March 24, 2020 / 10:33 PM / 11 days ago

Brazilian malls, shopkeepers hit stalemate in rental talks during coronavirus lockdown

SAO PAULO, March 24 (Reuters) - Negotiations between Brazilian shopkeepers and mall operators on rental payments during the coronavirus lockdown hit a stalemate on Tuesday, as the sector has failed so far to receive tax cuts or other relief measures from the government to deal with the worsening crisis.

“The scenario needs to be analyzed day by day, hour by hour ... Our position at the moment is that, even though by contract these rents are due, it is reasonable to collect payments later on,” Glauco Humai, president of Brazil’s mall operators association, Abrasce, told Reuters.

His remarks contradict a statement sent by local shopkeepers association Alshop late on Monday citing a deal with mall operators for a complete exemption from paying any rent as long as malls were closed, as well as a reduction in maintenance cleaning and energy fees.

On Tuesday, Alshop emphasized that charging shopkeepers while malls are closed is not feasible, especially because the resumption of sales will most likely be slow and gradual.

“However, we understand that the relationship between the shopkeeper and the mall owner is governed by a contract and we propose common sense at this difficult time for the entire sector,” Alshop said in a statement on Tuesday.

So far, 550 of the total 577 malls in Brazil are closed to comply with authorities’ requirements for social isolation, Abrasce data showed, as the coronavirus quickly spreads across Latin America’s largest economy.

Of the malls that have closed, 182 are located in Sao Paulo state, Brazil’s industrial, business and financial engine, which on Tuesday went into its first day of a two-week quarantine lockdown.

Coronavirus deaths in Brazil on Tuesday rose to 46 from 34, and cases rose to 2,201 from 1,891, according to Health Ministry figures.

Humai noted that Abrasce has already sent to federal, state and municipal governments a document recommending 22 measures to help the sector overcome the ongoing crisis without major layoffs, but has so far received no responses.

“There is no such prioritization or indication that our sector will be served with these measures,” Humai said, adding that Brazilian malls account for approximately 3 million direct jobs.

For the moment, he added, mall operators have been working hard to cut maintenance costs by at least 30% in coming months. (Reporting by Gabriela Mello in Sao Paulo Editing by Matthew Lewis)

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