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COVID-19 Colliers International outlines the measures taken by governments across EMEA

02 04 20 covid emea

The Danish, German, Dutch, UK and Swedish governments rank joint top for their COVID-19 response while South Africa and Russia have done the least so far.


Colliers International’s 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. Force majeure impact on lease contracts is also considered.

Damian Harrington, Colliers’ Head of EMEA Research explains: “Our report has been structured in a way to be a guide to businesses, occupiers and landlords/investors alike. It is an outline of the government support available per country, not investment advice, and is updated regularly as policy changes in order to support national businesses and households as they are impacted by COVID -19. We have generated an outline ranking of markets, on a scale from zero to five, based on the depth and breadth of support provided across the categories mentioned at the time of reporting. A score of five represents the highest level of government support, down to zero where no formal government support has been provided or announced to date.” 

We have revised our initial rankings over the past week, as on reflection no single country provides full support across each of the elements we have considered. That said a number of countries have really stepped up to support their national economies and stakeholders. For some countries, this has been slightly easier given the infrastructure already in place, such as in Germany and countries across the Nordics, particularly when it comes to supporting income levels through existing welfare systems. The swift adoption of furloughed workers policies in the Netherlands and the UK has helped moved these countries to the top of the rankings, on top of the other levels of support on offer.

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Direct government support for occupiers and/or landlords with their commercial rents/mortgages has proven to be very limited to date. Only in the Netherlands have some banks agreed to provide commercial mortgage holidays to landlords for up to 6 months at present. In Italy, Austria and Greece the government 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.  

The scale of governments loans and grants has also been impressive, with the UK, Germany and France combined providing over €1 trillion in business loans and grants. The majority of EMEA markets provide some form of business loans and grants, often directed specifically at the most troubled industries – including airlines, tourism-related industries and retailers - and for SMES, the self-employed and micro-businesses of less than 10 employees. In Germany, SMEs are being given accelerated access to loans and there are to be no insolvency claims until September. That said, many of these loans and grants are currently subject to EU state-aid rules, which can significantly limit the funding available to a single company and their subsidiaries. 

Tax rebates is the other key form of fiscal support being offered, primarily through the deferral of specific payments for VAT, corporate tax, social security contributions. In the Netherlands and Sweden, there is a three-month postponement of all taxes. In Germany, companies can apply to have their tax deferred until December 2020. The Spanish government offers 75% discount to social security contributions where redundancies. In some cases, local tourism/hotel taxes (Turkey) or business rates (UK) have been deferred. In the UAE, local government fees in Dubai are frozen or cancelled and municipality fees for the tourism and entertainment sectors in Abu Dhabi are suspended.

More information is available on Colliers’ microsite which provides insight and recommendations for business during the COVID-19 global pandemic. The site is updated regularly and provides information on key trends impacting our economies, capital markets, various real estate sectors and geographies at this unprecedented time.

View the site here


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Damian Harrington

Head of Global Capital Markets Research | EMEA Head of Research

Research

London - West End

I currently have a joint role as a Director Colliers, as both Head of EMEA Research, and Head of Global Capital Markets Research.  I am also part of  our EMEA Location Strategy team.

I have worked within the real estate profession  for over 20 years, living and working from various locations across EMEA including London, Dubai, Prague, Helsinki and Amsterdam. My work and student experiences expanded my horizon to include India and the US. 

I use my experience and analytical skills to take a forward looking view of market opportunities & challenges impacting the industry on behalf of internal and external clients.  During my career I have written research /generated analysis of markets across all asset class types - from residential to offices, retail to logistics and hotels to niche sectors such as life sciences, air cargo and data centres.   I have analysed a variety of subjects and subject matter relevanmt to our industry, examining the impact on real estate such as the changing nature of global capital and the impact on global capital flows, the impact of e-commerce and near/off-shoring on global industrial and logistics markets and the changing nature of the energy and hydrocarbon industry. In addition to developing a view of markets at a very high-level,  I have conducted multiple studies examing the  micro-meso location factors critical in supporting the creation of planning policy at city/regional level, and in supporting investment and occupier decisions on key projects across EMEA, in addition to providing a strategic overview of multiple- markets and locations  as part of the decision making process. 

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