ARA calls for restricted turnover figure access for landlords

By Chris Nicholls

SYDNEY: The Australian Retailers Association (ARA) has called for reduced access to tenants’ turnover figures for landlords, arguing current legislation favoured the landlord excessively.

Australian Retailers Association executive director, Richard Evans, said the while there was little wrong with the various states’ retail leasing acts themselves, the implementation of them and the conduct of some leasing agents were problems.

“They [the landlords] understand what the turnover figures are, they understand how leveraged the small retailer might be, and therefore they are able to understand how much money they can, in fact, ask a retailer to pay.

“A lot of these regional centres are pushing for increased rents and that creates a major issue for smaller retailers who aren’t able to absorb the increases,” Evans said.

“We’re … pushing for the non-disclosure of turnover figures, or at the very least, turnover figures going to a third person, who can then release the information to those that want it, but is not specific to a retailer.

“The landlords aren’t doing anything wrong – they’re just trying to get the best return for their stakeholders – it’s just the practices as to how they go about asking these rents and what they’re based upon.

“It seems to us they have a monopoly in each location.”

He said the ARA was also looking for a code of conduct for retail leasing agents, who “may, in fact, be acting unconscionably, but it’s very difficult to prove.”

Evans referred to a similar agreement in place in the franchise industry.

He said the problem was worst with large shopping centres, as strip mall retailers could move to nearby premises without affecting customer sentiment, but those in shopping centres could not.

The ARA also called for greater clarity in leasing arrangements regarding end-of-term arrangements.

“There’s no guarantee at the end of term that there’ll be a new lease offered, and I think some people fall for the trap that they think or assume that they’ll be offered a new lease at the end of five years, and sometimes it doesn’t happen,” he said.

“For the smaller retailer, where they’re invested in their retail store and supported by security of their own house and other assets, it becomes a significant power play that landlord has against the smaller retailer.

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