At least four shopping malls in Saudi Arabia have just granted a rent reprieve to retailers and other tenants in view of the financial impact caused by the coronavirus pandemic.

Swicorp, the fund manager of Swicorp Wabel Real Estate Investment Traded Fund (REIT) said on Tuesday its board has decided to exempt eligible merchants at its four commercial complexes from paying rent for more than a month, from March 17 to April 30, 2020, or until the establishments are allowed to reopen.

Last month, the kingdom ordered the closure of shopping malls across the country until further notice to help contain the spread of coronavirus.

As of Tuesday, Saudi Arabia had nearly 5,000 coronavirus cases, with 65 deaths and 805 recoveries.

Retailers, including restaurants, cafes and other non-essential businesses, have been among the hardest hit by the coronavirus pandemic. Government-mandated closures have sent millions of workers home, knocking out businesses and causing severe economic pain to both entrepreneurs and employees.

According to Swicorp, the decision to waive rental payments will benefit “certain eligible” tenants that are “most affected” by the disruption in business.

Tenants with shops still open, including pharmacies and supermarkets, are excluded from the rent-free offer.

“The decision was taken in light of the recommendation from the property manager that had received several requests from tenants to either reduce, reschedule or suspend due rents,” Swicorp said in a statement to the Saudi bourse.

The tenants who will enjoy zero rent are located in Al Makan Mall Hafr Al Batin, Al Makan Mall Riyadh, Al Makan Mall Tabuk and Al Makan Mall AlDawadmi.

Swicorp added that it has yet to determine the full impact of the coronavirus pandemic on its overall financial position, but the potential revenue loss can be up to 7.2 percent of annual rent for one month the malls are closed.

“The [company’s] business is expected to be negatively affected as a result,” it added.

(Writing by Cleofe Maceda; editing by Seban Scaria)

Cleofe.Maceda@refinitiv.com

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© ZAWYA 2020