More and more well-known retail companies, but also hotel brands, are stopping rental payments for their branches in Germany due to the closures ordered in the fight against the corona virus. Even large retail chains such as Deichmann or H&M and well-known brand manufacturers such as Adidas use the option provided in the law to mitigate the consequences of the Covid 19 pandemic to suspend rental and ancillary payments. This was revealed on Friday by a survey by the German press agency. At the real estate owners association Haus & Grund, the one-sided approach of the retail chains met with sharp criticism.
According to Manager Magazin, the hotel chain 25hours has already stopped paying leases, as CFO Steffen Fox confirms the magazine. Thomas Wilms, CEO of Deutsche Hospitality, to which the Steigenberger Group belongs, would like the lease to be deferred for at least three months. According to the magazine, Marco Nussbaum, head of the Prizeotel hotel chain, wants to achieve in negotiations with the lessors that he will not have to pay anything over the next few months. “Manager will then repay” 70 to 80 percent of the lease “piece by piece over the next few years, Manager Magazine quotes the hotelier.
Ingrid Hartges, managing director of the German Hotel and Restaurant Association, advised the magazine to seek dialogue with the lessors. After all, the burden on hotels and restaurants is particularly high because lost sales cannot be made up for.
Federal Transport Minister Andreas Scheuer (CSU) called the suspension of rental payments by Adidas, for example, a completely unacceptable message. “I’m very disappointed,” said Scheuer the “picture”. The group made big profits. It is not only the large real estate providers, but also small ones that rent to Adidas as private individuals – and who then remain at their own expense.
Germany’s largest shoe retailer Deichmann announced that he would suspend rental and ancillary costs for his approximately 1,500 branches from April for the duration of the officially ordered forced closings. “This is a preventive measure to maintain the company’s economic ability to act,” said a company spokesman in Essen. The company respects the measures taken to combat the disease. The aim now is to keep the economic consequences of this extreme situation within bounds for everyone involved.
The Swedish fashion chain H&M also stopped rent payments for the 460 branches currently closed in Germany. The company had already informed the landlords about this step last week, a company spokeswoman said. However, H&M hope to soon find a mutually acceptable solution with the landlords.
The sporting goods manufacturer Adidas does a similar thing. “It is true that Adidas, like many other companies, temporarily suspends rent payments as a precaution when our stores are closed. We are in close contact with the landlords concerned, »explained a company spokeswoman on Friday, thereby confirming a report by the« Bild »newspaper.
The landlords’ unilateral approach was met with harsh criticism from landlords. The president of the real estate owners association Haus & Grund Germany, Kai Warnecke, warned with regard to the approach taken by Adidas: «Such behavior should not be allowed to go to school. Then the real estate market is at an end. » He urgently advises every tenant and each landlord to talk to each other and to find friendly solutions.
The provisional freeze is made possible by the rescue package adopted by the Bundestag and Bundesrat to deal with the coronavirus crisis. Among other things, it stipulates that pandemic-related rental suspensions in the period from April to June do not constitute grounds for termination. This period can even be extended. However, the payment obligation basically remains. The obligation to pay is therefore postponed, not canceled.
A spokesman for the Federal Ministry of Justice emphasized that the new regulations do not exempt tenants from their obligation to pay rent. It only “limited the landlords right to terminate tenancies due to arrears if tenants could not pay the rent due to Covid-19.” Landlords therefore have the right to have a judicial review as to whether the relevant tenants have the relevant requirements.
The Deichmann spokesman emphasized that the company expects from the politically responsible persons “that the rental damage resulting from the forced closings will be replaced for the contracting parties involved”.
While Deichmann, Adidas and H&M are aggressively using the new opportunities, other chains are still hesitant. The Westphalian fashion manufacturer Gerry Weber says he is still checking whether he wants to take similar steps. The textile retail chain C&A said it was in contact with its landlords to find solutions. “We are convinced that the effects of this difficult situation for all should not only be shouldered by the retailers, but by everyone involved, and thus also by the landlords and property investors,” said a company spokesman. (With material from dpa)
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