The Australian Competition and Consumer Commission has granted shopping centres the ability to discuss and implement rent relief measures for small to medium sized tenants.
According to the ACCC, the decision allows shopping centres to defer or reduce rents and other payments, waive interest, and extend leases where applicable.
ACCC lets shopping centres offer rent relief to help tenants
ACCC chairman Rod Sims clarified there is nothing in the proposal that would stop individual landlords from offering more generous concessions, but that the watchdog can object to any proposed agreements and revoke the authorisation at any time.
“Support for small and medium businesses in this difficult time will help the economy start up again when the pandemic has subsided,” Sims said.
The authorisation comes after the Shopping Centre Council of Australia and Scentre Group put forward an application to support their tenants through the COVID-19 crisis.
SCCA chairman and Scentre Group chief executive Peter Allen said it was important that industry bodies help small and medium sized retailers to get to the other side.
“Our aim is, in a proportionate and measured way, to share the financial risk and cashflow impact during the COVID-19 period,” Allen said.
“There is no one-size fits all approach to this situation. It’s going to take a lot of time to work through arrangements with our 2,600 SME retailers and their banks.”
Allen said Scentre Group’s leasing and support teams are already in contact with many SME tenants, and that the group will continue to “do the right thing and have one-on-one conversations” in order to tailor each response to reach retailer.
“Our message [is] to please keep talking to us and your bank and we will find a solution that is specific to your business,” Allen said.
While the ACCC and shopping centre bodies have been moving quickly to solve this ongoing issue, the Federal Government has been struggling to come to an agreement on how best to solve for the myriad stakeholders involved.
Rent reductions solely for COVID-19 impacted businesses
Prime Minister Scott Morrison said on Friday 3 March the government was hoping to release an industry code of practice for commercial and retail tenants, but that it was “not where it needed to be”.
While the code is not finished Morrison said that only virus-impacted businesses would be able to see rent relief, and that while there was a moratorium on evictions this did not translate to a moratorium on rent.
“If you’re just a tenant who hasn’t had a reduction in their business turnover, then your leasing arrangements stand. You should still be paying your rent to the landlord,” Morrison said.