Title: Adjusting Rent Prices for Retailers: HDE's Proposal to Landlords
The German Retail Association (HDE) is urging property owners to consider reducing rental prices for retailers, including those in culture, cabaret, and gastronomy. HDE President Alexander von Preen recently shared this advocacy with the German Press Agency in Heilbronn, arguing that current rental rates are incongruent with market capabilities.
In today's climate, the upward trend in rents no longer holds. Premises should be leased under terms that align with retail concepts, suggesting there's a need for both landlords and retailers to collaborate on developing new ideas. von Preen, the head of Intersport Germany, is encouraging open communication between landlords and retailers not just in times of crisis but proactively.
Insolvency proceedings have shown that negotiating rent reductions can be an effective strategy. In these cases, if the business model proves viable for the future, rents are often agreed upon at lower levels. Rather than adhering to this trajectory, von Preen advocates for discussing creative framework conditions beforehand as a means to avoid pushing businesses to the brink of insolvency.
A challenging economic climate has caused well-known chains to abandon German high streets, while many smaller businesses have also shuttered doors. In light of these circumstances, the HDE estimated that around 9000 stores might close permanently by 2023, leaving around 311,000 retail establishments nationwide.
For a thriving future city, von Preen proposed establishing guidelines on successful collaborations between the various players in German city centers in the upcoming year. He even found turnover rents (a combination of a base amount and a percentage based on generated income) to be a viable solution. However, state regulations were deemed unnecessary, with von Preen believing in landlords and tenants finding solutions on their own.
With a prosperous city in mind, landlords and tenants working together to develop viable solutions can lead to future success.
Additional Insights
- Economic stimulus measures and government responses to the COVID-19 pandemic in Germany have included various financial aid programs, loan schemes, and tax deferrals to help businesses affected by the virus.
- The "Novemberhilfe" (November aid) initiative provided financial assistance to businesses, including retail stores, to help them navigate the second lockdown.
- Although court rulings primarily focus on the legality of government measures and restrictions, the legal framework in Germany emphasizes the importance of fair and equitable treatment, which could potentially support rent concessions arguments.
- Promoting fair housing and zoning ordinances in Erie County, New York, offer an indirect context that could influence how local regulations impact rents and the overall business environment.
Stimulating economic growth, mitigating financial burdens, and promoting fairness and equity in the business environment could shape arguments supporting landlords' provision of rent concessions for retailers. These insights are derived from broad economic and social considerations rather than specific HDE suggestions.
