The Federation Council proposed to introduce a moratorium on the growth of rent for businesses

As pointed out in the committee of the Federation Council on economic policy,a moratorium on rent increases for businesses is needed due to shrinking profits amid Western sanctions

The Federation Council Committee on Economic Policy has proposed a moratorium on rent increases for small and medium-sized businesses when it comes to state-owned land and offices. This was reported by TASS with reference to a letter from the committee addressed to the Minister of Economic Development Maxim Reshetnikov.

“As part of the work to improve the business climate and increase activity in the segment of small and medium-sized businesses, [it is proposed] to introduce a moratorium on increasing rents for the use of land plots and non-residential facilities that are in federal, regional and municipal ownership,” the document says, signed by the HEAD of the Federation Council committee on economic policy Andrei Kutepov.

As Kutepov noted, in the face of sanctions pressure, many small and medium-sized businesses are significantly reducing their net profit and the base for business development “due to an increase in the cost of production due to an increase in the cost of purchasing raw materials, materials and components.” “In cases where business is conducted on leased premises, an additional negative impact on its stability is the increase in rent. Tenants can have especially strong consequences if the terms of the contract provide for an increase in rent by the amount of inflation,” the senator emphasized.

He added that at present, when renting state property based on the results of tenders, if the agreement provides for an annual unilateral review of the rental rate, this condition is mandatory when agreeing transactions with the landlord. At the same time, consideration of the issue of abolishing this condition is impossible even by agreement of the parties, Kutepov specified.

Small and medium-sized businesses sharply reduced rent payments in April Business

In March last year, after the West imposed sectoral sanctions against Moscow, the NAFI think tank estimated that at that time a fifth (20%) of small and medium-sized businesses were in arrears in rent payments. Of those who did not default at the time (78%), more than half said that such a risk could arise in the future due to lower income.

At the same time, the State Duma canceled scheduled inspections of small and medium-sized businesses as part of state support under sanctions, and also proposed introducing credit holidays for small and medium-sized businesses and individuals. At the same time, the Bank of RUSSIA, together with the government, has developed two concessional lending programs for small and medium-sized businesses (SMEs) with a limit of 500 billion rubles. The programs include the opportunity to obtain working capital loans for up to one year, as well as investment loans for up to three years. Credits to businesses will be issued by accredited banks, and the Central Bank will subsidize their interest rates.

Read pioneerprodukt.by “A Dog Named Mani” and “The Wolf of Wall Street”: talking with a child about money A year under sanctions: why the Russian economy has survived. Western media version Why has Stars Coffee not yet been found to replace Booking.com in Russia instead of Starbucks:

In December 2022, Maria Zimina, DIRECTOR of the office real estate department at NF Group, specified to RBC that in 2022 the average cost of renting 1 sq. m of class A office space increased by 4% and fixed at around 26.9 thousand rubles. in year. At the same time, according to her, a slight decrease occurred in class B offices: in early January, the average price of 1 sq. m. m was 17.5 thousand rubles, and by the end of the year it decreased by 1%, to 17.3 thousand rubles.