FPP, ZPPHiU: Tenants should pay 20% of the rent for the closing period of the mall

by   CIJ News iDesk III
2021-04-27   10:27

The Federation of Polish Entrepreneurs (FPP) and the Association of Polish Employers of Trade and Services (ZPPHiU) express a positive opinion on the proposal to pay 20% of rents by tenants of shopping centers for the period of closing these centers, i.e. the solution proposed by the government. This is support for shopping center owners, but tenants are willing to support it in the name of business solidarity, the organizations said.

FPP and ZPPHiU indicate that the Civil Code clearly specifies - in the event of lack of performance, the parties to the contract for reasons beyond their control, and shopping malls fail to provide contractual footfall rates - the other party to the contract, i.e. the tenant, also has no obligation to provide services.

Thus, tenants are not obliged to pay rents during the closing of shopping malls. Work should also start as soon as possible to define the terms of cooperation during the recovery from the lockdown - after the opening of shopping centers, and to balance the terms of contracts between landlords and tenants.

"The payment of 20% of the rent for the closing period of shopping malls is a big financial burden for every entrepreneur who cannot run his business and has no income. , in which we support and help owners of shopping centers in this way. We are eagerly awaiting the details of the solution proposed by the government and the executive regulations - however, this proposal cannot be called an 80% reduction in rent. For this period, tenants should not legally pay rent - so the payment of 20% of the rent is a support and contribution to the owners of the gallery in the name of business solidarity.In addition, already today you should think about the conditions of cooperation during the recovery from the pandemic period and after the end of the restrictions - three months during which the rent will be 50% will not be sufficient, to restore traffic listed in 2019 "- said Zofia Morbiato, the director general of the Association of Polish Trade and Service Employers (ZPPHiU).

FPP and ZPPHiU point out that the key will be to transparently provide real data on the number of visitors to shopping malls in the coming months.

The data presented so far has not been confirmed by the traffic recorded by tenants and their turnover. Overestimated data could have been the cause of an incorrect assessment of the situation in terms of the spread of the coronavirus and thus more restrictive restrictions - it is difficult to clearly confirm that large commercial facilities are more dangerous than Moreover, it can be assumed that in large spaces it is easier to implement and comply with a sanitary regime, and more effective infection control measures can be put in place.

ZPPHiU has repeatedly drawn attention to the fact that there are no data confirming the relationship between the opening of shopping malls and the increase in coronavirus infections, and shops in shopping centers operate in the highest sanitary regime.

"Sales in February 2021 were lower than last year's by 30%, and footfall by almost 50%. Only around Valentine's Day the number of visitors to our salons approached 75% of last year's value. Unfortunately, in the next week it started to decline again and at a low level of 50-60%, it remained until the end. In fact, during this time we only had 3-4 days of better sales, which gave hope for a near return of 'normal' times "- pointed out Paweł Korobacz, expansion department director, YES Bizuteria SA

The key now is to develop new, balanced terms of cooperation between landlords and tenants - with particular emphasis on the equality of contracts based on mutual, partnership relations. Agreements should include the link between the amount of rents and the number of visitors to shopping centers or the level of the tenant's turnover.

"Shopping malls and stores operating in them - apart from the tourist and catering industry - are most affected by pandemic restrictions. The government should pay special attention to building long-term support for these sectors. long-term strategy to rebuild these businesses. It is clear that the situation will not return to normal for many months after the economy has been thawed. Moreover - the existing forms of state aid in this sector have been far from sufficient, and e-commerce cannot fill the gap Only system solutions will allow entrepreneurs - in many cases Polish small and medium-sized businesses - to slowly earn funds and cover losses from the years 2020-2021 "- said the president of FPP, the president of the Center for Legislative Analysis and Economic Policy (CALPE) Marek Kowalski.

He reminded that such a system solution was proposed by FPP for the catering and agricultural industry in the form of a benefit for employee meals.

"Now is the time for the retail and services segment - it is becoming very important to provide support in several key areas: strengthening financial liquidity, protecting jobs and reducing fiscal burdens. It is important to understand that paying up to 20% of rents in closed shopping malls is a help for landlords - not for tenants. But government support for landlords may be broader - for example, it may include postponing loan installments and interest incurred for the purchase or construction of a shopping center. problems that need to be urgently resolved. Lessons from the pandemic period must be reflected in the provisions of the agreements " - summed up Kowalski.

Source: ISBnews