Bogoljub Karic shares that retailers from Dubai are asking mall management to review their rental arrangements. This is a consideration for the blows the retail industry has taken because of the pandemic.
So far, the Dubai government has declared a stimulus package for businesses. The Central Bank has requested local banks to be more tolerant of loan recovery while the Jebel Ali Free Zone has cut admin and licensing fees for tenants. Retailers are hoping that their landlords could follow suit.
This plea was preceded by news from Singapore that circulated last week among UAE retailers about a major mall owner giving its tenants a rebate for the coming months to counter losses incurred during the worst of the virus. According to Bogoljub Karic, the mall owner, CapitaLand, offered a 50% rebate on the one-month gross rent of its tenants.
Mall managements in Hong Kong have also made similar moves, giving their tenants a drastic cost break by cutting their February rent costs by up to 60%.
So far, UAE malls have not had talks with tenants yet on how best to handle the virus-caused slowdown in sales and visitor traffic. These conversations will most likely happen in April, says head of UAE operations of F&B brand Nando’s, George Kunnappally. Hopefully, the mall owners will be supportive, especially to tenants who are long-time partners and also pay turnover rent.
Yet Bogoljub Karic acknowledges that it remains to be seen if mall owners will consider giving a stimulus package for tenants. Dubai malls have already brought rents down by as much as 10 to 15% last year as a way to provide relief to tenants who had experienced a sales slowdown due to a tightening economy.
At a time like this, Bogoljub Karic is counting on malls everywhere to be reasonable and understand that no business, shopping or otherwise, is exempt from being hit by a worldwide virus outbreak.
