There is a need for programmes where landlords are not burdened by loan repayments especially when they are expected to give rental rebates to their tenants, Chan Ai Cheng, President of the Malaysian Institute of Estate Agents (MIEA), tells Business Today.
Chan says while the wage subsidy initiative (PSU) introduced under PRIHATIN helped businesses which lead to its extension, PSU 4.0, more incentives can be given to help businesses with rental and staffing, as these are the heaviest cost for any business operation.
For a business to sustain itself through challenging times, any assistance in these categories will be significant when it comes to rental incentives, she stresses.
She adds that during the pandemic, many landlords have been asked to constantly give discounts on rentals for the sustainability of the tenant’s business, but she adds that this is also a challenge as landlords have loan commitments on their properties which need to be repaid to the bank as well.
“Hence the dilemma. More often than not we hold the view that landlords are in better financial standing than tenants but this may not be the case in reality. Often times the loan repayments can be higher than the rental and hence the strain on landlords,” she explains to drive home her point on how the government can help with additional rental incentives.
Commenting on the commercial property outlook now that Phase 3 is in place, Chan says that the rise in the current business activity is very important and bodes well for the commercial property sector.
“Commercial properties are very much dependent on business vibrancy. When businesses do well, commercial properties do well. The reverse is also true. With more and more businesses allowed to operate, dine ins albeit only for fully vaccinated persons permitted, daily infection rates coming down, confidence increases which generates movements in the market and spending,” she says.
