Australian Retailers Association also in talks with Victorian and NSW governments for help after tens of thousands of workers laid off

This article is more than 5 months old

This article is more than 5 months old

Representatives of the retail and shopping-centre industries are locked in talks about rent payments amid increasing pressure on landlords to slash or waive payments during the coronavirus crisis.

The Australian Retailers Association (ARA) executive director, Russell Zimmerman, said his organisation was also in direct discussions with the Victorian and NSW state governments following the announcement by the prime minister, Scott Morrison, on Sunday of a ban on landlords evicting crisis-hit tenants.

Zimmerman said talks with the Shopping Centre Council of Australia (SCCA) were “amicable” but some other large landlords were taking what appeared to be an unreasonably hard line.

“It’s fair to say that the SCCA and the ARA are really trying to work together to get the best outcome for the industry,” he said.

A SCCA spokesman said the negotiations were “constructive”.

Australia coronavirus shutdown: what is open, closed and banned under the current rules? Read more

But Zimmerman said one “large landlord” has refused to reduce rents and demanded tenants provide a forecast cashflow for the next six months.

Retail has been smashed by government restrictions on movement imposed to try to fight the spread of Covid-19, with tens of thousands of people across the sector laid off over the past week as major chains including Myer and Country Road, together with large numbers of smaller operators, closed their doors.

Furniture chain Nick Scali became the latest to close on Monday, standing down hundreds of employees until at least 1 May.

Billionaire retailer Solomon Lew’s Premier Investments, which owns the Smiggle stationery chain and a clutch of women’s clothing brands, has picked a fight with landlords by publicly stating it will not pay the rent on its stores while closed.

But Guardian Australia understands that many of the other companies to shut up shop over the past week have also quietly stopped paying the rent.

Retail and hospitality sources suggest that while large landlords have an understanding of the economic reality confronting their tenants, smaller landlords are having difficulty coming to grips with the fact that rents cannot be paid.

Zimmerman said many retailers simply could not pay. “The problem is that retailers have got no cash at the moment because there’s none coming in.”

There were a number of different ways of dealing with a rent reduction, Zimmerman said.

“Some retailers might be looking for a reduction. Some might be looking for an abatement, and they pay it at the end. Maybe the rent could be paid over two years as a small rent increase.”

State governments will need to legislate to ban evictions, but in the meantime the government has acted through the banks to give landlords an incentive not to kick out delinquent tenants.

Both ANZ and Westpac on Monday extended the availability of concessional loans under a federal government-backed program to businesses that have borrowed as much as $10m – but on the condition they not evict tenants whose operations have been hurt by the coronavirus pandemic.