Franchise supports call for code
National franchise retailer Bakers Delight is supporting a call for a code of conduct for major shopping centres. The code of conduct is one issue retailers would bring to a Retail Tenancy Crisis roundtable proposed by the Australian Retailers Association.
Richard Evans, executive director of the ARA, said the association had called on Federal Ministers Craig Emerson and Chris Bowen to create an opportunity for retailers anxious about unviable leasing conditions to voice their concerns.
“The proposed Retail Tenancy Crisis roundtable would allow landlords and retailers to come together and work through long outstanding issues from Productivity Commission's (PC) Market for Retail Tenancy Leases final report (August 2008).
“The idea of a national register detailing all commercial lease terms (including inducements) is also supported by over 80 percent of retailers and would help restore some balance to the negotiation table,” Evans said, referring to an ARA Retail Tenancy industry poll conducted from 27 April to 4 May 2009.
General manager (property) of Bakers Delight, Gerry Gerrard, agreed a code of conduct for major shopping centres would be beneficial and a national register detailing commercial lease terms would arm retailers with vital facts required for fair lease negotiations.
“It is vital for retailers to stand their ground when negotiating lease terms and conditions but this requires a lot of quality data-gathering including comparable rents of other tenants in the vicinity, traffic data, sales growth and talking to other retailers.
“Under current leasing laws retailers can be forced to relocate, issue notices of decline for lease renewals and they can be prevented from having any options on a lease term. The single biggest challenge is ensuring rental costs reflect current trading conditions and a target (of rent as a percentage of turnover) must be set for lease withdrawal,” Gerrard said.