In the centre of Palma, the crisis has had a profound impact on commercial rents. There are reductions of up to 50% for new contracts. Even so, new tenants are not necessarily rushing to take advantage of these reduced rates for premises where the shutters have been pulled down.
On Calle Sant Miquel, fifteen shops have closed. Signs for sale and for rent have gone up. It is a similar situation on Unió and Jaume III.
Chechu Osinalde, manager of commercial properties agent Gesmorent, says that it is true that in one case - a shop on Sant Miquel - the monthly rent has been cut from 8,000 to 3,000 euros. Other reductions are specific and temporary and are designed to help with the situation provoked by the pandemic.
With rents down by as much as two-thirds, Osinalde adds that the maximum length of these reductions is twelve months. Last year, his company sat down with landlords and tenants in order to assess the situation. Negotiations will continue, with real-estate sources believing that rents are too high and should come down by some 15%.
Another real-estate consultancy, Grupo Ferran, points to rent reductions of around 50% on Jaume III and to major brands relocating because of the fall in demand. Nevertheless, this is leading to more local, Majorcan businesses moving in.