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Lotte and Shilla Give Up Duty Free License for Incheon International Airport
Due to Increasing Rent Burden
Lotte and Shilla Give Up Duty Free License for Incheon International Airport
  • By Choi Moon-hee
  • April 9, 2020, 11:09
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Lotte Duty Free and Shilla Duty Free decided not to extend their contracts for duty-free shops in the first passenger terminal of the Incheon International Airport. On the other hand, Hyundai Department Store Duty Free extended its rental contract for business starting from August this year.
 

Earlier, Lotte Duty Free and Shilla Duty Free were selected on March 8 as the preferred bidders for the DF4 and DF3 zones, which are liquor-tobacco zones, respectively. They were supposed to start business in the zones in August this year through a review of the Korean Intellectual Property Office.

However, the two companies decided to withdraw for their rent burden increasing amid the spread of COVID-19. In the first year of the license, a fixed rent equivalent to the successful bid price is applied. From the second year, however, the rent is calculated by adding or subtracting 50 percent of the rate of change in the number of passengers in the previous year in relation to the minimum payment for the first year. The limit of change that is applied to the minimum annual payment is 9 percent and a 9 percent increase in rent was estimated for next year even in the event of a zero increase in the number of passengers.