Bob Jones on why commercial rent subsidies are a bad idea

Bob Jones writes:

There’s a clamour from retailers for government (you and me) to subsidise their shop rentals.

Justice Minister Andrew Little said, “We’ve heard the calls to subsidise rent or to freeze rents. However, both of these approaches would have meant commercial property owners would have had their income protected at a time when no-one else enjoys that privilege”.

That of course is true, however, Andrew should note no lessor is asking him to do that. Instead, I suspect I’d speak for most when I say they’d rather the government stayed out of interfering with clear contractual relationships.

Sir Bob is arguing against something that would in fact benefit him.

He points out landlords regularly deal with tenants who have problems paying:

My company owns the most CBD shops in Wellington because we own the most prime CBD office buildings.

Again, as with shopping centres there are constant situations arising in which retailers get into difficulty.

If it’s a one-off financial hit for some reason or other, we will suspend rent for say 3 months then spread its repayment, interest free, in small supplementary payments thereafter.

That in fact is precisely what we offered most of them long before the lockdown arose but when it was evident things were going to get tough.

So most landlords are already showing flexibility with rent.