New voluntary scheme offers Valletta’s shops 45-year lease

A new voluntary scheme launched by Small Business Minister Jason Azzopardi offers Valletta shops lessees the opportunity to enter a 45-year lease agreement with the Lands' Department.

Those who enter the scheme can now also be able to sublet their shop. As things stand today, subletting of premises owned by government is prohibited with the result that many end up fighting a court battle in order not to lose their shop if the Lands discovers that a shop has been sub-let.

The scheme opens on 1 December 2012 and closes on 1 December 2013.

"We have been working on this scheme for over three years. 475 shops in Valletta are leased and not owned. The lease is on a six-month basis, something which is of a problem to those who was to invest in their premises," Azzopardi said.

He added that those seeking a bank loan would only face a closed door since no bank would issue a loan on this condition.

Valletta is split up in four zones in which different lease rates apply: the scheme will see the lessee paying the present rate for the first three years; between the fourth and eighth year the rate will gradually increase. From the ninth year onwards the lessee would start paying the negotiated rate.

Azzopardi insisted that the aim was to give shops the peace of mind that they won't be kicked put for having sub-let. "This is not about government making profit... although it would be incorrect to say the Lands Department wouldn't be seeking a profitable deal from the negotiations. The first to benefit will be the owners and consumers. Nine years down the line government will eventually start making profit."

The minister added that the ultimate aim was to see shops investing and expanding as is would automatically lead to attracting consumers and increase in employment. He said that the scheme was also to see Valletta get back on its feet.

"I won't deny that sales have decreased in the City. But I see Valletta as unpolished diamond, that through the different works being carried out is slowly getting back its shine."

Also present for the press conference were representatives front the GRTU, the Chamber of Commerce, the Republic Street Community and the Merchant Street Community.

Seasoned entrepreneur Reggie Fava said the most important thing about the scheme was that it was voluntary.

"Who knows how to do business will take it up, especially since the rate is negotiable," Fava said, adding that businesses now had the opportunity to sublet and therefore bringing back money spent in refurbishing works.