Emaar Malls has announced a comprehensive mitigation plan to help its tenants withstand the potential financial pressure from the current situation as a result of the outbreak of the emerging Corona virus (Covid-19).
The company, in a letter to its tenants, obtained a copy of "Emirates Today", that this plan will depend on the closing period of the shop operating within the company's malls.
In detail, Emaar Malls said in a letter to the tenants, "Emirates Today" obtained a copy of it: "In addition to our letter on March 29, 2020, by which we postponed the collection of rental checks to the maximum extent and for the period indicated in the letter, we are also working to extend comprehensive mitigation policies to assist tenants. We have to ease the potential financial pressures resulting from the current situation. "
According to the letter signed on behalf of the company’s chief operating officer, Natalie Bogdanova, comprehensive mitigation policies will replace the initiative to delay the collection of rental checks to the maximum. Previously reported.
The company added that the overall mitigation policies will be implemented as follows:
First: The mitigation policy during the closing period (from March 25 to April 27, 2020):
The letter indicated that tenants whose stores are closed compulsorily by a decision of the government prior to the closing period (such as entertainment and spa stores and other types of related businesses) will also benefit from this category of mitigation starting from the date of mandatory closure of the government until before (first) the date of raising this Closing or (second) June 30, 2020.
The letter indicated that the tenants whose stores are opened during the closing period, will have to pay the calculated rental value for each store: (First) the percentage of the base rent for sales for the comprehensive month of 2019. (Second) the percentage of the value of the return on operating the contractual rental under the lease agreement, whichever Top.
The value of the operating rental income in effect is limited to the closing period, and an invoice will be issued and collected on a monthly basis.
A fixed discount of 70% will be offered on the basic lease and an exemption from the annual marketing fees for the tenants who are not obliged to pay the value of the operating income of the lease under the lease contract, limited to the closing period
Secondly :
Post-closure mitigation policy (April 28 to June 30, 2020):
It includes the tenants who are required to pay the value of the rental income from operating the rental agreement, paying the value of the rental operating income calculated for each store: First: the percentage of the base rent for sales for the comprehensive month of 2019. .
The calculation of the value of this rental operating income is limited to the post-closing period, and an invoice will be released and collected on a monthly basis.
Tenants who are not obliged to pay the value of the rental operating income under the lease will be given a flat discount of 50% on the basic rent, limited to the post-closing period. The proportional amounts of the checks presented, or the payments made by the tenants calculated within the closing and post-closing periods, will be added to the tenant's account with the lessor, and if these checks presented by the tenant are still not disposable, the tenant can provide alternative checks until May 15, 2020.
Emaar Malls, which owns assets that include "The Dubai Mall", "Dubai Marina Mall", "Gold and Diamond Park", "Souk Al Bahar", and shopping centers within the residential complexes, explained that to benefit from the mitigation policies, the following tenants must:
First: settlement of all payments due until March 24, 2020.
Second: Submit the monthly sales report in a timely manner within the contractual dates, when necessary.
Third: to remain open for work during the post-closure period unless the government closes it compulsorily.
Tenants whose lease expires before December 31, 2020, in addition to fulfilling the previous conditions, must renew the relevant lease agreement in a timely manner, in line with the lessor’s offer for a period of no less than the current lease term to benefit from the mitigation during the post-closing period.
Tenants need to sign all documents required to register the relevant mitigation policy terms in a timely manner. All other rental terms will remain unchanged, including the base rent, rental operating return value, service fee, water cooled fee, annual marketing fee and any other fees payable under the lease contract that will not be changed outside of the closing and post-closing periods.
In its message, Emaar Malls emphasized its confidence that the above mitigation policies will help its retail partners cross this critical period, and we remain committed to continuing our partnership together in these difficult times.