Shopping centres and retail bodies reach COVID-19 agreement
Shopping centre owners and key national retailing bodies have reached a deal to negotiate behind closed doors about how they will confront the fallout from coronavirus, with unilateral walkouts by tenants threatening to tear up their leases taken off the table.
The move marks a significant shift after a week marred by a headline-grabbing spat between billionaire retailer Solomon Lew and Westfield owner, the Scentre Group, after Mr Lew’s Premier chain closed its shops and accused centre owners of putting shoppers’ health at risk.
Peak industry groups have now agreed to the bulk of principles unveiled by Prime Minister Scott Morrison for dealing with the impact of coronavirus on malls, but ruled out an initial position that would have allowed tenants to walk away from leases by citing virus-related financial distress.
But mall owners have bowed to demands they come to the table to see tenants through the worst of the crisis and help get them back on their feet.
Shopping centre companies remain under pressure, with credit ratings agencies downgrading their outlooks and stockbrokers slashing their price targets, although most say rescue raisings will not be required despite their depressed share prices.
Mall owners are bracing not only for months of little income but also for extensive rental reductions, including small specialty shops paying about 20 per cent less, at a time when anchors such as Myer are expected to drastically cut their floor space.