Rent reduction is more effective than emergency money
Hong Kong’s economy has entered a technical recession. Yesterday, the Secretary for Financial Services and the Treasury, Liu Yixiang, said that the annual economic growth target of zero to one percent is extremely difficult. The economy entered a cold winter, and small businesses faced a big impact. The family fund of Hong Kong’s richest man, Li Ka-shing, announced the issuance of $200 million to support small and medium-sized restaurants. The eligible merchants could each receive $60,000. Whether this emergency money can help the small and medium-sized restaurants to respond to emergency is difficult to judge for the time being, but the emergency can only temporarily stop coughing. The real serious problem facing SMEs today is that major real estate developers should reduce rents.
How much does it cost for a small and medium-sized enterprise restaurant that faces bankruptcy? Can I pay for a month or even less than a month’s rent? Can I pay the salary of three to four most basic employees? Can I pay two months of water and electricity and management fees? With this emergency money, how can we survive the one-month financial crisis? It’s been a month, but less than two months. Is it better to let the store close down early?
In the past four months, SME shops, including restaurants and retail outlets, especially those on the route of large-scale demonstrations and violent demonstrations, often have to close early and even close the day to avoid innocent disasters. In shops in Central, Admiralty, Wan Chai, Causeway Bay, Tsim Sha Tsui, Jordan, Yau Ma Tei and Mong Kok, most shops are rented for $60,000 a month. Is 60,000 yuan not a drop in the bucket? A better option to really help small and medium-sized shops to tide over the difficulties is that the big owners are willing to reduce rents and tide over the difficulties with the merchants.
Until yesterday, the major real estate developers’ demand for rent reduction for many merchants was only dealt with individually and was not considered in full. In the face of a sharp decline in business, but the rent is locked at a high level and there is no downward adjustment, the business pressure of the merchants will continue to increase in the next few months. Li Ka-shing took the emergency money with his hair. In fact, he could take a step forward or even take a few steps to lead a comprehensive range of rent reduction measures in his shopping malls and properties to show other real estate developers effective measures that truly reflect the difficulties of the merchants.
In the past few years, the real estate sector has made huge profits from the rising property prices. The rental income has also risen. Today, if we can reduce rents and give back to the society, we can help small and medium-sized businesses to tide over economic difficulties and avoid the nightmare of closing the business. It is a more practical measure to support the economy and protect employment. Shop renting is one of the biggest operating expenses for small and medium-sized stores. If a shop is closed due to poor economy, it is not easy to rent out the relevant shops. Real estate developers and their reception of a large number of vacant shops have no rent to collect, it is better to give people the convenience of rent reduction to help the owner to maintain the living space, this is the real win-win practice!