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Shopping centres can offer rent relief to small-business tenants

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
07 April 2020 1 minute readShare
Westfield

The ACCC has granted interim authorisation to shopping centre owners and managers to negotiate rent relief measures for small to medium tenants facing hardship because of the COVID-19 pandemic.

Following an application by industry group Shopping Centre Council of Australia Limited (SCCA) and the operator of 42 Westfield shopping centres, Scentre Group, the ACCC has given shopping centre owners and managers to go-ahead to jointly develop a plan to help their small-business tenants, including franchisees and licensees, which have a turnover of up to $50 million per annum.

The plan could include an offer to defer or reduce rents and other payments, waive interest payments and extend leases.

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“Support for small and medium businesses in this difficult time will help the economy start up again when the pandemic has subsided,” ACCC chair Rod Sims said.

“We are allowing shopping centre owners to work together to come up with a plan to support their tenants experiencing financial difficulties. Nothing in the proposal stops individual owners from offering more generous concessions to their tenants.”

 

The ACCC will be notified of the rent relief measures agreed to, which will be published on its authorisations register.

It confirmed that it can object to any proposed agreements and revoke the authorisation at any time.

Having granted interim authorisation for the arrangements, the ACCC will now seek feedback on the application for final authorisation which is sought for a period of 12 months.

Last week, Aussie national retail groups and shopping centre landlords said they have reached an agreement on a set of retail leasing principles, presenting a united front in dealing with the impacts of the coronavirus.

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Heeding the PM’s advice to “sit down, talk to each other and work this out”, the National Retail Association (NRA), the Australian Retailers Association (ARA), the Pharmacy Guild of Australia (PGA) and the Shopping Centre Council of Australia (SCCA) sat down and negotiated a deal favourable to both sides.

Calling for a national approach through the implementation of a code of conduct for retail leasing that assists both retailers and landlords, the industry groups also gave their opinion on each of the principles presented by Prime Minister Scott Morrison to underpin and govern intervention to aid commercial tenancies.

SCCA executive director Angus Nardi explained at the time that shopping centre owners and retailers have a mutual interest in business continuity.

“It’s positive to have a unanimous and timely approach to tackle the pressing challenges we all confront in the current environment in a way that is fair and balanced to everyone,” Mr Nardi said.

Further, the industry groups reiterated that landlords and tenants not significantly affected by the coronavirus are expected to honour their lease and rental agreements.

Shopping centres can offer rent relief to small-business tenants
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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