Wednesday, July 28, 2021

Lessors expecting to lose tenants

Photo from Matina Town Square Facebook page

DESPITE the resumption of some business operations and efforts to waive or defer rental fees, some lessors are expecting to lose most of their tenants.

Association of Mixed-use Property Developers Association (AMPD) president Andy Mark Villorente said several lessors have heeded the calls to waive or defer rental fees of their tenants, but their rents are not guaranteed to continue with the current health situation.

"For the local property developers who are engaged in leasing commercial spaces, especially if your tenants are into food business like restaurants, travel agencies, and other service-oriented businesses like spa, salon, and others, most of them, if not all, are categorized as MSMEs (micro, small and medium enterprises) and these businesses have been hit hard by this pandemic," he said.

"We expect most of those spaces presently occupied by the above-mentioned businesses will be vacated due to closure caused by this pandemic. If they close, that is a revenue loss for us. In short rental, revenue is really down and it might not be enough for some to pay their monthly expenses," he added.

AMPD, along with other stakeholders such as the Restaurant Owners Association of Davao City Inc. (RestoDC), recently appealed to the City Government to revert real property taxes to the 2017 Real Property Tax rates until 2023.

"Definitely, this will be a big help to local developers or lessors, if approved," Villorente said.

He noted that much like other businesses, they have also suffered significant losses due to the coronavirus disease (Covid-19) pandemic.

"Please note that not all lessors have the same scheme as far as discounting is concerned because each has a different status financially, different financial obligations thus each of us has different financial needs in order to survive," he said.

"This pandemic has cost the lessors a lot, waiving their rentals means no collection and no revenue. The same with deferment. Extending discounts means lost in revenue, while financial obligations remain the same such as bank loans, utilities, payroll, taxes, and other essential services," he added.

Villorente said they were not also spared from being forced to lay off some employees and downsize their operations to keep their company afloat.

"Our goal now is just to survive this crisis, we will be happy just to make breakeven, but today to hit breakeven is such a challenge to achieve, to be honest," he said.

He hoped that the efforts of the government to proceed with caution until there is a vaccine will be successful in helping businesses to recover.

"This crisis has changed the behavior of the people in terms of spending, as a result of this, I can see that some businesses will not survive and will end up closing their stores. It is going to be a rough ride for all of us," he said.

"If everything goes as planned, and if we only get a manageable number of positive Covid-19 cases every now and then, I can see a slow recovery, at least. But it is never going to be the same until there is a vaccine," he added.


SunStar website welcomes friendly debate, but comments posted on this site do not necessarily reflect the views of the SunStar management and its affiliates. SunStar reserves the right to delete, reproduce or modify comments posted here without notice. Posts that are inappropriate will automatically be deleted.

Forum rules:

Do not use obscenity. Some words have been banned. Stick to the topic. Do not veer away from the discussion. Be coherent. Do not shout or use CAPITAL LETTERS!