AK: Shuttered stores awaiting rental relief

Closed stores in malls. Source: Anna Aurelia Minev/ERR

A large number of stores in Estonian malls, which are closed from Thursday (March 11), are rental properties and must continue to pay rent despite a drop in earnings. Stores do not yet know how much rental relief they will receive from the government.

Large malls have always been crowded, and the public often spend several hours at a stretch there. The aim of the new lockdown restrictions is to bring all contacts to a minimum and thus, take people away from malls, ETV news show "Aktuaalne kaamera" (AK) reports.

Unfortunately, the tenant of a store needs to keep on paying the rent. Last spring, the state offered rental relief on the condition that the landlords helped out too. Stores are hoping for a repeat of this.

"I have given the message that we will wait for the agreement which we will reach with the government, then we'll find our own structure, i.e. how much will the tenant pay, how much will we be paying and to what extent the government will help out," manager of Ülemiste Keskus, in Tallinn, Guido Pärnits, said.

"But, of course, we understand that a mall isn't valuable when there are no tenants. However, it should be considered that property owners and malls have their expenses, which they won't be escaping from," he added.

Last year, €4 million was intended for rental subsidies, but only €1 million was used, mostly relating to the terms and conditions.

"The terms that were established weren't directed to where the necessity was the highest. This time we want to be as precise as possible," Minister of Finance, Keit-Pentus Rosimannus (Reform) said.

Rosimannus says she hopes the details will be clear in around two weeks from now.

It is difficult to draw a parallel with last spring, since lots of businesses then had the financial backup to survive a couple of months, while this is not the case anymore.

"There are tenants, there are segments that have not really recovered to this day, and with varying degrees of success, we have had to support them to a greater or lesser extent to this day. Help is definitely needed for tenants," Ivar Pinsel, the manager of the Pärnu Kaubamajaka mall, said.

"We have made the first decisions concerning March. We have decided that we will offer a rent discount to those tenants who have been closed by a government decision. But we cannot offer tenants zero rent rates, precisely because landlords probably wouldn't then be supported," Marju Jeedas, head of another mall, Tartu Lõunakeskus, added.

What will happen after March, what subsidies are expected for commercial and real estate owners, is being awaited at the moment.


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Editor: Roberta Vaino

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