Scott Morrison tells landlords to share retail pain

Scott Morrison has urged landlords to support the retail businesses that generate the rent to get through the virus crisis.

Prime Minister Scott Morrison. Picture: AAP

Landlords have been told to face up to tough conversations with their tenants about sharing the pain caused by the coronavirus right across the nation, with Prime Minister Scott Morrison urging them to support the businesses that generate the rent.

The extraordinary intervention takes in a broad sweep from malls to milk bars and comes as the federal government is finalising a third massive rescue package designed to bolster the economy and set it up for an eventual recovery after a period of “business hibernation”. Under the Morrison plan Australian businesses would “hibernate” while being shut down as they deal with COVID-19 and then reopen after the pandemic.

The scheme would see landlords make allowances for tenants in dire straits and make up for their losses in an eventual recovery, after sharing the current burden with their retailers who have been forced to lay off thousands of staff as they are forced to shut shops to meet tough distancing rules and as malls are deserted.

The Prime Minister said the aim was simply to preserve businesses and urged landlords to be supportive of tenants.

Mr Morrison questioned who would pay the rent if a shop in a local high street cannot keep open, asking: “If the landlord wanted to enforce (contracts) and kick them out and rip out their fit-out and do all that sort of thing, who do they think is going to move into the shop and pay the rent?”

He said it was sensible to understand the economic environment and come out the other side. “We want landlords to talk to their tenants … we want them to sort out arrangements that help them or get through,” Mr Morrison said.

But he also flagged some concessions for shopping centre owners. “Whether land tax will be relieved for those who have tenants in a distressed situation, all of these things are what we are having to work through,” he said.

The move comes amid a nasty spat between major landlord Scentre, owner of the Westfield empire, and billionaire Solomon Lew, who has dramatically closed all Premier stores and declared that he would not pay rent while the coronavirus crisis rages, with his move followed by chains including Adairs.

Other retailers, including Kathmandu and City Chic Collective, are also closing stores.

In this politically charged environment, shopping centre and retail property stocks were again punished on the ASX on Friday.

Amid the bitter rent battle, Mr Lew has launched a savage attack, accusing Westfield’s owner of twice failing to take action about coronavirus contact at a Queensland shopping mall.

Premier chief executive Mark McInnes accused Scentre of doing nothing when a case of possible transmission of the coronavirus at its Carindale mall in Queensland was brought to its attention.

“We have had two incidents in Scentre Group’s Carindale mall where our team members were exposed to COVID-19-positive customers. And in both instances, when Scentre was notified, they took no action,’’ Mr McInnes said.

“COVID-19 is a deadly virus and it is unacceptable for landlords to play roulette with the lives of retail employees and customers by not doing everything they can to protect them,” Mr McInnes said.

“We made the toughest decision to close our stores and stand down our team yesterday because we could not allow our team members, our customers and their families to continue to take the risk posed by our continued trading.’’

A Scentre spokeswoman said the company had responded appropriately and followed Queensland Health protocols. “The health and wellbeing of our customers, retail partners and people is our highest priority,’’ she told The Weekend Australian.

“In relation to Westfield Carindale, our retail partners and centre management followed the correct Queensland Health protocols. The Queensland Health advice was these individuals posed no risk to any customers, retailers or employees.

“As a precaution, the relevant retailers closed their stores temporarily for deep cleaning. Centre management also conducted additional cleaning. We continue to follow the advice of health authorities.”

Mr McInnes also asked retail landlords to detail the short- and long-term rental assistance they were providing to tenants, as well as details of visits to malls by people positively identified as having been infected with the COVID-19 virus who had visited malls.