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A shopping centre in Beijing on Tuesday. The Wuhan coronavirus could hit footfall at malls for the whole of the first quarter. Photo: AP

Chinese mall landlords offer rent-free periods to merchants as footfall decreases amid Wuhan coronavirus outbreak

  • Rent-free month for merchants in at least 280 of Dalian Wanda’s shopping malls
  • About 80 property developers donate more than 1.2 billion yuan to fight against coronavirus

Mainland Chinese mall landlords have moved to relieve the pressure on stores and restaurants brought on by the Wuhan coronavirus outbreak, by cutting rents and offering zero-rent periods. They have also donated money to non-profit groups and hospitals in Hubei province, the epicentre of the new epidemic.

Beijing-based Dalian Wanda Group has exempted all merchants at its Wanda Plazas from paying rent and property management fees for a month, from January 24 to February 25. According to mainland media, this could cost Wanda 3 billion yuan (US$432 million). The company, China’s top commercial property developer, with revenue worth 26.45 billion yuan in the first half of 2019, owns at least 323 plazas, according to the website of Dalian Wanda Commercial Management Group, its commercial property subsidiary.

“Property companies cutting rents shows they are being responsible to society. It’s more of a short-term issue. [Rent cuts] will not have a big impact on these companies’ revenue or earnings,” said Lin Bo, general manager of research at Shanghai-based property data and analysis provider China Real Estate Information Corp (CRIC).

State-owned developer Poly Commercial Real Estate said it would reduce rents for merchants at its 22 shopping malls from the first to the sixth day of the lunar new year. The Guangzhou-based company’s parent, China Poly Group, was ranked 242 among the world’s 500 largest companies with US$46.2 billion in revenue last year.

Shenzhen-based Galaxy Commercial, which operates the Coco City and Coco Park malls in the city, said it would halve rents at its 15 shopping centres for the first fifteen days of the lunar new year. Redsun Properties, which focuses on developing property projects in eastern China, and Shengzhen-based Excellence Group with total assets worth 190 billion yuan, also said they would halve rents for the first seven days of the lunar new year for certain shopping centres. Meanwhile, Shanghai-based commercial property developer Powerlong Group and Yuzhou Group said they would halve rents for the first nine days of the lunar new year.

Lin said there was a possibility the coronavirus would not be contained in the short-run, which would hit footfall at these properties for the whole of the first quarter. “Maybe property companies need to continue to cut rents next month as well,” he added.


About 80 property developers have also donated more than 1.2 billion yuan for the battle against the coronavirus in Hubei, according to mainland media. More than 130 people have now died from the outbreak, surpassing the number of deaths from the 2003 severe acute respiratory syndrome (Sars) epidemic, and 6,000 cases of infection have been confirmed, China’s National Health Commission said on Wednesday.

“The developers are answering the summons of the government. [The rent cuts] will not have a big impact on profits of these developers, as the time frame for the rent cut is relatively short,” said Yang Hongxu, deputy head of E-house China R&D Institute. “The bigger impact is likely to be on cash flow, as people are unlikely to purchase houses in times when sales offices of property projects are prohibited from opening.”

Matthew Chow, director at S&P Global Ratings, however, said the rent concessions will not affect companies’ cash flow or credit standing in a very material way. “The outbreak will no doubt affect retail sales and footfall of commercial properties. However, contracted sales still matter a lot more for these companies,” he said.

“Office rents should be the least impacted, while shopping and furniture mall rentals could be more susceptible. The key, however, is how long the current situation will linger and hamper rents in a more meaningful way,” Chow said.