For Businesses Not Receiving Compensation, Owners Reach Out to Help: Lower Taxes

During the first quarantine, companies affected by operating restrictions were able to benefit from the partial rent compensation aid measure. 50 percent of the rent for the premises at that time was covered by the state, 30 percent. the discount had to be granted by the lessor himself and the remaining 20%. companies covered from their own pockets.

Although small businesses saw the measure as one of the most useful in difficult times, during the second quarantine, the government refused to extend the aid measure. It has been alleged that this decision was made as a result of the administration of an excessively costly relief measure.

Delfi’s major retailers, shopping malls and commercial real estate managers have been asked whether, although the government has abolished this relief measure, today the owners help small businesses and offer discounts on their own.

Romanovsky: we have several categories here

Andrius Romanovskis, President of the Lithuanian Business Confederation, stated that there are several situations related to trade discounts.

“I have heard very different information, some owners help, others not. I am referring not only to supermarkets, but in general to the owners of the premises.

Some ask if that compensation from the state will be, if not, then there will be no discounts, here as it was during the first quarantine.

The second category of owners who do not ask, but see the situation and give those discounts, which are significant, up to 50%, and sometimes even totally exempt.

So another category is that if there is any measure available then there will be a response and discounts will be given.

I would say that the situation is different and it all depends on the relationship, responsibility, ethics, perception, benevolence. Because, on the other hand, some run the risk that if the tenant abandons them, the premises will be left empty. See how many empty spaces there are on Pilies Street that I think will be empty for a long time. Maybe it’s the story when there was no agreement, ”he said.

The fee is reduced by up to 50 percent.

Ernesta Dapkienė, director of the Department of Communication and Image of Maxima, informed the editorial staff that there are currently about 430 tenants in the premises that the company manages, and Maxima expressed solidarity with the small and medium-sized businesses whose activities were restricted or completely suspended in the spring of 2020, only after the first quarantine has been announced.

As he explained, the rent of the premises was later reduced to 50% for merchants located in the company’s premises, as well as flexible payment terms.

“Discounts were granted to tenants during 2020. Maximai sowed more than 1.5 million euros. The rental discounts still apply now,” said E. Dapkienė.

He said that the rent for companies located in the premises of the Maxima retail chain and without previous debts, which cannot operate due to the introduced and strict quarantine conditions, is still reduced to 50% today.

“Those companies whose activities are only partially restricted during the quarantine period are granted a rental bonus proportional to the reduction in billing, and its maximum amount may also reach up to 50%. The representative explained, adding that in addition, the Companies can also defer the payment of rent for up to 6 months.

“During this period, companies are still forced to pay for utilities on time,” he said.

Developed a strategy

Mindaugas Žilinskas, head of Rimi Lietuva’s real estate department, also said that during the first quarantine, discounts were applied to the rent of the premises for tenants located in the Rimi-owned shopping centers, as well as in the right of -Travel supermarkets .

As explained, they were applied individually, depending on the activity of the lessee, whether it was admissible and enforceable or was totally suspended, as well as the terms of the lease, financial obligations and other circumstances, which were evaluated individually for each lessee.

According to M. Žilinskas, the retail chain is also currently preparing for business self-help.

“We are now ready for a rental discount strategy for the tenants most affected by the second wave of quarantine, we will use principles and action plan similar to those of the first quarantine,” he promised.

The discount was 100%, now – 50%.

Baltisches Haus, one of the largest commercial real estate development and management companies in the country, also owns around 260,000 m2. subway. commercial premises, where some 650 companies develop their businesses. As Raimonda Mailaitė, your marketing project manager, said, grocery stores like Iki, as well as cafes, pharmacies, sports clubs and others.

He explained that during the first and second quarantines, the commercial real estate company cooperated with its tenants and their discount for renting a premises during the first quarantine was 100%.

“In the spring, just after the introduction of the first quarantine, about 700 of the 1,200 sales and service outlets owned by Baltisches Haus, which are occupied by tenants, were closed for a month and a half, that is, around the 57% of all points.

Two weeks after the start of the first quarantine, we decided to act ourselves, without receiving any decision from the Government and without evaluating our capabilities. We then made the decision to give the tenants 100 percent. discount during the activity insurance period.

At the end of the third month of the second quarantine, 330 of the more than 650 tenants of the Baltisches Haus are completely out of service and 570 are closed, or 48%. all points of sale and services.

This year we have decided to grant 50%, taking into account recent State aid measures for businesses and our ability to provide additional aid. discount during the period of insurance activities, but not beyond the end of February, ”he said.

According to R. Mailaitė, as during the first quarantine, today discounts are granted only to those tenants whose activities are prohibited due to the quarantine and who do not have historical debts for rent and utility bills.

Negotiate individually

Delfi asked what discounts are applied by large shopping centers, such as Akropolis, Mega and BIG Vilnius.

Dominykas Mertinas, Head of the Communication Department of the Akropolis Group, commented that the shopping center today has about 650 tenants in Vilnius, Klaipėda and Šiauliai, who were granted discounts and allowed to use government compensation last year under the Government-approved partial rental compensation measures. .

If those discounts also apply to tenants at this time, he said, it is negotiated on a case-by-case basis.

“Taking into account the new business support measures approved this year, we are also negotiating with the tenants individually, looking for the most optimal solutions.

Our mutual agreements and obligations are defined by confidential leasing contracts and their annexes, so we cannot comment on the terms of specific agreements with business partners, ”explained D. Mertin.

Representatives of the Mega shopping center also assured that during the first quarantine, the tenants received discounts, but at present the situation is not clear.

“The cooperation model of the second quarantine is not entirely clear, the individual situation of each tenant is evaluated and the objective is to objectively maintain the balance of the parties,” it was stated in the responses received.

Rimantė Merkevičiūtė, PC BIG Vilnius manager, also spoke about individually coordinated discounts.

He said that a discount negotiation process with tenants is currently underway.

“On an individual basis in each case, we prepare agreements and negotiate with the tenants.

I would also like to remind you that almost 50%. “There are operational tenants in the BIG Vilnius area, because their activities are allowed or they act as collection points,” he said.

According to R. Merkevičiūtė, the majority of BIG Vilnius tenants ended the year with low annual turnover.

“Comparing 2020 and 2019. The total drop in tenant billing is 16%, which was mainly due to restrictions imposed in the spring and at the end of the year, during the Christmas period, that prohibit the activities of many tenants .

The Christmas trade has a very significant impact on the annual results of the tenants and the mall, ”he said.

Eligible for grants

While measures such as rent compensation no longer exist, today’s businesses are eligible for subsidies.

“Companies affected by COVID-19 and whose turnover has fallen by at least 30% can take advantage of the current subsidy instrument, which is more flexible and the company can decide how to use it: pay rent, utilities, etc. Grant applications must be submitted by companies through My STI. The first subsidies were already distributed just a week after the entry into force of the measure. A total of 150 million is earmarked for this. euros.

Businesses can also apply to INVEGA for direct COVID-19 loans at reduced interest rates to finance operating expenses. Up to 100 thousand. Loans worth 1 million euros are available for a company whose turnover has fallen by more than 30% due to COVID-19. A total of 30 million. The Ministry of Economy and Innovation commented.

It was also indicated that 150 million are currently being prepared. A second package of € 1 million in business support to help those most affected by COVID-19, small and medium-sized companies, which are self-employed, is also planned to refund the market tax.

“These measures are currently being coordinated with the social partners. If the coordination process proceeds smoothly, the measures in the second package could be used by companies in the second half of February,” the ministry said.

The combination of downtime compensation and these relief measures will provide around € 500 million to help businesses.

The Ministry of Economy and Innovation has also stated that it does not plan to expand the rent compensation measures previously applied by the Government. “This decision was made after consultations with the Ministry of Finance, and was also influenced by a letter received from the Special Investigation Service (STT) regarding the questionable transparency of this measure and the correct use of the funds,” said the representatives.

Delfi recalls that an analysis carried out some time ago by the Special Investigation Service showed that 7 million euros were spent, that is, approximately one third of the partial rent compensation measure, in the premises of large supermarkets.

In addition, cases have been identified in which the tenant has been related to the owner by kinship, ownership and management of the business.

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