30% Reduction for Commercial Property Rent Rates

November 9, 2020 11:00 pm | Posted in Business News | Share now TwitterFacebook

By Mavuku Tokona

Caillard & Kaddour (CK) Managing Director, Loic Bernier, has confirmed that a 30% reduction in rental fees for commercial lots has been applied by the real estate company due to the lockdown.

Mr. Bernier said the most difficult part of the pandemic is not knowing when the borders will open, when the status quo of Port Vila will return and how long certain provisos can be kept.

“We have dropped them by 30% for most of our tenants, mostly commercial ones, residential not really but commercial one by 30% and right now we are going through alright, and it looks like some people are taking the opportunity to move because the rent is a bit lower.

“Generally, people are going ok with the 30% reduction and we don’t know for how long, it’s really tough not knowing when this will end but we don’t know for early next year and how long COVID-19 will keep us for the way that it is,” he said.

While a 30% decrease may sound like a bargain, businesses that are highly tourist oriented are still finding the current rent rates difficult to meet.

“We have had some requests but the problem when you have a building with 10-15 tenants and most of the tenants going alright with the 30% and only one wants 50% reduction it’s become sort of an issue.

“I’m only an agent so I have to go through my landlord and ask them what they are happy to do and some of the landlords will say no, some will say yes so we are really going on a case by case. It is taking us a lot of time we at CK, we are trying to help.”

Mr. Bernier said he cannot be playing favourites with the tenants and grant them different concessions, everyone must be treated equally.

“I can’t give in a favour for someone and the other one hasn’t got the same favour, if I give 50% then I have to give 50% to everybody, then if the landlord has issue with financials then it becomes my issue as well, so we have to be careful what we do for each of the tenant because we have to protect the interest of our landlord.”

Keeping the delicate relationship stable between agent, landlord and tenant has gotten a lot more difficult with the inclusion of the pandemic, which the Managing Director of CK says is a first in his career.

“We have never had that sort of issue before, I remember Pam in 2015 where you had damaged houses but at least we knew what exactly needed to done, we have to fix the houses we have to get them sorted out and we have tenants moving in.

“At the moment we have people vacating and we have empty houses to manage and we have no income and we have to accommodate with the problem for the landlord, accommodate with the problem for the tenant, so there’s lots of issue and it’s never been like this before, I have never had in 30yrs as a registered agent those sorts of issues.”

So far, no tenant has been issued a foreclosure notice due to unpaid rent and Mr. Bernier said they are doing everything in their power to help the tenants pull through this difficult time.

“We have no foreclosure yet going on, we have accommodated everybody, we have sent letters to say to the people if they don’t pay we will stop the lease but until now there has been no foreclosure yet.”

According to Mr. Bernier, for the commercial tenants who are finding it difficult to meet their rent, he has invited them to visit his staff at the Caillard & Kaddour office and they will try and assist with the help of the landlord.

“As much as I can I am trying to help everyone in the situation and some people have to come and talk to us in the office as well. Come and discuss, tell us what they are doing to help their business, it’s like a bank, we have to understand exactly their situation, we will help,” he said.

“People should come and talk to us about their situation, I have the staff ready to discuss, as long as we understand their situation we can see what we can do and what the landlord is willing to do.”

In the meantime, Mr. Bernier advised the commercial tenants of Port Vila to be happy with the reduction because it’s better than nothing.

“Having a reduction in rent is better than nothing, my commission is based on income if that income is zero I don’t get any income so I would rather have a reduction in income than nothing, I’m trying to help but in some cases, we cannot go over than 30% and in some cases, we will look at it.