Instant rent relief has been granted for Hong Kong retailers leasing space in Housing Authority (HA) properties – a move aimed at alleviating hardship resulting from protest activities.
About 2400 retailers will benefit from a 50-per-cent rent cut which will take effect from October 1 and last for six months. Another 3300 factory tenants will receive similar support. The move will cost the HA around $330 million in forgone income.
“The rent concession will apply to all eligible tenancies that are in force during the concession period,” said a spokesman for the HA. “There will be no rent concession when tenancies are under a rent-free period during the concession period.”
The cut excludes supermarkets, banks and ATM spaces and does not include overheads such as rates and air conditioning.
The spokesman noted the aim of the initiative is to support small and medium-sized enterprises.
“This is in line with the Government’s arrangements for rental reduction for non-domestic tenants, as well as previous rent concession arrangements for the HA’s retail tenants during economic downturns in the past,” the spokesperson noted.
In view of the special rent concession measure, the regular review of the rental of the HA’s individual retail and factory units will be deferred until the six months’ concession period is over.
As a transitional arrangement for retail and factory tenancies expiring soon or in the coming few months, licences will be granted to tenants at the existing rent to enable them to continue the use and occupy the premises upon tenancy expiry, pending agreement on the new rent for the new tenancies.
Upon finalisation of the new rent for the new tenancy, it will take retrospective effect from the original effective date of the new tenancy and the licence fee paid shall be applied to the payment of rent under the new tenancy.
The spokesman stressed that such an arrangement will allow more time for both the HA and the tenants to grasp additional market information for consideration and decision making.
Hong Kong’s financial secretary announced on August 15 a package of relief measures to support enterprises, especially small and medium-sized enterprises, to safeguard jobs and relieve peoples’ financial burden in the challenging external and local economic environment.