‘Landlords aren’t coming to the party’: Small businesses frustrated

Traders have warned suburban shopping strips could be wiped out for good unless landlords show leniency on rents for at least the next 12 months.

“It makes my mind boggle that landlords aren’t coming to the party. The landlord plays the most important role in the survival of the Chapel Street precinct,” Melbourne’s Chapel Street Precinct Association general manager Chrissie Maus said.

On Sunday evening, Prime Minister Scott Morrison outlined a six-month moratorium on evictions for both residential and commercial tenancies where the individuals had been financially affected by coronavirus shutdowns. He urged commercial lease holders to contact landlords to “sit down, talk to each other and work this out”.

However smaller operators said that advice is not straightforward because traders need to negotiate rates beyond the next six months and some landlords have been slow to negotiate even prior to the moratorium on evictions.

“Some of our landlords are doing the right thing, some are not. We’re pleading the public to support us and really begging landlords, saying, ‘if we do this together now, we will survive’,” Ms Maus said.

Council of Small Business Australia chief executive Peter Strong said many smaller private landlords were also feeling significant financial pressure, which could be affecting their willingness to compromise.

“The landlords are also small businesses and they really need to ring their banks and find out if they can get a [repayment] holiday,” he said.

However small business ombudsman Kate Carnell said big shopping centre owners needed to “step up” and take a leadership position.

“Everybody has to take some pain here and landlords are no exception” she said.

Chief executive of the Franchise Council of Australia Mary Aldred hit out at the nation’s shopping centre landlords, after being “inundated” with calls from franchisors and franchisees who received vague responses after writing to request a pause in rent payments.

Ms Aldred said she had seen pro-forma letters from landlords asking for a huge amount of detail about the financial situation of tenants, and believed operators were being deliberately slow in their dealings.

“They are asking for information from the ATO, for example, in an attempt to drag out the process,” she said.

While the national pause on evictions would be helpful, retailers must accept that traders would have to negotiate potentially lower rates into the next year, she said.

“There will need to be flexibility for the longer term,” Ms Aldred said.

The Shopping Centre Council of Australia has directed all its members not to terminate leases for non-payment over the coming months.

A spokesperson for diversified property group GPT Group said the current situation with rents was fast-moving and complex.

“In a rapidly changing situation and with 3,200 tenancies across our portfolio of shopping centres, we are working to resolve the best and most equitable way to serve the interests of all our stakeholder,” the spokesperson said.

A spokeswoman for Vicinity Group said, “our approach combines financial and non-financial measures dependent on the individual circumstances of each of our retailers from our smaller sole traders and family-run businesses through to the major chains and brands”.

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