Kiinteistö Oy Kaapelitalo to ease the economic fallout of the coronavirus
KOY Kaapelitalo’s Board of Directors decided at its meeting on Monday, March 30, 2020 on a policy to ease the economic strain caused by COVID-19 to the tenants. KOY Kaapelitalo is a company owned by the City of Helsinki, and the policy follows the city’s recommendation on March 27, 2020 to its group companies regarding rents for premises.
The Board of Directors decided on the following:
During April 1 to June 30, 2020, tenants at Cable Factory, Suvilahti and Nilsiänkatu 10 working in the following industries will be exempt from rents and compensations for use: restaurants and other food services, shops, art, music and event services, program and catering services. The following business services are exempt from rents and compensations for use: incubator and growth services and other activities promoting entrepreneurship, hairdressers, beauty salons, and physical and health services including massage and physiotherapy.
The rent exemptions for the above sectors are implemented automatically, i.e. the tenant does not have to contact the landlord separately. Businesses in other sectors may be exempted from rent, as appropriate, after a separate assessment. The landlord will inform these tenants on how to apply exemption by 31 March 2020 at the latest.
The arrangement does not relieve tenants of their other rental obligations (including charges for financial costs). The arrangement does not apply to the Company's event facilities or areas that are rented for short-term. During the exemption, the tenant can engage in activities covered by the rental agreement, except for activities subject to a ban imposed by a public authority.
Rent reductions are of the same magnitude as emergency assistance to cultural operators granted on March 19, 2020 by major Finnish foundations, the Ministry of Education and Culture and the Arts Promotion Centre Finland. KOY Kaapelitalo owns approximately 100,000 m2 of old industrial properties in Helsinki, from which it leases space to over 600 tenants – mainly artists, cultural organizations and creative industries.
KOY Kaapelitalo is part of the City of Helsinki’s City Group. However, it is a fully income-funded company whose revenue stream is almost exclusively based on long-term rental of workspaces and short-term rental of event spaces.
Due to the COVID-19 epidemic, all of the bookings of event facilities for this spring have been cancelled, which has already caused the company a loss of about 200 000,00 euros. Indeed, the year 2020 will mean substantial losses for the company. KOY Kaapelitalo is negotiating with the City of Helsinki on the measures and actions needed to ensure the adequacy of its cash reserves and is prepared to take out a EUR 1.5 million bank loan.
- The coronavirus epidemic with various restrictions has been hit particularly hard on the arts and culture, which our tenants mainly represent. With reduced rents, we are trying to help our tenants to get out of the crisis, and we believe this will benefit the company in the long run, says Kai Huotari, CEO of KOY Kaapelitalo.
Kai Huotari, Managing director, Kiinteistö Oy Kaapelitalo, kai.huotari(at)kaapelitehdas.fi, tel. +358 50 384 1557
Photo: Kuvio Oy / Cable Factory