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DOED Seeks Support from Department Stores – Be a Compassionate Landlord by Lowering Rent for Tenants

DOED organizes session with department store reps Taipei City Government’s Department of Economic Development Commissioner Lin Chung-Chieh convened a meeting on March 16, 2020, with department stores to discuss economic measures that can be implemented to combat the outbreak. A total of 17 department store representatives turned out for the meeting, where the commissioner explained measures adopted by the city government (tax deferral, rent reduction, preferential interest rates, and revitalization) and the central government to address the problems caused by the outbreak. The aim of the meeting is also to ascertain the outbreak’s impact on the department store industry, as well as provide relevant solutions for the obstacles encountered by the industry so that the city government can work hand in hand with department stores to overcome the crisis.

After listening to the government’s economic measures in mitigating the outbreak’s impact, the department store representatives raised problems such as “difficulties in purchasing surgical masks and forehead thermometers” and offered the following suggestions: For publicly-owned buildings and lands provided to private developers, the rent should be lowered; the government promotes awareness on making purchases with peace of mind and organizes economy revitalization activities, loosens regulations to facilitate exhibitions, and hosts tourism and shopping marketing campaigns; lowering of house tax, land value tax, amusement tax, and value-added tax; helping department stores to collaborate with delivery service providers and provide promotional offers; reinforcing investments in technical R&D, talent training, environmental improvement, and industry transformation by offering support and subsidies.

Commissioner Lin responded to all the opinions proposed by various department store representatives and instructed relevant authorities to expedite the process. In regard to lowering rent and commission to look after tenants and department store counters, some department stores have already adopted the commission approach based on sales, where zero rent will be charged in the absence of sales. On the other hand, the management fee will be decreased by considering the severity of the outbreak. Other department stores expressed that they will devise ways to lower rent for the department store counters.

During the meeting, the department store representatives mentioned the urgent need to transform their business model in response to the worsening outbreak situation, hoping to tap into new business opportunities via delivery service providers. Taipei City Office of Commerce Director Kao Chen-Yuen used night markets in Taipei City as an example to propose the collective bargaining method and collaborate with delivery service providers to obtain special concessions. A pitch and match meeting was convened at the end to help transform and upgrade department stores and related industries in a bid to revitalize the industry together.

Commissioner Lin appealed to the department stores to tough out the difficult times by lowering rent or management fees to alleviate the cost and cash flow pressure of department store counters and stores. He also appealed to landlords in the shopping districts to become compassionate landlords by voluntarily reducing rent and lowering the burden of tenants. Let us fight the outbreak and revitalize the economy together.