Retailers and catering entrepreneurs will receive zero on the request of property owners to limit or postpone rent increases. Most landlords plan to pass on inflation in its entirety to companies, leaving their raison d’être in danger, industry associations warn.
“There are retailers who have to deal with a rent increase of 6 percent. Entrepreneurs now have to deal with all kinds of price increases, while the profit margin is very thin. If the prices are not passed on to the consumer, then that is the end of the story,” says the director. Eus Peters of the Dutch Retail Council (RND) against NU.nl.
INretail, MKB-Nederland, Koninklijke Horeca Nederland (KHN) and various other sector organizations are arguing for a moderate increase in rental rates, without taking into account energy prices. The various organizations are asking property owners to apply a rent increase of 3.5 percent that is laid down in rental contracts.
“Core inflation does not include products that fluctuate strongly in price, such as energy and foodstuffs. Without this adjustment, almost 15 percent of leases will automatically be adjusted upwards in the coming summer months in line with the inflation figures of the past two months. That can be up to 10 percent higher rents lead for about fifteen thousand rental properties this summer,” according to the branches.
Jan Meerman, general director of INretail, the trade association for fashion, sports and shoe stores, says that many small and medium-sized entrepreneurs have their backs against the wall. “If landlords continue this, chain stores will have to close branches and other entrepreneurs will stop. The general picture is that landlords show no leniency and pass on inflation.”
‘Hospitality companies can no longer escape price increases’
Also in the catering industry there are not many landlords who accommodate entrepreneurs. “Inflation figures are adopted. This involves a small or a large increase. Catering companies can no longer avoid raising prices,” says KHN director Dirk Beljaarts.
Beer brewer Heineken helped entrepreneurs several times during the corona crisis by giving rent discounts. As the owner of 130 properties, the group is directly involved in the rent. The vast majority rent elsewhere or own the property themselves.
“So we are not involved in the rent there,” says a Heineken spokesperson. “Usually, legal indexation clauses are agreed in rental contracts. There is also the legal possibility to change the rent, usually once every five years. The legal criterion for this is the rent of comparable business space on site over the past five years.”
“We depend on what our landlords do for the vast majority of properties. Legal indexation is the starting point for our own properties.”
According to INretail director Meerman, landlords only want to move if the contract is adjusted or extended. “That way they want their change back.”
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