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Hong Kong’s rent deferral plan will help small businesses stay afloat if UK, Singapore models are any guide, say property experts
- The plan shares similarities with schemes in Singapore and Britain aimed at helping commercial tenants survive the pandemic
- Singapore’s moratorium had ‘prevented disorderly systemic defaults by SMEs, said one analyst
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Hong Kong’s planned moratorium on commercial rents is likely to be effective in helping small businesses survive the pandemic if similar relief measures in the UK and Singapore are any guide, according to property experts.
Small and medium-sized enterprises (SMEs) in certain sectors will be allowed to defer their rent payments by up to six months, Financial Secretary Paul Chan Mo-po said in his budget briefing on Wednesday.
The move, which will be backed by legislation, shares similarities with schemes in Singapore and Britain aimed at securing the long-term viability of commercial tenants, said Maggie Hu, assistant professor of real estate and finance at the Chinese University of Hong Kong.
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“Without the rental moratoriums, a much higher businesses closure rate would have been observed in the past two years,” she said.
Singapore allowed businesses and individuals to defer certain contractual obligations such as rent in 2020. Last year, it went further and introduced an outright waiver on rents.
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Breaking down Hong Kong's dynamic zero Covid-19 strategy
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The conditions appeared to be somewhat stricter than Hong Kong’s, requiring some proof of inability to pay rent.
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