During the quarter, CBRE observed numerous cases of tenants requesting rent reductions due to fall in sales in main retail areas covered by this report*. The extent and duration of the requested reduction varies by tenant, while the owner's response also varies accordingly. *Ginza, Omotesando/Harajuku, Shinjuku, Shibuya, Shinsaibashi, Umeda, Kyoto, Sakae and Tenjin
Meanwhile, although the spread of COVID-19 has prompted some tenants to vacate their stores, such cases have been limited to a few retailers that had already been performing poorly for some time.
Many of the retailers that have cancelled their plan to move into a store or have suspended leasing decisions are overseas brands, whose key decision-makers are based outside Japan. CBRE is not yet aware of any cases involving retailers that had previously signed a lease contract paying a penalty to cancel.