Coronavirus rent discord sends REITs tumbling

The failure of shopping malls owners and their tenants about how to best handle coronavirus fallout has sent REITs tumbling.

Empty mall at Burnside Village Shopping Centre. Picture: AAP.

Shares in listed real estate investment trusts have fallen dramatically after shopping centre owners and their tenants failed to reach a final agreement on how to handle the fallout from the coronavirus.

Despite the parties formulating a package early in the week that was unanimously endorsed by key bodies including the NRA, ARA, Pharmacy Guild and Shopping Centre Council of Australia that went to the federal cabinet on Friday a deal could not be struck, with an announcement pushed back to as late as Tuesday.

Prime Minister Scott Morrison said on Friday that there was further work to be done on what would become a binding code for landlords and their tenants, with legislation to be undertaken by states and territories.

Mr Morrison flagged the danger for those able to reach an accord of being “left out in the cold” and while calling for mediation said the government’s focus was on ensuring that small to medium enterprises which had suffered dramatic falls in their businesses were treated proportionately by landlords.

Mr Morrison said that major landlords and retail chains should be able to work out their differences.

But the lack of agreement has seen the share prices of retail landlords again fall heavily, with Stockland down by 9.7 per cent, Mirvac down by 7.1 per cent and Westfield owner Scentre down by 5.7 per cent in early afternoon trade. Vicinity Centres was also off by 5.6 per cent and GPT was down by 3.6 per cent.