The German Property Federation (ZIA) and the German Retail Association (HDE) have developed a code of conduct for owners and tenants of retail properties that recommends how both parties could deal with the losses in rental payments and the level of future rents caused by the Corona crisis. This is because both the real estate industry and the retail sector have been equally affected by the impact of the government-ordered closures.
In order to emerge from the crisis together and counteract rental disputes before they have to be settled in court, the ZIA and HDE are therefore appealing for a consensus to be reached to spread the risk and save the real estate industry and the retail sector. After all, a major problem is that tenants of retail properties are in arrears with rent payments and are unable to meet their lease obligations. Commercial property owners have previously sought to enforce agreed-upon payment claims and interest on late payments to their full extent. Since tenants and landlords of commercial properties both have an interest in being able to survive in the future and keep cities viable and attractive, proposed solutions are needed to give the industries new momentum.
With the aim of appropriately spreading risk, the leading associations of the real estate sectors and retailers propose waiving rents by up to 50 percent for store closure ordinances lasting three months and, at best, also allowing rent reductions for the period thereafter. The amount and terms of the rent reductions could be individualized. Extensions of lease terms, the development of sales-promoting measures such as more flexible opening hours, and other government support programs are also imperative, he said.
Source: ZIA / HDE
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