Malta Industrial Parks Ltd (MIP) and the Malta Chamber of Commerce, Enterprise and Industry have signed two Memoranda of Understanding (MOU) to revise the rent policy and service charge across the industrial estates managed by MIP.
The revised rent policy refines the manner through which the rent payable by the tenants at the industrial estates is determined. While the minimum and maximum rental rates have remained the same, the mechanism that establishes the amount due by the individual tenants within those brackets is being changed.
This system takes into account factors such as the type of factory, the year it was built in and its current condition, the type of roof, as well as the particular industrial estate in which the factory is located and the amenities available at such estate.
The MOU also decreases the frequency at which the rent increases from 3 years to 5 years, such that rent will now increase by 5% only every 5 years, thus creating more favourable conditions for the tenants.
The lease of terms being offered in terms of the revised policy are either a 10 year initial term followed by a 10 year renewal term for projects of strategic and significant economic benefit or, for projects of lesser strategic and economic importance, a 5 year initial terms followed by a 5 year renewal term.
The terms of the revised rent policy also seek to further encouarge tenants to invest in their property, amongst others by offering the possibility of extending the lease term when major capital investments are made.
On the other hand, the MOU in relation to the service charge establishes that the administrastion of each industrial estate is to be entrusted to its respective tenants association, which shall be responsible for the daily administration and upkeep and of the industrial estate. MIP will maintain a certain level of direct involvement through a representative on each of these tenants’ associations.
Through the MOU, the Chamber and MIP have agreed to facilitate the creation of tenants’ associations for those estates where such associations do not already exist.
While MIP will still be responsible for capital investment and major projects in the industrial areas, it will handover responsibility for the daily upkeep, maintenance and repair of all common areas to the tenants’ associations, with which it shall also enter into Service Level Agreements (SLAs) that amongst others will outline the minimum standards that need to met by the associations.
A costed programme of works which will reflect the minimum standards determined by MIP shall be proposed by the tenants’ association for discussion and agreement with MIP.
The costs will be covered through the collection of a service charge, which is to be determined by the tenants’ associations themselves and approved by the MIP Board on a not-for-profit, full recovery basis.
The service charge will be collected on quarterly basis by MIP, which will then pass on the funds collected to the tenants’ association. The amount to be collected will vary depending on the approved programme of works.