Retail landlords told to work with tenants to avoid mass insolvencies
Retail NZ said landlords who don’t work with tenants during the COVID-19 crisis will push many struggling retail businesses into insolvency.
Retail NZ chief executive Greg Harford said there are landlords who are doing their best to work constructively with tenants and praised them for their efforts, especially those offering rental holidays or reduced rents to help tenants navigate through the crisis.
But, according to him, there are some landlords who are refusing to engage on the issue, insisting that full rents remain payable as contracted before the coronavirus crisis emerged.
“Refusal by landlords to negotiate will tip many retail businesses into insolvency, costing jobs and ultimately depriving landlords of their tenants,” Harford said.
Harford said these are extraordinary circumstances and that everybody needs to pull together as a nation to work through the crisis.
“Retail NZ is calling on landlords to engage constructively with those retailers who have been negatively impacted by Covid-19, and to work with them to find a solution that works for all parties,” he said. “This may include a rent holiday, a temporary reduction in rents, and flexible payment terms.”
He added that landlords are not responsible for the collapse in sales that many retailers are recording, but they are in a position to help.
“Rent is typically the second largest cost for a retail business, and they have been steadily increasing over time, while net margins for retailers have been declining,” Harford said. “The current COVID-19 crisis is seeing many retailers at a point where previous rentals are simply unsustainable for many retailers who are seeking rent relief from their landlords.”
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