[Source: The Standard, by Wainaina Wambu]
Property managers and real estate agents grappling with falling business want new measures put in place to enable landlords and tenants to “share the pain” to prevent massive rent defaults.
This is as reduced salaries, slow business and careful spending hit the economy hard, with some property owners projecting huge losses.
Some tenants are also taking advantage of the situation not to pay rent.
Options mooted to minimise losses for landlords include rent holidays that can be extended up to the end of the lease, rent reductions, discounts and deferred payments without interest.
Landlords have also been asked to continue negotiations on loan servicing with their banks during this time.Knight Frank Managing Director Bob Woodhams, who acknowledged receiving a “stream of letters” from tenants asking for rent holidays, reliefs and waivers, said some tenants were just taking advantage of the situation.
“It seems to me that tenants just make an assumption that it is jolly nice for landlords to collect rent and now want them to turn off that tap and help them out, but that is not the case at all,” said Woodhams.
He explained that if rents were not paid, landlords would be unable to pay for things like service charges or security for the buildings.
He said the slashing of rental income taxes could be a viable option.
Woodhams was speaking at a webinar dubbed ‘The Impact of Covid-19 on East Africa’s Real Estate Market’ that brought together experts from the industry.
Broll Property Group Managing Director for East Africa and Indian Ocean Jess Cleland said the entire real estate value chain stood to suffer.
Fedha Group Chief Executive Dhruv Pandit warned that the call for a 50 per cent rent relief was not viable due to a diverse portfolio mix of real estate agents.
Some real estate sectors including industrial and warehousing, he noted, might emerge as winners from the pandemic.
The Fedha Group boss observed that the hospitality sector, where thousands of jobs have been lost, is the most affected due to high operating costs at a time of zero occupancy.
Though the retail sector is the hardest hit, anchor tenants such as supermarkets have been busier, according to Woodhams.
Gerhard Zeele, Divisional Executive Commercial Property Finance Nedbank South Africa, said the depreciation in African financial currencies would also hit landlords and property developers who were servicing their debt obligations hard.
[Full article: The Standard, by Wainaina Wambu]
