Data released today by the Shopping Centre Council of Australia (SCCA) demonstrates the value of rental assistance extended to small and medium (SME) sized and non-SME businesses to carry them through COVID-19 related shutdowns amounts to $1.6 billion nation-wide. The Council has also released data on the value rental relief delivered by jurisdiction and business type. This is the third update the SCCA has released on Rental Assistance during COVID-19.
SCCA Executive Director Angus Nardi said: “The Council is releasing this data today to demonstrate the real dollar value of assistance that our members have provided to helping our SME and non-SME retailers, including under the Commercial Tenancies Code of Conduct. This is a direct financial contribution from our members to their retailers,”
“The $1.6 billion value of rental assistance is almost certainly the largest private sector commitment to helping small business, which is unlike deferrals of interest or repayments on loans,” Nardi said.
NSW and Victoria account for more than 64% of total agreements reached – noting these are larger markets and the Code was enacted earlier relative to other jurisdictions.
The largest level of rental assistance has been to cafés and restaurants (28% of total), followed by retail services such as hairdressers, beauty salons and nail bars (19.4%). These sectors account for almost half of agreements reached (47.3%) as they have been heavily impacted by government restrictions, and are often ‘small’ SMEs such as ‘mum and dad’ businesses.
Latest ABS Retail Trade data for June 2020 indicates strong growth, increasing 2.7% month-on-month and 8.5% year-on-year.
Nardi also said the $1.6 billion in rent relief was a larger financial contribution than the land tax concession schemes introduced by State Governments.
“Our industry has provided substantial rental assistance to both SME and non-SME retailers, however we are unable to continue to shoulder that assistance, and for that reason, are not in a position to support the Code of Conduct’s extension where the cost of doing so falls exclusively on shopping centre owners,” Nardi said.
“We have strived to strike a balance between helping those who need it while at the same time confronting our own financial pressures in the face of ongoing disruptions to regular trading to protect public health.
“Unlike others, our sector stands alone in having regulation require us to provide direct financial assistance to third parties, which must be financed from our own resources, which are now exhausted.
“Our industry remains committed to working closely and co-operatively with our SME partners, particularly ‘small’ SMEs (e.g. with turnover of up to $5 million), in the spirit for which the SCCA conceived the Code of Conduct in the first place with key retailer groups and well ahead of any government intervention.
“It is in our commercial interests as well as the broader economy that SMEs have longevity within our centres as they provide products and services our customers want and support local jobs.”
Nardi said all members of the SCCA were committed to continuing to work with SME retailers, particularly ‘small’ SMEs, in the spirit which the SCCA conceived and developed the Code with key retailer group and ahead of any government intervention.
“The SCCA conceived the Code of Conduct with key retailer groups, and government should take confidence that the industry can and will continue to work together, similar to our long-term successful industry Code for Casual Mall Licensing and which is chaired by former Australian Small Business Commissioner, Mark Brennan.
“We have proven our ability to manage a very complex range of negotiations on a case-by-case basis and our data demonstrates where the greatest need is for future government support for SMEs in the retail sector.”
SCCA members range from family-owned companies, superannuation funds, to listed trusts. All members of the SCCA are committed to working with Governments to support jobs and ensure that both centre owners and retailers can mutually benefit from a return to normal trading.