COMMERCIAL PROPERTY, SALES & LEASINGCORONAVIRUS COVID-19 PANDEMIC

45pc of retailers negotiated rent relief, more to come

Print Friendly, PDF & Email

MORE than 150 rent relief deals are being reached per day between shopping centre owners and small to medium enterprise tenants, covering 45% of retailers to date and more are working through discussions.

A survey by the Shopping Centre Council of Australia (SCCA), the national industry group for shopping centre owners, managers and developers, said 6,473 agreements were reached within the nine-week period from the 30th March to the end of May.

This includes more than 1,400 agreements that finalised in the final two weeks of the period, an increase of almost 20% since the SCCA last surveyed its members.

SCCA executive director, Angus Nardi said rental relief is getting through to those who need it most, and that the increasing volume of agreements illustrate that the Commercial Tenancy Code of Conduct announced on 7th April is working.

But he said there is more work to do.

“While the vast majority of conversations have been productive, there are instances where agreements are taking longer to negotiate.” Nardi said this is “often as a result of a lack of documentation to support claims for rental assistance”.

Every SCCA member has offered or reached agreement with SME retailers on rental assistance on a case-by-case basis, the organisation said. Under the Code, this includes both waiving and deferring rent, and arrangements such as extended lease terms.

Cafes, food catering and takeaway retail and catering tenants account for the highest proportion of offers or agreements for rental assistance to date, at 26%. Retail services, such as hair, beauty, nails and shoe repairs followed at 21%, and clothing and footwear at 14%. Many of these are affected by government gathering and trading restrictions.

New South Wales accounts for nearly one third of offers (32%), and combined with Victoria (29%) and Queensland (23%) the eastern seaboard states make up for almost three-quarters of offers.

Major landlords including Vicinity, Scentre, Mirvac and GPT have all reported increased foot traffic at their stores, but some have experienced hefty writedowns in the value of their retail portfolio. GPT has taken a $468 million hit and Mirvac this week announced a $349 million writedown to its shopping centres.