Small businesses in a bind as rent payments due

foto: Pixabay foto: Pixabay

Business which had to close their doors due to the coronavirus lockdown have been left without revenue. To add to their woes, many need to pay rent and running costs. Some landlords have decided to help them by deferring rent, others are still deciding what to do.

 

Small businesses selling non-essential goods and providing various services, as well as bars and restaurants were forced to close shop in mid-March, and many of them warn that they might not be able to re-open at all.

Many of them find it difficult to pay wages for March, let alone rent and utility costs.

Owners of shopping centres and malls have come up with different solutions for the problems of their tenants, and all of them stress that this is the first time they have encountered such a situation.

The retailer Tuš said it had not decided yet whether to lower rent, while Spar said that the "situation requires a great deal of adjustment and understanding, but we believe that we will find optimal solutions in the spirit of good cooperation."

Supernova, the Austrian-owned shopping mall operator, said it was in constant contact with tenants, making individual arrangements. "We want to balance out the consequences, as one side must not bear all the consequences, be it the tenant or the landlord."

SES Slovenija, which operates the shopping malls Citypark, Citycenter, Europark and Aleja, with the last one yet to be opened, has admitted that the crisis has taken them by surprise, and that many issues remain open.

The company has allowed its tenants to defer rent and operating cost for April. "By doing so we want to help entrepreneurs maintain their liquidity, even before the state adopts measures to support commerce and before this aid takes effect."

It added that additional support measures for salvaging Slovenian retail, services and hospitality companies were not excluded, but this would depend on the financial support from the state and the duration of the restrictive measures.

As for Aleja, which was supposed to open on 19 March, SES Slovenija said that individual solutions were being sought with tenants. "All partners will be able to defer payment of rent from the date of the planned opening to the date of actual opening."

The company would like to see the state come up with a plan for re-opening shops and individual branches of industry, as this would help all stakeholders organise and optimise costs.

The Slovenian Chamber of Commerce (TZS) will, according to its president Mariča Lah, publish this week an assessment of the situation in commerce, which will serve as basis for a proposal to re-open shops selling technical goods.

Rent could be tackled by the additional anti-corona legislative package, which is being drafted by the government.

The TZS has proposed a model for distributing the burden, under which the state would cover around 70% of rent, and the payment of the remaining amount would be agreed between the owner and tenant.

Under this model, landlords would not be able to terminate contracts due to the non-payment of rent, which would be applied retroactively as of the day when the epidemic was declared, 12 March.

SES Slovenija added that retail, as one of the largest employers in the country, had been severely affected and that comprehensive measures would be needed. It proposes that the state subsidises write-offs of goods which could not be sold.

The company also proposes that the state provide grants to businesses for the costs incurred during the closure and for a certain period after the closure (rent, insurance premiums, leasing instalments and utility bills).

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