According to CBRE, the level of paid rent in shopping centers (SC) for the first quarter of this year is around 40 percent. This is mainly influenced by the shops they have open. Most sellers announce that they will pay the rent due only after receiving subsidies from the state. At the same time, they are waiting for the resumption of operations so that they can obtain financial resources from the sale of goods that currently lie in their stores and warehouses. Tomáš Míček, head of the retail sector and shopping center management department for the real estate consulting company CBRE.
According to Míček, the current situation is not easy for SC tenants, most of them have already exhausted their financial reserves. The government no longer counts on the continuation of the COVID rent program, in which the state contributed 50 percent to rents for the second, third and fourth quarters of last year. It has prepared a new COVID Uncovered Costs program, which would compensate for 60 percent of the costs.
According to Míček, this could be advantageous for tenants, because they could use the money to cover part of their obligations to landlords. According to him, the remaining amounts due on rent will be the subject of further negotiations between tenants and landlords with regard to possible discounts or deferral of payments.
“According to information from the owners of the centers we work with, they are still willing to help traders overcome the current difficult situation and in many cases are ready to provide tenants with discounts or extend the maturity,” said Míček. According to him, this is an individual solution between the owners of the centers and individual stores. The amount of the discount is assessed on a case-by-case basis, he added.
Representatives of entrepreneurs are asking the government to keep the COVID rental program as one of the most effective subsidy titles. According to the chairman of the Czech committee of the Association of Shopping Centers, Jan Kubíček, state expenditures on this program are negligible in the context of the assistance provided. But it is a crucial help for companies, he said today.
So far, the Ministry of Industry and Trade has received about 94,000 applications for CZK 8.7 billion in three COVID rent calls. In the first call, 98 percent of the applications received were approved and CZK 2.6 billion were paid out. Officials are still evaluating applications from the second call, so far they have approved 97 percent of applications worth CZK 3.3 billion. Entrepreneurs can apply for a rental subsidy for the fourth quarter, in the third call, until April 8. They accepted applications for about CZK 2.7 billion on Tuesday, and has approved about half so far.
