Credit: Tenancy agreement key and pen with symbolic miniature house
The Shopping Centre Council of Australia (SCCA) report that rental assistance discussions between shopping centre owners and SME retailers remain ongoing, with progress picking up after a slow start.
In total, more than 1400 agreements have been made between shopping centre owners and their SME tenants over the course of nine weeks from March to May, an increase of almost 20 per cent since the SCCA last surveyed its members.
“Rental relief is getting through to those who need it most,” SCCA Executive Director, Angus Nardi, said. “The increasing volume of agreements illustrate that the Commercial Tenancy Code of Conduct announced by the Prime Minister on 7 April 2020 is working, and our industry and SME retailers are reaching practical solutions to address the challenging economic circumstances.”
Nardi continued, “Pleasingly, nearly half (45 per cent) of the SMEs retailers that have requested rental relief have reached an agreement. But there is more work to do. The SCCA urges SME retailers to review the Code of Conduct, and come to the table with requests that are fair and proportionate to their circumstances.
“While the vast majority of conversations have been productive, there are instances where agreements are taking longer to negotiate,” Nardi added. “This is often as a result of a lack of documentation to support claims for rental assistance. Nonetheless, shopping centre owners are committed to reviewing and appropriately responding to every rental assistance request to ensure SME retailers can thrive as more Australians return to the shops.”
Most of the SMEs that reached such tenancy agreements include cafes, food catering, and takeaway retail and catering (26 per cent); retail services which include hair salons, nail salons, and shoe repair shops (21 per cent), and clothing and footwear (14 per cent) which were the sectors affected by the restrictions enforced to address the current COVID-19 pandemic.
So far, New South Wales (32 per cent), Victoria (29 per cent) and Queensland (23 per cent) account for almost three-quarters of the tenancy agreements that have been made so far. Other jurisdictions are expected to contribute more to the figures in the future as negotiations continue in light of the recent enactment of the Code of Conduct which makes tenancy arrangements applicable to all jurisdictions.
The progress in agreements comes as consumer confidence, foot traffic and store reopenings are on the rise, pointing to a possible improvement in commercial activities. This has been reaffirmed recently by the preliminary ABS Retail Data for May which recorded a 16.3 per cent increase.
Nardi stressed that shopping centre owners remain committed to enforcing health precautions and protocols and shall continue to monitor the latest government advice and developments to ensure the ongoing safety of shoppers and employees.