EMEA Government Responses in the Real Estate Market

Colliers International’ latest report “COVID-19 European Real Estate Markets Government Response” presents information on how the national governments across EMEA are supporting businesses with specific reference to commercial and residential rent/mortgage payments, business loans and grants, taxation allowances and business rates and household/individuals salaries.

Concerning direct government support for occupiers and/or landlords with their commercial rents/mortgages, the government in Italy, Austria and Greece has provided some support to the most impacted retail tenants in the form of rent subsidies and tax credits. In Russia, only government-owned property is to benefit from support with regards to commercial leases and mortgages. In the UAE, specific packages have been tailored to tenants needs in specific Dubai free zones, while the Abu Dhabi government has provided a 20% rebate on rents to most the most impacted retail, F&B, tourism and entertainment sectors.

In France, the UK and Germany new COVID laws have been passed to prevent any eviction of tenants for non-payment of rent during the emergency, lockdown period. Similar policies are in place in Turkey and Hungary. In the UK and Germany this has also been extended to the residential sector. Additionally, the UK government is supporting banks to allow three-month residential mortgage payment deferrals; a similar, selective approach has been adopted in Finland and Russia. Greece is supporting employees in affected companies, with a corresponding 40% reduction of their residential rent for two months.

Perhaps the most important government support and intervention has been with regard to supporting households/individual incomes in the face of such a stark slowdown in economic activity. The governments most supporting businesses through salary support for furloughed workers include the Dutch, UK, Austrian, Latvian, German and Nordic governments, with the Dutch proving the most generous by supporting up to 90% of salaries. The UK and Austria are not far behind by offering up to 80%, and this include support for the self-employed. Germany has a well-established system of support where the government will pay 67% of salaries including payroll taxes for 12 months, with three-month payroll grants of €15,000 available to the self-employed and small companies. The Nordics are close behind, providing immediate unemployment benefit support, or specific new short-term layoff support worth around 65% of gross salaries.