In these uncertain times and with new government restrictions being announced daily, one of the biggest costs for shopping centre retail tenants is the cost of rent. This week, the NSW State Parliament passed legislation that prevents any landlord from evicting a tenant for the next six months. This gives some certainty of premises for retailers, but leaves the question of rental abatement for retailers highly impacted by the crisis.
According to reports, up to 50% of retailers trading in shopping centres have either been subject to government restrictions or have chosen to close due to a lack of trade or the higher risk of coronavirus on the health of their teams and staff.
Ahead of government enforced closures many major retailer groups have decided to close their doors temporarily including the Just Cuts franchising group, Michael Hill Jewellers, Lovisa and the Accent Group. Premier Investments who own Just Group has brands: Portmans, Smiggle, Just Jeans and Peter Alexander, has also closed their stores impacting 9,000 staff.
In a ASX media release the group stated “Premier’s primary focus is the health and safety of its employees, its customers and the broader community. As a result, we have no choice but to temporarily close all retail stores in Australia from 6pm today, 26 March 2020, until 9am (local time) Wednesday 22 April 2020.”
Landlords and retailers are working together to address the challenging environment and survive this together as an industry.
The Shopping Centre Council of Australia (SCCA) is continuing to work with the Federal Government on a suite of measures to provide additional support for small to medium sized businesses.
In a memo to members, the SCCA asks members to ensure there are no lease terminations for non-payment of rent for small to medium sized businesses as we work through this period.
“It is vital that our industry, as a key part of the economy and our local communities, work collaboratively with government and our SME retailers to support their cashflow and jobs across the economy”, said Chairperson, Peter Allen, also Group CEO of Scentre Group.
It is expected the Federal Government will hand down more assistance to businesses in their next announcement.
Woolworths Group will be offering support in way of rental relief and employment opportunities to help retail tenants in its shopping centres and other retail assets impacted by the coronavirus pandemic.
