Shanghai’s state-backed developers scrap rents in financial lifeline for tenants as lockdown squeezes small businesses

Name: How Covid shut down Shanghai
Uploaded: 2022-05-09T00:30:18.000Z
Duration: 5 min 59 s
Description: How Covid shut down Shanghai

The worst is yet to come and the relief package may not be enough to save his business from collapsing, Pudong restaurant owner Wang said

Some 80,000 small businesses in Shanghai would be exempted from paying rent worth a combined 10 billion yuan (US$1.5 billion), a state official estimated

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Workers in protective suits keep watch on a deserted Shanghai street as businesses came to a standstill during the lockdown. Photo: Reuters

Daniel RenandAnn Cao

Published: 8:30am, 9 May 2022Updated: 1:10pm, 31 May 2022

China’s state-owned commercial landlords in Shanghai will exempt their tenants from rents for up to six months, handing a crucial financial lifeline to local businesses crushed by more than a month of citywide lockdown.

Lujiazui Group, a developer of shopping malls and office buildings in Pudong district, has offered to waive six months of rents for its clients, while the city’s investment arm Shanghai Land (Group) said it would forego three months of payments for small business owners and double for those who incurred losses during the shutdown.

Shanghai Tower, the mainland’s tallest skyscraper located in the Lujiazui finance and trade zone, is assessing the status of its tenants including restaurants and service providers, before drawing up a detailed relief plan to mitigate their financial burden, the property owner said on Sunday.

Shoppers seen along the near-empty Nanjing Road shopping belt in late March, just before the entire Shanghai city came under total lockdown. Photo: Bloomberg

The support follows a clarion call by the central government and city authorities to rescue embattled small businesses and save jobs in the financial hub. The city of 25 million residents, the new epicentre of the pandemic, has been in lockdown for 37 days under China’s “dynamic zero” Covid policy to overcome the Omicron outbreak.

“Thousands of small firms are on the verge of collapse due to the antivirus measures and the relief package could be a cure for many restaurants, groceries and tea-houses,” said Eric Han, senior manager at business advisory firm Suolei in Shanghai. “The ultimate goal is to encourage the battered small firms to keep their employees, hence ensure economic and social stability.”

Some 80,000 small businesses in Shanghai would be exempted from paying rent worth a combined 10 billion yuan (US$1.5 billion) to their state-owned landlords, Bai Tinghui, chief of the Shanghai State-owned Assets Supervision and Administration Commission, estimated last month.

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How Covid shut down Shanghai