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Tuesday, April 16, 2024

Rent on the basis of use in industrial zones is preferred by the Government-Serious differences in the amounts

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The Government is moving to levy rents on government plots on the basis of usage rather than market value, in an attempt to resolve the problem of different regimes applicable in industrial areas and industrial zones, the Minister of Energy, Commerce said on Tuesday and Industry, Giorgos Papanastasiou.

“There is a serious distortion between zones and regions. The zones determine the rent of the land based on the market value of the land, while in the industrial areas the Ministry of Energy determines the rent based on the use”, said Mr. Papanastasiou, in statements after the session of the Parliamentary Trade Committee, which examined the whole thing.

As stated before the Committee, at present the responsibilities for the matter are located in the Ministry of Commerce which has responsibility for industrial areas, applying a policy of determining rent on the basis of use, and the Ministry of the Interior for industrial zones, where rents are priced on the basis of the market value of the property, resulting in differences that distort competition. At the same time, the municipalities and communities, under whose responsibility the craft zones fall, have responsibility.

Both the Minister of Energy and the Director General of the Ministry of the Interior, Elikkos Ilias, reassured that everyone's rents will not be increased based on the market value. The Minister of Energy asked for time until September in order to evaluate each area separately and the rents in force.

Serious differences in rents

Informing the Committee, Mr. Papanastasiou said that an advisory committee, with representatives from the Ministry of Commerce, Land and Urban Planning, had been set up to look into the matter to identify where the problem, qualified to find a solution.

He said that two areas were identified with very large differences in terms of rent. In particular, in the industrial area of ​​Strovolos the rent is €1.15 per square meter, compared to €11 per square meter in the industrial zone of Strovolos. In Limassol the rent is €1.15 per square meter in the industrial area compared to €8 per square meter in the industrial zone.

He further explained that in industrial zones there are both government and private plots and there is no infrastructure and government services. He noted that the change in the policy regarding plots is not easy, as there are also legal obstacles and therefore the thought of changing the rent concerns new contracts or building rentals and leases.

For his part, the General Director of the Ministry of Internal Affairs, Elikkos Ilias, said that from the first analysis that was done, they found the differences that exist. “This is exactly what we want the two Ministers to define a framework for smooth or gradual restoration, because when there are already signed contracts there is difficulty in changing or modifying the rent,” he said.

He assured that 'the goal is not to raise the rents of the whole world,'”

“What we are looking at is to sort them out, to help those with very low rents or some high rents, through the de minimis subsidy scheme to cover the price difference in industrial zones,” he said

In response to a question about the conversion of industrial zones into industrial areas under the jurisdiction of the Ministry of Commerce, Mr. Ilias said that the study focused on the amount of rents and not on the conversion of zones in regions.

At the session, all the agencies that were invited expressed concerns about the large difference in rent between industrial areas and industrial zones.

On behalf of OEB, Michalis Grigoriou said that the problem lies in the rents in the lots located in the industrial zones. “We agree on the one policy, but what we are strongly concerned about is not increasing the rents in the areas to come to those of the zones,” he said, adding that we need to break free from the principle of market value.

Andreas Andreou on behalf of the KEBE said that it is difficult to bring the whole matter under the umbrella of a Ministry, since the Ministry of Commerce has responsibility for industrial areas, the Ministry of the Interior for industrial zones, while the municipalities also have responsibility for craft zones.

As he said, the first measure is to calculate the rent on the basis of use for which there is a methodology and the second is the De minimis plan to cover part of the rent, in order to be examined by the Ministry of the Interior to cover part of the rent in industrial zones, where the rents are higher.

On behalf of POVEK, Stefanos Koursaris said that all the agencies involved must participate in the advisory committee, adding that the increase cannot be discussed of rents in industrial zones to approach those of industrial zones.

In response, the Minister of Commerce said that they recognize the problem, which is not only about rents, but also about how these lives and areas are managed.

“We will let's try to bring them under one body and basically there should be a uniform management of the areas. It is not our purpose to burden the industry and production of Cyprus with additional rents, the purpose of our Ministry is to find a way of management”, he added.

The President of the Parliamentary Committee, Kyriakos Hatzigiannis, requested that the executive power present a solution by September, stressing that the imposition of different rents does not bring the desired result.

“At the end of the day, the Government will have to make the decision. Today, a year later, we observe the same spirit, the same treatment of things. These issues must be resolved, they must not be parked,” he said, adding that today “vague promises without concrete results” were heard.

The former President of DISY, MP Averof Neofytou, referred to the huge differences between the rents since, as he said, there is an area in Strovolos where the rent is €0.99 per square meter and in Kokkinotrimithia where the rent is €7 per meter. “All these distortions are a situation that has existed for decades, it is time to correct them,” he said.

On behalf of AKEL, MP Kostas Kostas said that the topic was discussed again in June 2023 and related to the different policy in the management of industrial areas and zones. “We ask for the self-evident that there should be a single body and a single regime,” he added.

EDEK MP Ilias Myrianthous called on the Ministry of Commerce to reinstate an earlier plan to support the movement businesses from industrial areas, to other licensed industrial areas or zones.

Source: KYPE

Source: reporter.com.cy

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