Landlords who insist on charging full rent “as if there is no crisis” will drive restaurants out of business, the catering industry has said in a plea to the government to regulate commercial rents. 

“The majority of landlords continue to charge rents as if there is no crisis, and restaurants are unable to sustain this,” the Association of Catering Establishments argued. 

“Rent will be the main cause of bankruptcy and insolvency for restaurants if it is not regulated.” 

The ACE argued that the solution would be to set fixed rent prices per square metre, and require landlords to charge at that established rate.

Restaurants were allowed to open their doors to diners as of Friday, after two months of coronavirus restrictions during which they were limited to takeaway and delivery services. 

The ACE estimates that restaurant revenues are down to an average of just 10 per cent of normal levels, meaning rent costs “are peaking to at least 50 per cent of turnover”. 

It said that commercial landlords were being short-sighted in insisting on restaurant owners paying full rent during the downturn. That would drive restaurants out of business, the ACE said, and add further downward pressure on rental rates.

The ACE said that it had, in previous months, urged the government to offer tax exemptions to landlords who cut rent rate by 50 per cent. But this would now no longer suffice, it said. 

Instead, the ACE called on the government to regulate rents retrospectively from March 1. 

“Rental rates must be regulated to the granularity of the size and location of an operation, with a price per square metre per annum being established. These parameters have in the past been defined for income tax purposes, indicating that the required data set to effect this regulatory change may already be available,” it said. 

The ACE added that the government should lead by example and waive all rents on government land. 

Government policymakers are currently working on a new financial aid package intended to grease the economy’s wheels as businesses reopen. Speaking on Sunday, Prime Minister Robert Abela gave no indication of what measures the package would include, save for saying that it would seek to encourage people to spend money on local businesses. 

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