The tenants pushed in their letter for a three-month rent holiday, then reduced rent after that. They said they wanted to work “collaboratively and cooperatively” with their landlord to survive the crisis. If the pandemic went longer than that they asked for an extended rent-free period.
The giant Chadstone complex is half owned by rich-list billionaire John Gandel’s Gandel Group and half by the the ASX-listed Vicinity.
In a letter of response to tenants, Chadstone management asked for further sales information before considering the request for a rent holiday, but did agree to defer rent payments for March and April. At this stage it plans to still charge the rent, but at a later date.
“As you know, this is an unprecedented time and we are looking at ways to continue to support our retailers,” the letter from Chadstone management said.
A Vicinity spokeswoman said they did not generally comment on negotiations with tenants and Vicinity chief executive Grant Kelley said in a statement that, along with government and industry groups it was working to support the retail industry.
“We are continuing to work directly with our retailers on a case-by-case basis during this period,” he said. “We are focused on supporting all of our retailers however we recognise that our [small and medium enterprises] and family-run retailers may not have the depth of financial support to continue to do business in these unprecedented circumstances and may be experiencing hardship.”
The growing public health crisis from the coronavirus, as well as the responses to it, have led to a sharp economic downturn with concerns about a significant rise in unemployment.
As of Tuesday about 10 per cent of retailers at Chadstone had closed, Vicinity said, mostly due to stage 1 restrictions on trade which included the closure of cinemas and gyms.
The number of closures will increase with the next stage of restrictions to be implemented from midnight on Wednesday. This includes the closure of businesses including massage, nail bars, laser clinics and waxing salons. Food court seating areas will be closed but operators can still offer takeaway.
Tenants at Chadstone said trading conditions had already been dire before the next round of restrictions took effect.
“For small retailers and traders like us, trading conditions could not be any worse. Our financial hardship could turn catastrophic as we depend entirely on foot traffic for our financial survival. We are in a financial crisis that none of us have been through before.”
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Ben Schneiders is an investigative journalist at The Age and has reported extensively on wage theft, corruption, business, politics and the labour movement. A three-time Walkley Award winner, he has been part of The Age’s investigative unit since 2015.