Negotiations underway on settlement about rents
KUWAIT CITY, Aug 30: With the lifting of the partial ban that was imposed on the country for a period of five months, life has returned to normal now. By this reason, the Kuwaiti banks and commercial complexes, alongside other activities have announced returning to the previous schedules operated before the novel coronavirus crisis.
The commercial complexes last week announced their return to the normal schedule, and thereby, opening their doors from 10am until 10pm after a long period of total and partial closure, which affected the nature and activities of the complexes, causing huge losses. Despite the return to normal life, the joy of the commercial complexes on the safety of returning was truncated, in light of the remarkable evacuations witnessed at several complexes.
With the initial tour of the complexes, it can be said that the rate of evacuation in the commercial complexes and towers is no less than 10 percent, according to an official at one of the complexes, reports Al-Anba daily . This may increase further in the next few weeks, as negotiations are currently underway between some tenants and the owners of commercial complexes to reach a satisfactory settlement about rents they owed in the period when commercial activities were suspended. Based on the results of this settlement, the picture will be clarified as regards the ability of those companies to continue or not.
In this context, reliable real estate sources affirmed that the commercial sector will suffer greatly in the next stage, whether at the level of the administrative offices or commercial stores. The coronavirus crisis has seriously affected the economic sectors inside and outside Kuwait and pushed many business owners to think about reducing their workers or administrative and commercial office spaces, in a step aimed at reducing monthly costs to save what can be saved.
Sources noted those monitoring the activities of commercial sector noticed the transfer of the headquarters of many companies from luxury towers to smaller complexes and towers, in light of the weak economic activity, high cost of living and the increase in inflation at all levels. The same sources believe that the consequences of the new coronavirus pandemic on the Kuwaiti economy in general and the real estate sector in particular will not end soon, “and even if the pandemic ends and an effective vaccine is discovered during the year, the negative effects on various economic sectors will need years to be overcome”.
The retail sector, small and medium companies, tourism and travel sector, and many other sectors have been hit hard, as some of them have gone bankrupt and others defaulted at a rate of up to 90 percent without realistic government solutions to save them.
They added the Kuwaiti market will continue to suffer in the foreseeable future, even if life returns to normal, especially with the change in the demographics on which the Kuwaiti market relied heavily, as the segment of expatriates that makes up three quarters of the Kuwaiti market are now threatened after a substantial percentage of them either lost their jobs or experienced a decline in their monthly income. Therefore, the remarkable change in demographics has already begun to have an immediate impact on the movement of economic activities in the retail markets, restaurants and other activities that were heavily dependent on them.