Today The National Retail Association NRA welcomed the announcement by the Prime Minister, saying the National Tenancy Framework strikes a sensible balance between the interests of tenants and landlords and would maximise the chances of small business survival.
Under the framework, businesses suffering a major downturn as a result of COVID-19 will be eligible to have their rents reduced by the same proportion as their revenue has fallen. This rental reduction will be a combination of at least 50 per cent rent waiver and a rent deferral.
Businesses will have a minimum of 12 months after the downturn to pay the deferred rent. The Prime Minister also urged financiers to support property owners who would be affected by the new rules.
NRA Chief Executive Officer Dominique Lamb said while she had not yet had time to fully review the code, the changes described by the Prime Minister would help ensure the economic pain was not focused solely on small retail businesses.
Ms Lamb also welcomed Scott Morrison’s call for banks to support shopping centre owners through the crisis.
“There are no simple answers to these challenges, and all players in the business tenancy space will need to rely on each other to make it through,” Ms Lamb said.
“The model announced by the Prime Minister today is sensible and proportionate. It will ensure – to the greatest degree possible – that businesses who suffer a major downturn have the best chance of surviving.
“And that is good for both tenants and landlords. Just as we want to see businesses survive to keep employing their staff, property owners will also want to see the retail sector survive.
“Thousands of vacant stores at shopping centres across the nation will be of no use to landlords when we get to the other side of this crisis.
“Occupied stores with functioning businesses will be the key to recovery for all players in the sector. That’s why we believe this package has struck the right balance.”