Leasing inquiry reveals discord

NATIONAL: A national inquiry into the Australian retail tenancy system has already highlighted deep divisions between retailers and landlords.

Inquiry administrator the Productivity Commission claimed the purpose of the Federal Government initiative was to examine the structure and functioning of the retail tenancy market in Australia, including competition, the economic function of tenancies, information asymmetry between tenants and landlords and the viability of rationalising legislation across all states and territories.

According to John Brownsea, executive director of South Australia-based National Independent Retailers Association (NIRA) the most serious issue for small retailers was burgeoning rental costs.

"You've got rental increases commonly reaching 25 per cent and the shopping centre managers justify it by saying 'there's a property boom on. The value of centres has gone up so you as a tenant must pay for it.' It's not just the centres though. They lead the way but it has a knock-on effect to all retail landlords.

"Why shouldn't any young lady who's been to TAFE and wants to set up a fashion store have an idea that there's a future out there for her?" Brownsea said, adding the inquiry was a "last chance" for retailers.

"The problem is that many have lost interest in arguing. But if they don't speak up now the landlords will have won."
Fashion retailer M Webster Holdings (MWH) - which owns the David Lawrence, Jigsaw, Marcs and Morrissey brands - cited lack of transparency as an acute problem in Australia.

"There is certainly an imbalance over who discloses what to whom, with retailers obliged to disclose all details of their businesses to centre managers, while the same courtesy is not extended the other way," said MWH chief executive Rory Scott.

He insisted this did not reflect MWH's own "very positive" relationship with landlord Westfield.
Meanwhile Milton Cockburn, executive director of the Shopping Centre Council for Australia (SCCA) claimed it had "nothing to hide" from the inquiry, adding that national regulation unifying all states and territories would be a positive outcome.

"Certainly for national fashion retailers it's a source of frustration that you've got eight different pieces of legislation to comply with across Australia," he said.

The Productivity Commission has urged industry stakeholders to submit their intention to participate in the inquiry by July 27.

By Belinda Smart