At Happy Coast Coconut Grove Beach, the 6th Shenzhen Happy Lantern Festival has been decorated with lanterns and festoons. According to usual practice, this must-go event for Shenzhen residents during the Spring Festival will usher in a peak flow of people in a few days. At this time, it has just been one day since Zhong Nanshan said that the new coronavirus pneumonia may be transmitted from person to person. Most people have not yet realized the seriousness of the epidemic, let alone the serious impact this epidemic will have on physical businesses.
html On November 25, Shanghai Jiuguang Department Store canceled the New Year lucky bag event originally scheduled from January 25 to January 27; on January 27, Beijing Parkview Green adjusted its business hours from January 27 to February 2 to 11:00-19:00; on February 1, Shenzhen Joy Coast issued an announcement that the business hours of Happy Coast Shopping Center will be adjusted to 11:00-19:00, and the shopping hours of Ole Boutique Supermarket in the shopping center will be adjusted to 10:00-20:30. OCT Secret Realm, "Deep Blue Secret Realm" Water Show Theater, Ocean Fantasy Pavilion, and Shenzhen Happy Lantern Festival will be temporarily closed.According to monitoring by the Ministry of Commerce, during the 2019 Spring Festival holiday (February 6-10, 2019), retail and catering companies nationwide achieved sales of approximately 1.005 billion yuan. Affected by the epidemic in 2020, the retail and catering industries encountered a "cold winter" during the Spring Festival.
China Business Network conservatively estimates that during the Spring Festival, the losses in catering (80% severe damage), retail (50% loss), and leisure entertainment (nearly a total loss) are predicted to be as high as more than 500 billion yuan, and the overall loss of the shopping mall industry is estimated to be more than 80%.
As the owner, hundreds of real estate developers have introduced policies such as rent reduction and exemption to varying degrees. How to tide over the difficulties has become a problem that commercial real estate practitioners collectively think about, explore and put into practice during this period.
On February 8, 2020, the Shanghai Oriental Pearl Tower lit up to cheer for Wuhan. The Paper reporter Zhu Weihui Picture
Collective rent reduction
html On November 26, the second day of the Lunar New Year, Shanghai Jiuguang Department Store just canceled the New Year lucky bag event one day ago, and Beijing SKP, known as the "best seller" of domestic shopping malls, issued a notice to adjust its business hours. On this day, Poly Commercial announced that its 22 shopping malls across the country will exempt brand merchants from rent for 6 days from the first day to the sixth day of the new year. On the same day, Dongyuan Commercial quickly launched the "Together Together" operation. In the first phase, from the first to the fifteenth day of the new year, rents for various brand merchants in Dongyuan Commercial's shopping malls were halved for 15 consecutive days. html On November 27, Powerlong Commercial decided to give its operating shopping mall brand merchants a preferential measure of halving rent from the first to the ninth day of the Lunar New Year. html On November 28, Wanda Commercial Management Group announced that it will implement a policy of waiving rent and property fees for all Wanda Plaza merchants across the country from January 24 to February 25. With the implementation of this policy, it is expected that the rent reduction and exemption amount will reach 3 billion to 4 billion yuan.In the following days, with the severity of the epidemic and the continuation of "all people staying at home", news about rent reductions and exemptions from real estate developers came one after another. On January 30 alone, New City Holdings , Longfor Group , Aegean Group, KWG Group, Shui On Real Estate Co., Ltd. , Xiangsheng Group and many other companies announced varying degrees of reduction and exemption policies.
Longfor Group announced that from January 25, 2020 to March 31, 2020, the rental fees for all merchants in its shopping malls will be halved. The above-mentioned rent reduction and exemption policy covers 10 cities including Chongqing, Chengdu, Xi'an, Beijing, Shanghai, Hangzhou, Suzhou , Changzhou , Nanjing, and Hefei, where Longfor has commercial layout. It involves 39 shopping malls in operation (including Tianjie, Xingyue Hui, and Jiayue Hui), and supports more than 4,500 cooperative brands.
Xincheng Holdings announced that its Wuyue Plaza , which is distributed across the country, will implement a halving policy for all merchants from January 25 to February 13 to tide over the difficulties together. Up to now, Xincheng Holdings has opened 64 Wuyue Plazas across the country. Among them, the self-operated Wuyue Plazas are subject to the above-mentioned 20-day rent halving policy.
According to the survey statistics of the commercial real estate working committee of the All-Union Real Estate Chamber of Commerce (referred to as the "All-Union Commercial Real Estate Working Committee") on the donations or measures of its member units, as of February 3, among the companies that responded, a total of 79 commercial real estate operators have implemented preferential policies for rent reduction and exemption.
The dispute remains to be resolved
While commercial real estate operators have joined the "rent reduction trend", on February 1, an article titled "Xibei Jia Guolong : The epidemic has left more than 20,000 employees unemployed. The article "Loans to pay wages can only last for March" was widely circulated in WeChat Moments. In an exclusive interview with China Investment Network, Xibei Catering Chairman Jia Guolong said that Xibei's 400 offline stores have basically closed down, and the salary expenditure of more than 20,000 employees is about 150 million yuan. If the epidemic is not effectively controlled in a short period of time, the cash on Xibei's account will not last for three months.
When reporters mentioned that many shopping mall properties have introduced varying degrees of rent reduction and exemption measures for tenants, Jia Guolong said, "You made me close my business, and you still charge me rent. You definitely can't do it anymore."
Jia Guolong’s views are not unique. Many tenants even believe that the epidemic is a force majeure, and they cannot perform the contract due to force majeure and do not bear civil liability. Wang Yongping, chairman of the All-China Commercial Real Estate Working Committee of
, believes that the reason for this phenomenon is that "we value moral mutual assistance but underestimate legal responsibilities." For example, if the government issues a notice to close a store, what responsibilities should the owner bear? Rent is the main source of shopping malls. After the landlord reduces the rent, will the government provide tax reduction and other relevant policy support, and can bank loans be deferred?
In the questionnaire sent to commercial real estate groups by the Commercial Real Estate Working Committee of the All-Union Real Estate Chamber of Commerce, in the column of relevant policy suggestions, commercial real estate operators put forward a series of suggestions: tax support for affected enterprises and reduction of various tax burdens; banks will provide certain reductions and exemptions on loan interest, grant a grace period for defaults due to the impact of the epidemic, and cannot pursue liability for breach of contract; reduce or delay the implementation of policies in real industries, especially consumption-related industries. Policy expenditures, such as: delaying the payment of five social insurances and one fund; encouraging companies to create jobs and giving special rewards; it is recommended that business interruption insurance be appropriately relaxed in terms of insurance claim conditions, or compensation can be paid at a certain proportion...
Wang Yongping said that real estate operators with rental income as their main source of income can only provide further support to tenants while rescuing themselves after they have a clear understanding of their own income and expenditure status. He hopes that relevant policies will be introduced as soon as possible.
As of press time, Shanghai has issued "Several Policies and Measures for Shanghai to Prevent and Control the Epidemic to Support the Steady and Healthy Development of Service Enterprises" on February 8. Article 9 of "Reducing and Reducing Corporate Housing Rent" encourages various market operating entities such as large commercial buildings, shopping malls, and parks to reduce or reduce rents for tenants operating entities. Enterprises that take the initiative to reduce or reduce property or land rent for tenants and find it difficult to pay property tax and urban land use tax can apply for reduction or exemption of the corresponding property tax and urban land use tax.
Lawyer’s statement
The COVID-19 epidemic is regarded as a “major public health emergency” at the national level. Can the lessee claim for rent reduction or exemption? Lawyer Zheng Yu from Shanghai Bangxiyang Zhongjian Zhonghui Law Firm gave the following interpretation:
Most of the legal community believes that the COVID-19 epidemic is an objective situation that is unforeseeable, unavoidable, and cannot be overcome by the current medical level. It meets the conditions for "force majeure" stipulated in Article 117 of the Contract Law and Article 180 of the General Principles of the Civil Law.
However, even if the COVID-19 epidemic constitutes force majeure, it does not necessarily apply to commercial real estate leasing contracts . Likewise, it does not necessarily lead to rent reductions and exemptions. If a lessee claims that force majeure applies to rent reduction and exemption during the COVID-19 epidemic, it must first determine whether the corresponding commercial real estate lease contract cannot be performed at all, and there must be a direct causal relationship between the inability to perform the commercial real estate lease contract and the COVID-19 epidemic. The legal consequence of the inability to perform the contract due to force majeure is to terminate the contract, and the legal liability of the parties can be partially or completely exempted based on the impact of force majeure.In other words, if force majeure applies to terminate the contract, whether the lessee can fully or partially exempt the rent depends on the extent of the impact of the COVID-19 epidemic.
In addition, some lessees have argued that the situation of should be changed to on the grounds that the COVID-19 epidemic was unforeseen and requested rent reductions and exemptions. At present, the legal community generally believes that after eliminating commercial risks, if the continued performance of the contract due to the epidemic is obviously unfair to one party or cannot achieve the purpose of the contract, the lessee may claim to the People's Court that the change of circumstances rule applies in accordance with the provisions of Article 26 of the "Interpretations of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China (2)". However, the change of situation must be determined by the People's Court, that is, if the lessee intends to claim for rent reduction or exemption by changing the lease contract on this basis, it must be determined by the People's Court based on the principle of fairness.
Sharing weal and woe
Commercial real estate companies and brand merchants, as landlords and tenants, are originally opposites of interest, and together form a consortium that provides content services for consumption. Under the current COVID-19 epidemic, both of them have been pushed into the same trenches and faced the same test of life and death.
Ten Thousand Business Club conducted a survey on 110 offline commercial and commercial real estate companies and put forward a number of actions and suggestions under the "epidemic life and death battle". Yang Zexuan, the founder of
, said in an interview with The Paper that as an online grasshopper, if brand merchants cannot survive during the epidemic, commercial real estate companies with rental fees as their main source of income will naturally be in danger. Therefore, this time, commercial real estate companies have unprecedentedly united to launch rent reductions and exemptions. But what are the difficulties for commercial real estate companies? In addition to the pressure of epidemic prevention and control issues as a space provider, the main concerns are that rental income is expected to decline significantly and tenants may lose large areas of space.
Yang Zexuan believes that increasing revenue and reducing expenditure are the two major directions for self-rescue and mutual assistance for commercial real estate operators during the epidemic. The open source of
is to find more sales paths, help brand merchants to open up online channels or enhance online channels, etc. Perhaps this epidemic will accelerate the channel integration of offline-oriented brand merchants.
In terms of cost-saving measures, the key actions taken by commercial real estate companies are mainly internal management measures and seeking tax exemptions or refund subsidies from the government.
Currently, in order to help brand merchants tide over the difficulties, commercial real estate has adopted rent reduction and exemption measures and corresponding cost-saving measures. On the one hand, it has jointly formulated countermeasures with tenants, and on the other hand, it has sought support from the government or industry associations.
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