After initially proposing a national Code of Conduct for retail leasing last month, Australia’s key retail industry groups have welcomed the Prime Minister Scott Morrison’s commitment to their cause.
Last week Morrison announced the Code of Conduct targeted at SMEs, which strikes a sensible balance between the interests of tenants and landlords and would maximise the chances of small business survival.
Under the framework, businesses suffering a major downturn will be eligible to have their rents reduced by the same proportion as their revenue has fallen. This rental reduction will be a combination of at least 50 per cent rent waiver and a rent deferral.
Businesses will have a minimum of 12 months after the downturn to pay the deferred rent. The Prime Minister also urged financiers to support property owners who would be affected by the new rules.
The model works well for both landlords and tenants, says National Retail Association (NRA) CEO, Dominique Lamb.
“Just as we want to see businesses survive to keep employing their staff, property owners will also want to see the retail sector survive,” she adds.
Australian Retailers Association (ARA)’s Russell Zimmerman iterates that the industry groups will work together to ensure the code is applied and followed.
“The most important issue is that the industry is talking, and landlords and tenants are working together to ensure business continuity.
“We look forward to working with the NRA, Pharmacy Guild and SCCA as we are all working towards the same goal―to emerge from the other side of this unprecedented experience with our retail partners especially our SMEs in the best possible position to succeed ,” says Zimmerman.
Indeed, says the national president of the Pharmacy Guild of Australia, George Tambassis, it is about sitting down and working out an agreed course so that we can all get through this together, and with normal business and employment able to resume.
Shopping Centre Council CEO Angus Nardi adds that a lot of the principles under the code the SCCA has already agreed to, including publicly and independently committing to not terminating leases for the non-payment of rent a few weeks ago.
“The SCCA’s key focus is on small, medium and family businesses,” he explains.
“Every day, our members are having hundreds of conversations with their retailers. Like many other industries, centre owners are receiving high volumes of requests for assistance. These are being worked through as quickly as possible.”
In the meantime, all groups look forward to working with states and territories on regulation, particularly to ensure a uniform approach.
“All of our groups engaged on retail lease legislation across the country, and we look forward to the next stage of work. We call on states and territories to work together to ensure a uniform approach and efficient application,” Lamb concludes.
