“Technically, retailers ceasing rental payments and closing stores constitute a breach of their leases. Some tenants have raised health and safety concerns to justify closure, but that will depend on the individual circumstances.
“From a landlord’s perspective, no rent means no income. Landlords have ongoing overheads and obligations to keep shopping centres open for those tenants who are able to keep trading.”
Victoria will push for “landlords and employers as commercial tenants to be involved in the JobKeeper scheme” and has formed a close alliance with NSW throughout national cabinet deliberations during the coronavirus crisis.
Prime Minister Scott Morrison and state leaders will meet again on Friday morning to decide on the next stage of the economic response to the virus. No further health or social distancing restrictions are expected to be imposed. Measures to assist residential tenants and landlords will also be discussed.
Victorian Premier Daniel Andrews said the JobKeeper plan was “a very good one” both in scale but also the way it was designed to keep employees, employers and landlords connected to their businesses. The JobKeeper scheme provides a $1500 wage subsidy for each employee to businesses that have seen a 30 per cent drop in revenue. Similar measures could be considered for each landlord that keeps a business attached to their property.
“We want to make sure that we link to that through some of their concessions so that we’re not duplicating and so that on the other side of this they can go back to something approaching normal,” Mr Andrews said.
NSW is expected to focus on incentives including waiving or deferring land tax for landlords who agree to pass on savings to tenants and a moratorium on rent increases.
Industry figures released on Thursday showed commercial real estate investment has fallen sharply in the first three months of 2020, dropping to $3 billion, which is down 81 per cent quarter-on-quarter from $15.9 billion in the final three months of last year.