfortable — and that may be a full year before we’re 100 per cent back to normal, maybe longer — I think people will go back to their basic habits,” Sonshine said. “They want to be with other people, they want to be at concerts, they want to eat in restaurants, they want to see movies in the theatre, they want to go to the gym — all of which nobody can do right now.”

Bloomberg.com