HK Authorities Offer Office Rental Relief Under Latest Budget
HONG KONG – The local authorities plan to adopt rental relief measures similar to those implemented in Singapore and the United Kingdom to reduce the financial burden on small- and medium-sized enterprises (SME) impacted by the stringent restriction arising from the COVID-19 pandemic, reported The South China Morning Post (SCMP) on Wednesday afternoon (23 February, SGT).
Under Budget 2022 to 2023, SMEs in certain industries will be permitted to defer their retail and office rental payments by up to 6 months. This was announced by Financial Secretary Paul Chan Mo-po during the budget briefing on Wednesday, but he didn’t specify which sectors.
If the office landlord or the owner of the retail unit will struggle to repay their commercial property loans because of the rental relief, Hong Kong’s central bank will talk with financial firms to tackle the situation flexibly, he said.
Chan noted that the government intends to pass laws to effect the new measures. This will be valid for three months. If necessary, it will be extended once more for the same period. But the legislation will automatically lapse after 6 months.
“The arrangement will provide enterprises in deep water with breathing space and help secure employment,” he explained, adding that the goal of the latest rental relief measure is to help businesses stay afloat during the resurgent COVID-19 outbreak.
The rental relief is similar to the one implemented by Singapore in 2020, though the authorities there required businesses to show that they suffered a drop in sales in order to be eligible for the relief.
Last summer, the UK government also extended a moratorium on commercial rents until March, 2022. This gave relief to thousands of businesses facing hefty rental bills.
Furthermore, Chan disclosed that Hong Kong’s government will move to prevent commercial property owners from penalising tenants in certain industries for being late in their rental payment.
“Taking into consideration that rental payment constitutes a major part of the operating expenses of enterprises, we will expeditiously introduce new legislation to prohibit landlords from terminating the tenancy of or not providing services to tenants of specified sectors for failing to settle rents on schedule, or taking relevant legal actions against them,” he added.
Notably, Hong Kong has 343,699 SMEs, including 18,050 real estate firms. As of March 2021, SMEs employed 1.21 million people, based on the latest data from the Census and Statistics Department.
At the end of 2020, the Chinese territory also has 11.58 million sq m of retail property stock and 12.43 million sq m of office supply, according to figures from the Rating and Valuation Department.
