China is increasingly decoupling from the global economy

Beijing, Berlin, Düsseldorf Mostly once a year, China’s head of state and party leader Xi Jinping gives a speech to high-ranking ministry and provincial leaders at the Central University of the Communist Party, which sets the course for the year. But this time it had a special meaning. Because the five-year plan is currently being finalized, which should set the course for the economy in the People’s Republic from March to 2025.

Foreign company representatives may not have liked what Xi said behind closed doors earlier this week. “The most essential feature of building a new development pattern is to achieve a high level of self-sufficiency and self-improvement,” says Xi. ”

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In these professions, earnings and employment opportunities are high

Geriatric nurses

High appreciation, relatively low pay.

(Photo: imago / photothek)

Berlin At the beginning of the corona crisis, they received applause from the balconies – the nurse in the intensive care unit, the cashier in the supermarket, the geriatric nurse or the parcel delivery. But increased esteem and social prestige do not necessarily pay off in hard cash.

Only a few members of the above-mentioned professional groups would describe their job as particularly lucrative – perhaps with the exception of the specialist nurse, who after all has an average gross monthly wage of almost 4,000 euros with additional training. The geriatric nurse has a thousand less in her pocket at the end of the month, employees at post and delivery services earn an average of 2623 euros gross, and the cashier comes in last with 2214 euros.

A shortage of skilled workers, which is reflected in very good employment opportunities, is not necessarily a guarantee for high wages, as the example of qualified care for the elderly shows. For every 100 vacancies in the profession, there are currently only twelve unemployed – so providers have a hard time finding staff. But the financial difficulties of the long-term care insurance companies narrow the scope.

And so, geriatric nurses with training earn considerably less than, for example, bank clerks or metalworkers, although these are much less sought after. Relationships like this can be read from an interactive graphic created by the Institut der deutschen Wirtschaft (IW) in Cologne.

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Investment deal with China is on the home stretch

China and the EU

The EU and China intend to announce their agreement this year.

(Photo: Reuters)

Brussels, Berlin After almost seven years of negotiations, the EU and China have agreed on the text of an investment agreement, according to Handelsblatt information. “A political agreement is possible before the end of the year,” said a confidante of Commission President Ursula von der Leyen the Handelsblatt. The agreement is expected to be announced by the EU leaders this Wednesday. Commission vice Valdis Dombrovskis had achieved the breakthrough in talks with Beijing.

The Comprehensive Agreement on Investment (CAI) is intended to create improved market access for European companies in China – and thus new business opportunities in the world’s second largest economy.

The automotive and telecommunications industries, among others, benefit from this, as do banks and insurance companies as well as investors from the health sector. “The result of the negotiations is the most ambitious result that China has ever agreed with a third country,” said the commission.

“Better competitive conditions in the state-run China are of great benefit to German, European and Chinese companies,” said Managing Director Joachim Lang from the Federation of German Industries (BDI) to the Handelsblatt. However, the ability to enforce the new rights is crucial. It will probably take several months for the agreement to enter into force. Among other things, the European Parliament still has to agree.

EU Commission Vice Valdis Dombrovskis had cleared the last obstacles out of the way with China’s Vice Prime Minister Liu He. A spokesman for the Chinese Foreign Ministry spoke of “great progress”. On Monday, the EU ambassadors gave the green light for the agreement. “The work on the technical level has been completed,” said MEP Bernd Lange (SPD), chairman of the trade committee.

According to information from the Commission, the decisive factor in the agreement between the EU and China was that Beijing made commitments in the area of ​​climate protection, including the implementation of the Paris Agreement.

There has also been progress on the subject of forced labor. China has agreed to undertake “continued and sustained efforts” to promote the ratification of the fundamental International Labor Organization (ILO) convention on forced labor.

graphic

However, there was already criticism of such compromises on Tuesday: “That Europe is satisfied with such a formulation, when the Chinese leadership has just demonstrated in Hong Kong that international agreements are worth nothing to them, is a strategic own goal,” said for example Thorsten Benner from the think tank Global Public Policy in Berlin. Beijing’s concessions in the area of ​​labor rights will also be central to the required approval of the EU Parliament.

The agreement opens up new market access for EU companies, for example for electric and hybrid cars, cloud and financial services, and for investments in private hospitals in cities with more than ten million inhabitants. The agreement aims to ensure that there is no discrimination against EU companies by Chinese state-owned companies. In addition, China will be prohibited from linking the approval of investments and other benefits to the transfer of technology.

The President of the EU Chamber of Commerce in Beijing, Jörg Wuttke, spoke of a “robust agreement” that one could live with: “There is never a perfect agreement.”

That is why it was good that the German Council Presidency put so much pressure on to get a deal. And MEP Lange also praised: “The progress that has been made will improve investment opportunities, level the playing field and, above all, create more legal certainty.”

“As the first actor, EU brings China to concessions”

Michael Hüther, Director of the Institut der Deutschen Wirtschaft (IW), on the other hand, warns: “Berlin and Brussels must not be fobbed off with commitments that do not change the actual business practices.” If this change succeeds, the investment agreement would send an important signal against them many protectionist tendencies in world politics.

In addition to the central agreement with Great Britain on a follow-up agreement after the final exit from the EU, the investment agreement could mean a second breakthrough at the end of the year. “The EU is the first actor in the world that has brought China to concessions on questions of social standards,” said BDI General Manager Lang. This is a decisive step towards a “Union that is also closed on investment issues and is a strong player in shaping global rules”.

Nevertheless, it is clear on the European side: The agreement is only one building block in relations with China. CAI does not offer comprehensive investment protection outside of the existing bilateral agreements. European companies can also continue to be excluded from public tenders – this point is also not covered by the investment agreement.

graphic

Many business representatives, economists and politicians are calling for it to be further developed in close coordination with the new US administration under Joe Biden.

Beijing’s concessions on market access and on the subject of distortion of competition are of great economic importance, especially from a German perspective. Germany alone exported goods worth almost 100 billion euros to the People’s Republic this year up to and including November.

China ranks third among the largest German export destinations, just behind the USA and France. China is the EU’s most important trading partner after the USA. While trade with the US has declined significantly over the past 19 years, China’s share tripled in the same period to almost 16 percent of total EU trade.

Among other things, the conclusion of the “Regional, Comprehensive Economic Partnership” (RCEP) between 14 Asia-Pacific states, including China, gave momentum to the negotiations between the EU and Beijing. “With the conclusion of the RCEP, the USA and the EU are under pressure,” said Veronika Grimm.

Both sides have been negotiating since January 2014. Even after the political agreement, it will likely take a long time for the agreement to come into force. The translation and legal examination of the text alone should take six months to a year. The agreement then has to be discussed and adopted by the European Parliament.

EU parliamentarians criticize the haste in talks for the final deal

Above all, the sustainability chapter and employee rights are likely to be central. “The ratification of ILO core labor standards, especially against forced labor, must be binding and linked to specific steps,” calls for MEP Lange.

In Brussels, MEPs criticize the rush in reaching an agreement on the investment agreement. “For geostrategic reasons, I think it is unwise, now, shortly before Joe Biden becomes president, to implement the investment pact with China quickly,” said MEP Reinhard Bütikofer (Greens), chairman of the EU Parliament’s China delegation. “I thought we wanted to work on leaving the time of going it alone behind us.”

China will remain a system rival even after an investment agreement, said Bütikofer. He announced a detailed examination of the contract text. Non-binding promises on workers’ rights were not enough for approval: “I use our free trade agreement with Vietnam as a benchmark.” There, a step-by-step plan was agreed for the ratification of the ILO standards.

The relationship between the EU and China is anything but relaxed. Shortly before Christmas, the European Parliament brought sanctions against China because of the human rights violations there. Beijing’s attack on Hong Kong’s autonomy in particular had aroused outrage and criticism not only in the European Parliament but also in numerous member states.

More: The agreement could drive a wedge between Europe and the US.

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The fatal consequences of the rent cap

Inner courtyard in Berlin-Mitte

Many Berlin landlords have to lower their rents first.

(Foto: picture alliance / imageBROKER)

Berlin, Frankfurt, Düsseldorf Mail from the landlord usually causes frustration in German households. This is not the case with the K. family from Berlin: The owner of their four-room apartment in the center of the capital announced in November that he was lowering the net rent – by at least 230 euros a month.

The K. family is only one of an estimated 340,000 tenant households in Berlin that have received similar letters. The Dax group Deutsche Wohnen sent 30,000 letters with rent cuts alone. Most of the time it was about double-digit euro amounts, said a company spokeswoman.

Vonovia from Bochum, number one among German apartment rental companies and also a member of the leading German share index, has lowered the rent for around a third of its 42,430 apartments in the Berlin region. Per square meter, the range of cuts varies between a few cents and several euros per month, it said.

The reason for the unexpected post: The red-red-green state government had decided that owners of apartments that were built before 2014 must lower their rents if they are more than 20 percent above the upper limits set by the Senate. Every Berliner can easily check for himself whether this is the case: a specially developed “rent cap calculator” on the Internet that is aggressively promoted by the Senate makes it possible.

The obligation to reduce rents, which has been in force since November 23, is the second strike in the “Law on Rent Limitation in Housing in Berlin”, which is limited to five years. The first stage came into force in February: rents for around one and a half million Berlin apartments have since been frozen at the June 2019 level.

Several lawsuits at the Federal Constitutional Court

The law is a novelty in German tenancy law – and highly controversial. The opponents see it as the temporary climax of an increasing Berlin regulatory mania. Not only investors and lobbyists criticize the new rules.

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This is how much money you will save in 2021

Start of the new tax year

Most citizens can look forward to significant tax relief.

(Photo: obs)

Berlin For a long time, relieving taxpayers was not exactly one of the political priorities – with a lot of luck, the savings would be enough for a cappuccino. But on January 1, 2021, tax breaks will come into force that really deserve this name.

Citizens will be relieved of around twelve billion euros in the new year. By the year 2024, the tax relief will even amount to well over 40 billion euros.

With these amounts, something sticks noticeably with the individual taxpayer. In the coming year, German citizens can look forward to significantly more net than gross.

A family with two children saves a maximum of up to 2500 euros a year. In the case of low and average earners, the relief is not so high in absolute terms, but measured against their income, they benefit more than average.

The Handelsblatt shows which taxpayers benefit how much with which income. And where the state would have to further reduce taxes after the federal elections in order to eliminate injustices in the tax system and stimulate growth.

The federal government will relieve taxpayers in three ways in 2021:

  • First, most income taxpayers will no longer have the solidarity surcharge from 2021. A single employee up to a taxable income of almost 62,000 euros no longer has to pay any solos. Only the ten percent of top earners have to continue to pay part or all of the solos.
  • Second, the federal government is increasing child benefit by 15 euros per child. For the first two children, it increases from 204 to 219 euros, an increase of 7.4 percent. The child tax allowance will be increased by the same percentage to 8388 euros.
  • Third, the federal government is compensating for the so-called cold progression. Behind this is the effect that employees whose salary increases in step with the inflation rate and thus only remains constant in real terms are still taxed higher because the tax rate rises with increasing income.

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Insolvency record low: 4500 zombie companies because of corona aid?

Company bankruptcies

The number of corporate insolvencies will drop to a new low in the 2020 corona year.

(Photo: dpa)

Berlin The corona crisis puts many companies in dire straits. According to the survey, every second company in individual industries is experiencing payment difficulties because the business is closed due to the lockdown and customers are absent.

On the other hand, there is an astonishing effect: According to a study by the Institut der Deutschen Wirtschaft (IW), which is available to the Handelsblatt, the number of corporate insolvencies will likely drop to a new low in 2020.

According to IW calculations, only a little over 17,000 companies will go bankrupt this year. The number of corporate insolvencies will therefore fall by around nine percent compared to 2019 to a new low of 17,060 – despite the sharp economic downturn of five to six percent this year.

There should actually be a lot more company bankruptcies: “The severe economic slump and the lockdowns in spring and at the end of the year, however, meant that a sharp increase in the number of insolvencies of around 15 percent could be expected,” the study says. In mathematical terms, this will result in around 4,500 fewer bankruptcies at the end of 2020 than expected – “possibly zombie companies,” writes the IW.

In part, the surprisingly low number of bankruptcies can be traced back to the federal government’s rescue policy. The federal and state governments helped companies with a variety of financial aids.

Above all, however, the federal government suspended the obligation to file for insolvency for companies until the end of September during the crisis. For some companies that are over-indebted but not yet insolvent, the suspension continues until the end of the year.

But the interesting thing is: Even since the obligation to file for insolvency has been in effect again for most companies, leading indicators have not signaled any increase in the number of insolvencies. It hasn’t risen much since October.

Next year there is a threat of an increase in company bankruptcies

There could be a catch-up effect in the coming year and the total number of insolvencies according to IW will be 23,250. This would be 36 percent more than in 2020, but still less than in all years between 1996 and 2014.

The IW has two possible explanations for the surprisingly low number of bankruptcies. For example, the state aid to corona could have led to overcompensation, so that fewer companies than in 2019 are at risk. But this seems unlikely.

graphic

The second explanation: The 4,500 companies that unexpectedly did not go bankrupt are zombie companies that are not economically viable but still exist.

Zombie companies always exist, even without a crisis. The Creditreform business information database estimated the number of “zombie companies” in Germany at 550,000 in August. The federal government’s crisis policy could, however, lead to a drastic increase, warned Creditreform. Should the federal government suspend the obligation to file for insolvency, as discussed at the time, by the end of March 2021, the number of zombie companies would rise to 800,000.

In particular, the extension of short-time working until the end of 2021 into next year led to a debate among economists: Is the state keeping too many undead companies alive through its courageous intervention in the crisis? That would delay a necessary structural change in the economy.

Zombie companies throttle growth

Zombie companies prevent “creative destruction” in the sense of the old master economist Joseph Schumpeter. The self-cleaning process of the economy no longer takes place. Experts at Commerzbank criticized the “natural selection of competition” being undermined.

Scarce resources would be misused because these funds would sustain zombie companies and thus misdirect workers who could be used more productively elsewhere. The result: the more zombie companies there are, the less growth an economy will have. This is exactly what one of the economists’ camp warns of. Politicians should therefore not overdo it with state intervention even in the crisis.

However, there are also many economists who cannot do anything with this argument in the corona crisis. For example, IW boss Michael Hüther argues that the corona crisis is not a clean-up crisis.

The crisis did not break out because, as it did before the 2008 financial crisis, the economy had pumped up speculative bubbles that now have to be corrected by a recession. But by a virus for which nobody in the economy is to blame. Before the financial crisis there were more zombie companies than today, wrote the Bundesbank recently.

In addition, politicians have ordered the shops to be closed. This is one of the reasons why the state must help the economy as best it can through the crisis, believe economists like Hüther, in agreement with the federal government.

The logic behind it: It is true that it causes economic costs if the state temporarily rescues companies that would not have been able to survive even without the corona crisis. But if healthy companies go bankrupt in the corona crisis because they don’t get any help, the overall economic damage to the economy is greater.

More: Bankruptcy administrators warn of zombie companies

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Broker fees & commission are newly regulated

Viewing of an apartment in Berlin

The remuneration of the broker can be a high amount that should be considered when buying a home.

(Photo: imago / photothek)

Frankfurt In the past few weeks, many a property seller has been particularly pleased to be able to buy a house or apartment. Because in a few days a new law will come into force that is likely to change the real estate market significantly and permanently – and that affects both sellers, buyers and brokers.

From December 23, the distribution of brokerage fees for real estate purchases will be reorganized. In the short term, this is likely to mean that sellers have to pay the brokerage commission themselves and can no longer pass it on one-to-one. It should be cheaper for buyers. In the long term, the law is likely to have even more far-reaching consequences.

Up to now there has been no uniform regulation in which ratio the buyer and seller of a property share the costs for the broker. The remuneration can be a considerable amount: Depending on the federal state, the broker’s commission was between 3.57 percent and 7.14 percent of the purchase price.

And even in areas where the broker’s commission was shared between seller and buyer, the property owner was often able to pass his portion of the commission on to the buyer – that’s how great the demand for property is. “Some brokers have even advertised very openly that the commission is borne by the buyer for them,” reports real estate expert Michael Voigtländer from the Institute for the German Economy (IW).

The buyer of a property not only had to pay the price for the new home, but also the ancillary acquisition costs – and most property buyers cannot pay these with a loan, but have to shell out their equity.

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Broker fees & commission are newly regulated

Viewing of an apartment in Berlin

The remuneration of the broker can be a high amount that should be considered when buying a home.

(Photo: imago / photothek)

Frankfurt In the past few weeks, many a property seller has been particularly pleased to be able to buy a house or apartment. Because in a few days a new law will come into force that is likely to change the real estate market significantly and permanently – and that affects both sellers, buyers and brokers.

From December 23, the distribution of brokerage fees for real estate purchases will be reorganized. In the short term, this is likely to mean that sellers have to pay the brokerage commission themselves and can no longer pass it on one-to-one. It should be cheaper for buyers. In the long term, the law is likely to have even more far-reaching consequences.

Up to now there has been no uniform regulation in which ratio the buyer and seller of a property share the costs for the broker. The remuneration can be a considerable amount: Depending on the federal state, the broker’s commission was between 3.57 percent and 7.14 percent of the purchase price.

And even in areas where the broker’s commission was shared between seller and buyer, the property owner was often able to pass his portion of the commission on to the buyer – that’s how great the demand for property is. “Some brokers have even advertised very openly that the commission is borne by the buyer for them,” reports real estate expert Michael Voigtländer from the Institute for the German Economy (IW).

The buyer of a property not only had to pay the price for the new home, but also the ancillary acquisition costs – and most property buyers cannot pay these with a loan, but have to shell out their equity.

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EU should join transpacific free trade area CPTPP

Containerterminal in China

By joining the CPTPP, the EU would expand its economic and political influence in the Asia-Pacific region, argue the IW researchers.

(Photo: dpa)

Beijing, Brussels, Tokyo The conclusion of the Asian free trade agreement RCEP made many in Europe sit up and take notice. After all, the agreement encompasses 2.2 billion people, 30 percent of global economic output and the most economically dynamic region in the world.

The EU also wants to increase its influence in the region. In Brussels and Strasbourg, accession to the transpacific free trade area CPTPP is therefore repeatedly discussed as an alternative to RCEP. Researchers at the employer-related Institute of the German Economy (IW) are now calling for such a step. “A possibly attractive way could be a joint accession with the USA and the UK to an enlarged CPTPP,” says a study by the IW, which the Handelsblatt has received in advance.

By joining the CPTPP, the EU would expand its economic and political influence in the Asia-Pacific region, argue the IW researchers. CPTPP appears to them to be more attractive than RCEP because CPTPP is significantly more demanding when it comes to important standards.

The authors of the study Jürgen Matthes and Galina Kolev write that CPTPP will also have to be expanded in the course of accession in negotiations with the previous members, for example with regard to the naming and, above all, with regard to climate protection and competition rules.

The transpacific free trade zone CPTPP was originally promoted by the US as a counterweight to China’s growing economic influence in the region – but came about two years ago after the withdrawal of the Americans without US involvement. The CPTPP agreement has shrunk to eleven states since the US withdrew.

China is basically open to agreements

With a view to China, the IW study sees the transpacific agreement as an opportunity to induce the world’s second largest economy to adhere to international standards.

The agreement is basically open to the People’s Republic, it says, “but only if the Chinese government adapts to market-based standards and declares that it is ready to pursue sustainability goals”. Such an expanded CPTPP may increase the pressure on China to agree to such standards in the WTO and to abandon its blockade of new rules, the authors said.

Together with the USA, the EU-27 and the United Kingdom, the new CPTPP, as a plurilateral agreement with a share of around 60 percent of global GDP, would bundle an “immense economic power”, argue the IW authors. Accession would send a strong signal of liberalization.

At the request of the Handelsblatt, Tokyo was open to the EU joining the agreement. Japan will chair the CPTPP next year. The agreement is open to all economies that are ready to meet the high standards, it said in a statement by the Japanese Foreign Ministry.

In Brussels, however, people have so far been skeptical. The transpacific free trade area CPTPP is not an issue for Brussels for fundamental reasons. “While we welcome all initiatives that promote rules-based trade, there are important differences between multilateral trade agreements such as CPTPP or RCEP and the EU’s approach, which aims at comprehensive and ambitious trade and investment agreements,” said a commission spokeswoman when asked by the Handelsblatt.

“EU trade policy is determined by its own interests”

Brussels is also unimpressed by the possibility of the UK joining the CPTPP. Great Britain has set itself the goal of applying for admission to the transpacific free trade area CPTPP in the coming year.

“Once the transition period is over, the UK will be able to conclude trade deals with third countries and it will be up to the UK to decide whether to apply to join the CPTPP,” said a Commission spokeswoman. “The EU’s trade policy is determined by the EU’s own interests-“

MEP Reinhard Bütikofer takes a pragmatic approach. “In terms of trade policy, we are dealing with a variable geometry,” said the chairman of the European Parliament’s China delegation to the Handelsblatt.

RCEP

The agreement made many in Europe sit up and take notice.

(Photo: AP)

RCEP and CPTPP are not alternatives, but rather overlapping elements. “From an EU perspective, there are more options than a simple choice between RCEP and CPTPP,” said Bütikofer. The Green politician advocates pursuing the old idea and concluding a regional free trade agreement with the Asean community.

CPTPP and RCEP are agreements that are not up to date in terms of sustainability and occupational safety standards. “The EU cannot simply join in – without fighting to improve standards,” said the trade expert.

Too different interests?

Bernd Lange (SPD), Chairman of the Trade Committee in the European Parliament, referred to the existing trade agreements or those currently being negotiated with Asian countries. These are comprehensive and geared towards the offensive and defensive interests of the EU.

“I think the EU network is going under a little because it is not grouped under one big roof. That makes CPTPP better, ”said Lange. The influential EU politician is against joining the CPTPP. “Giving up our agreements in order to join a new network of bilateral agreements is not a sensible approach in my eyes,” Lange told Handelsblatt.

Even the European People’s Party (EPP), the largest political group in the European Parliament, does not see the CPTPP as an alternative for the EU: “I do not consider accession to be desirable: the interests are too diverse to be able to and want to join this negotiated agreement “, Said Daniel Caspary, head of the CDU / CSU group in the European Parliament, the Handelsblatt. He advocates intensifying negotiations with the countries on their own agreements.

More: In Brussels and Beijing, confidence is growing that they will still be able to agree on a historic agreement.

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The industry is entering the new year with confidence

Light installation at Bellevue Palace in Berlin

The real estate industry believes in good business in the coming year.

(Foto: imago images/Future Image)

Frankfurt The corona crisis hit large parts of the German economy hard. The real estate industry, however, is suffering from the consequences of the pandemic at most in part. This creates confidence: According to a recent survey by the Institut der Deutschen Wirtschaft (IW), real estate companies are looking very positively into the future.

The expected value in the survey, which the experts publish quarterly in cooperation with the Handelsblatt and the umbrella association of the German real estate industry, ZIA, rose by 4.7 to 16.4 points. Accordingly, significantly more real estate companies expect their situation to improve in the next twelve months than it is to worsen.

“After another hard lockdown was imposed, confidence is likely to have diminished somewhat,” says study author Michael Voigtländer from the IW, the survey was ended immediately before the decision of the federal government. In the course of the changes decided on for the Christmas business, new rent deferrals are likely to occur for rentals to retailers, Voigtländer fears. “But in the end I can say that the real estate industry got through the crisis well and the optimism for the year 2021 is justified.”

To justify this, he refers to the estimates of his IW colleagues that the economy will shrink by around 5.3 percent in 2020, but will grow strongly in the coming year, so that gross domestic product will already reach pre-crisis levels by the end of 2021. In addition, it is becoming apparent that vaccinations will ease the situation.

Decisive for the optimism of the real estate industry are the effects of the corona pandemic on letting: While in the survey in the previous quarter 13.7 percent stated that they are severely affected by rent deferrals, this quarter it was only 7.3 percent. The improvement is mainly due to the retail market segment, because in the previous quarter 50 percent of companies were severely affected, now it was 14.3 percent.

graphic

Do you have to pay rent in a crisis?

Nonetheless, the issue of rent deferral is causing disputes. Many retailers find it unfair that they fear for their survival in the wake of the corona crisis, but at the same time have to continue to pay their rent. Many people no longer know how to survive this crisis, the retail association HDE had already warned at the beginning of December. “The Christmas business, which is so high in sales in normal years, could lead to bankruptcy for up to 50,000 dealers in 2020,” speculated HDE General Manager Stefan Genth.

In view of this, it is important that state bridging aid also arrives in retail and that retail in prime locations is relieved of the high rents. In return, the legislature should “finally make it clear that this pandemic is a disruption of the business base and thus enables a rent reduction”.

According to a survey by the HDE, two-thirds of retailers who are in talks with their landlords about adapting their lease have been unsuccessful. Accordingly, the landlords either completely refused negotiations from the outset, put off their contractual partner for a later date, or the negotiations were unsuccessful.

graphic

According to this survey, retailers were only able to achieve an adjustment of the rental agreement in a good third of the cases. Large parts of the landlords wanted to “only dump the risks of the corona crisis at their tenants”, criticizes the HDE for this reason.

“Landlords act responsibly”

This is an assessment that is not shared by property owners. You see yourself as a “community of fate”, as the real estate association ZIA emphasizes. Its members have also received other feedback on the current situation: Accordingly, a rental reduction had been agreed with around half of the dealers affected by the corona crisis.

And a significant part of the rental discounts from this went beyond what was agreed in the spring in a code of conduct between HDE and ZIA. “The range extends from the recommended 50 percent for the time of lockdown to several months for individual cinemas and restaurants.”

In addition, about 36 percent of retailers, for example grocers, drugstores and pharmacies, do not need to talk about rent reductions because they are open and generate corresponding sales.

The real estate owners act responsibly, emphasized ZIA President Andreas Mattner. “Landlords have a vested interest in keeping tenants and helping them through the crisis. We share a common destiny, and individual solutions are the key to surviving this difficult economic time. ”

A change in the law, as the HDE is demanding through Paragraph 313 of the German Civil Code, is nonsensical. “In view of these numbers, the general applicability of the discontinuation of the business basis to rental contracts is to be decidedly rejected. The contracting parties are better able to negotiate bilateral and tailor-made amendments to the contract themselves than by legal order. Those involved have proven that over the past few months, ”said Mattner.

IW expert Voigtländer also considers a new legal regulation of the relationship between landlord and tenant in the retail sector to be difficult. He points out the difficult conditions. “After all, there are very different companies on both sides: in some cases, large companies have rented space from relatively small property owners, in other cases small retailers are tenants of large real estate groups,” he explains.

Focus on structural problems in the industry

He is already looking ahead to the new year – and recommends that the industry tackle its structural problems. These not only affect the retail sector, but also the other sub-markets. “In the retail market, it is important to keep demand in the cities and to prevent more consumption from taking place online,” says Voigtländer. Concepts must be developed together with the cities to ensure that people enjoy coming back to the city centers.

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As far as the future of office real estate is concerned, one must also learn lessons from the corona crisis and develop concepts that do justice to the potential of digitization. “Certainly more people will want to work partially at home in the future, but the office remains important as a place of exchange,” he says.

What the office of tomorrow will look like cannot yet be foreseen. “Many companies are still trying out how they will design their offices and office space in the future. But I think the bottom line is that less office space will be needed, ”he says. “The corona crisis cannot pass the office market without a trace, if only because it is forcing many companies to take cost-saving measures. The consequences will only become apparent in the years to come. ”

And even the residential real estate industry, whose growth was not even slowed by the pandemic, is facing an exciting year according to the real estate expert: “The economic situation is particularly good in this area, but political risks are to be mentioned here, especially in view of this the federal election in 2021. ”

More: The federal and state governments decide on a tough lockdown: What will apply from Wednesday.

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