Retailers, Mall Owners Unite in Call for Clarity on Leases

Retail groups and shopping centre landlords have united in calling for a national code of conduct for commercial leasing to assist the sector during the coronavirus pandemic.

Key retail groups including the Shopping Centre Council of Australia (SCCA), Australian Retailers Association (ARA), the National Retail Association (NRA) and the Pharmacy Guild of Australia have proposed a set of principles to help guide government intervention in commercial leases impacted by Covid-19.

In a joint statement, the groups announced their shared commitment to ensuring business continuity in response to assistance measures outlined by prime minister Scott Morrison on 29 March.

“We sat down immediately after the prime minister’s announcement to come together in good faith and continue our ongoing discussions to ensure landlords and tenants are working together,” NRA chief executive Dominique Lamb said.

In response to each of the national cabinet’s seven "common principles" relating to government intervention in commercial tenancies impacted by coronavirus, the retailers have compiled their own list of "agreed joint principles".

As an overarching principle, the retailers' group calls for all leases to be dealt with “on a case-by-case basis, considering factors such as whether the tenant has suffered financial hardship due to Covid-19; whether the tenant is an SME; whether the tenant’s lease has expired or is soon to expire; and whether the lessee is in administration or receivership”.

In-principle support is given for the government's short-term moratorium on eviction for non-payment of rent in commercial tenancies impacted by coronavirus.

In contrast, the group sees a lack of balance in the national cabinet's principle regarding the ability for tenants to terminate leases and seek mediation or conciliation on the grounds of financial distress.

"Termination as proposed is not supported, and we believe should not be progressed," the joint statement said.

ARA chief executive Russel Zimmerman said the industry has a track record of working together on challenging issues, “and this is about working together and assisting policy makers in the next phase given our group’s longstanding engagement on retail leasing issues”.

SCCA executive director Angus Nardi added that both shopping centre owners and retailers had 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.”