State to provide €4 million in shopping mall rent payment support
The government is to support businesses based in shopping malls which have been hit by the coronavirus pandemic, to the tune of €4 million. The support, to be distributed by the finance ministry, is aimed at stores and similar which were forced to close down from late March as a measure against the virus' spread, and could when applied see outlets rents at least halved. Currently, only supermarkets, pharmacies, bank offices, mobile phone stores and a few other outlets which the government calls essential are open within shopping mall premises nationwide.
The government supported a proposal from the merchants' union (Kaupmeeste liit), the major lobby group, to cover at least part-rental payments. Companies would have needed to have seen a turnover fall of at least 30 percent, the closure of the store as a result of the emergency measures, and a reduction in the rent from the lessor, to qualify, with the lessee still agreeing to make part-payments in rent.
"Due to the emergency situation, the trade sector was hit hard, but at the same time the restrictions were necessary to stop the crisis," said Minister of Finance Martin Helme (EKRE).
"Most of the retail space in shopping malls has been closed, which has at times led to a fall in turnover of up to 90 percent. We found that the state should help to partly cover this loss."
If a lessor makes a 25 percent rent discount to an outlet, the state will match this euro-for-euro, meaning in effect the lessee's final rents will he halved.
If the lessor discounts rents by 50 percent, the state will also provide 25 percent, meaning the lessee only had to pay 25 percent of their pre-crisis rents.
While shopping malls stores which have closed are mostly making zero sales – unless they operate an online store – rents are still due. Since the measures were imposed in late March, the first rental demands since the move was made will have been received by most or all businesses operating in malls.
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Editor: Andrew Whyte