Following the recent announcement of a new legislation deferring rent payments of specific sectors aimed to ban landlords from terminating leases and from taking legal action against those who fail to pay their rent on time, the Hong Kong Retail Management Association (HKRMA) pledged to support the proposed legislation, and urged landlords to go one step further and cut rents for struggling tenants.
The association issued an open letter on 1st March saying the retail industry is in dire straits as the city’s retail sector has been hit hard by the fifth wave of COVID-19.
The association urged shopping mall landlords to collect turnover rent — calculated as a proportion of business turnover — at this juncture, saying that landlords of shop premises should reduce the rent according to the decline in retail sales, or by at least 50 percent.
The proposed legislation, which would be in effect for three months and could be extended for up to six months, would target specific industries, including the 17 categories of premises covered in the government’s latest round of anti-epidemic funding – such as beauty parlours, massage establishments, fitness centres and cinemas – as well as other affected sectors such as retail outlets.
“We believe the legislation will enable landlords to be more willing to negotiate the issue of rent payment with tenants. Retailers need this measure to alleviate the cash flow pressure,” the association said.