Retailers against shopping centers, five more years under Sechin and losses on food delivery

Stores and malls clash over rent payments

The main battle of the week is a dispute between large tenants and owners of shopping centers. Today, the State Duma was supposed to adopt in the second reading a law allowing the termination of lease agreements with shopping centers unilaterally and without any fees if the retailer's revenue after the introduction of the "high alert mode" fell by more than 50%. But the owners of large shopping centers and business centers, including the structures of Roman Abramovich and Mikhail Gutseriev, opposed it, and the consideration was postponed until next week. Retailers are counting on the fact that in the end they will have the right to terminate contracts at least until October.

• The right for the affected tenants to terminate contracts with the shopping center on favorable terms was included in the government bill on supporting the economy, which the State Duma adopted in the first reading last week.
• The Russian Union of Shopping Centers immediately opposed the proposal of the document, warning of "irreversible destruction of the industry" and falling below the poverty line of 6.3 million people. After that, 11 leaders of the commercial real estate market, including the structures of Roman Abramovich, Mikhail Gutseriev, Alexander Klyachin and other businessmen, published a collective open letter . Its meaning boils down to the fact that the unilateral termination of contracts without compensation will cause the collapse of not only the commercial real estate sector, but also the banks that issued loans to it for 6 trillion rubles.
• Tenants, whose business has actually stopped, on the contrary, are in favor of the early adoption of the bill: the associations of retail and Internet companies (AKORT and AKIT) asked the State Duma to expedite the adoption of the document. If the proposal does not go through, then “in the summer we will see completely empty shopping centers due to bankruptcies of retailers,” said Artem Sokolov, head of AKIT.
• Without waiting for the second reading scheduled for Wednesday (which was eventually postponed to next week), the Ministry of Economy prepared a compromise amendment: affected tenants will be able to terminate contracts with owners unilaterally only until October 1, 2020 and at the same time reimburse them for losses in the amount of one monthly payment . The ministry said that, together with the deputies, it is looking for a compromise that will give tenants the opportunity to "get rid of the enslaving conditions in which they now find themselves."
• Tenants interviewed by The Bell fear that the bill can still be adopted in a tough form - termination of the contract only through the courts, and assure that the bill is aimed only at those landlords who do not want to negotiate, require 100% payment for the rent of a closed space and impose millions in fines . The Shokoladnitsa network has about a quarter of such landlords, its CEO Oleg Podgorny told The Bell.
• Landlords, judging by their comments, also do not give up the fight. The amendment introduced by the Ministry of Economy is a correct, but insufficient step towards landlords: even taking into account it, the clause on unilateral termination of lease agreements violates the principles of fairness and civil equality and gives tenants advantages over landlords, the first deputy general director of AFI Development told Vedomosti (manages, for example, the shopping center "Afimoll") Evgeny Potashnikov.

What do I get from this?

You can understand both retailers who suffer direct losses on rent due to a stoppage of work, and owners of shopping centers - the banks from which they took out loans for the construction of real estate are not going to forgive their debts and will not, and it is impossible to completely cancel the costs of operating the shopping center . But I wouldn't want to be left without half of the retail chains by the autumn.

MONEY

Five more years under Sechin

Now it’s clear why Igor Sechin needed an unexpected face-to-face meeting with Vladimir Putin - as Vedomosti found out, a few days ago the government (formally it does this) issued a directive to extend Sechin’s powers as head of Rosneft for another five years. It really was worth discussing such news in person - perhaps also in order to demonstrate that no one is offended by Sechin for March 2020 . Now Sechin's new contract must be approved by the board of directors of the company - and then in 2022 he will be able to celebrate his 10th anniversary as head of Rosneft.

No job no credit

As the banks predicted, after the upward jump in March , in April, the demand of citizens for loans dropped sharply - the portfolio of loans to individuals, for example, Sberbank, decreased by 33 billion rubles. This is a record since 2008. Detailed figures look predictable: consumer loans decreased the most (by 59%), mortgages decreased the least (by 9%). The point is not only in the fall in consumption during self-isolation, but also in the tightening of bank requirements for borrowers, who may soon become poorer. At Tinkoff Bank, the share of approved loan applications fell from the pre-crisis 30-35% to 10-12%, the head of the bank, Oliver Hughes, told Kommersant. “Everyone with whom we spoke only issues loans to their verified borrowers, and then only after making sure through the PFR database that they have not lost their jobs. Better yet, the borrower has an account or a deposit,” another major bank told the publication.

DAILY CORONAVIRUS

The fight for the death rate

The Russian authorities continue to fight the “fake” FT article about underreporting deaths from coronavirus. The Foreign Ministry wrote to the FT and The New York Times, which published a similar article, letters demanding retractions, and, just in case, complained about the newspapers to the UN Secretary General, to UNESCO and the OSCE. But the Moscow Department of Health, in its response to the FT article, admitted that 60% of the deaths of people with suspected COVID-19 are recorded with an “alternative cause” - heart attacks, strokes and other deadly diseases.

• The United States is also fighting an external coronavirus enemy - but in their case it is China. A package of sanctions against China for hiding information about COVID-19 has already been prepared, now the US intelligence agencies have officially announced China's cyberattacks on research institutes to obtain data on a future vaccine.
• Burnt-out ventilators in two Russian hospitals were difficult and inconvenient to use, and prone to breakage, wrote The Moscow Times, citing doctors working with them. It also turned out that it was these devices that Russia sent to the United States, but they were not useful there - including due to electrical incompatibility (220 volts versus 110 accepted in the USA).
• The Ministry of Education and Science considers it expedient to conduct the exam remotely this year. The Ministry of Education has confirmed that the unified exam will be postponed from June 8, but has not yet said what date.
• Russia has adopted a draft law on remote voting. By mail - electronic and physical - it will be possible to vote ahead of schedule. Experts are confident that the law will be used to falsify the election results.
• As well as news about alternative ways to deal with coronavirus. Some State Duma deputies began to wear special badges in the form of a white cross on a black background to protect against COVID-19 (called “virus stopper”, sold on Amazon and in Russian pharmacies for 900 rubles). Dmitry Peskov wore a similar device before becoming infected - and now he regrets a little that the journalists convinced him to abandon the "blocker". We sincerely wish Dmitry Peskov a speedy recovery, and the State Duma deputies not to get sick.

Other important news about coronavirus in Russia and in the world - in our daily digest .

PRACTICE

More growth, more problems

It would seem that the general quarantine is a gift of fate for food delivery services, which could allow them to fulfill their cherished dream: to go to zero. But the American experience shows that even the most successful market conditions cannot make a profitable business that is set up to burn money for a market share, states the WSJ. Sales of Uber Eats, Grubhub, Door Dash and other quarantined services are growing rapidly, but so are the costs of servicing a growing number of orders, disinfection and security costs - and at the same time, restaurants are trying by all means to get rid of commissions up to 30%, which outraged just as in Russia . Restaurant chains are refusing exclusive contracts with services, trying to develop their own delivery. Idle table reservation and pre-order services are also trying to snatch their market share - as a result of competition, it only becomes more, which means that “zero” is postponed even further.

Home appliances for a post-pandemic world

But feel sellers of home appliances much better, writes Bloomberg. The average American refrigerator is twice the size of a European one, but even these volumes are not enough to accommodate the food that Americans are stocking. The main hits of recent months in the US are devices that allow you to make at home products that people used to go to stores for: bread makers (sales growth 6 times in the US from March 15 to April 15), pasta machines (+462%) and soda (+283%). But the market is growing not only in quantity, but also in quality: the demand for dishwashers with a disinfection function, dryers (microbes multiply in towels) has predictably soared. A separate hit is smart refrigerators: for a family that has stocked up on food for a month in advance, the warning function about the expiration date of products becomes really useful.