23/09/2010 - 00:00

Lease register off target: RTA

23/09/2010 - 00:00

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A STATE government proposal to establish a register of retail shop leases will create security, competition and privacy concerns for established shopping centre tenants, the Retail Traders’ Association says.

Lease register off target: RTA

A STATE government proposal to establish a register of retail shop leases will create security, competition and privacy concerns for established shopping centre tenants, the Retail Traders’ Association says.

Early this week Commerce Minister Bill Marmion released a position paper to gauge industry reaction to the establishment of a register of retail shop leases as part of the state government’s attempts to better protect shopping centre tenants.

The paper proposed for landlords to maintain a register for all premises in a shopping centre, even if the lease for the premises is not classed as a retail shop lease.

Landlords would be expected to include matters such as the address of the shop; details of the parties to the lease; rental value of the premises; lettable area; details of incentive payments or rent free periods; and details of the basis upon which outgoings are determined.

Access to the registers would be limited to other tenants in the shopping centre, potential tenants and valuers appointed by tenants or prospective tenants.

Mr Marmion said recent reviews of retail tenancy legislation had raised tenant concerns about the lack of access to meaningful information surrounding leases.

“Some landlords, agents and tenants are reluctant to provide information on the terms of their leases, making it difficult for other tenants to make comparisons about what is on offer in the marketplace,” Mr Marmion said in a statement.

But Retail Traders’ Association executive director Wayne Spencer told WA Business News said he did not think Mr Marmion’s proposal took security and privacy into consideration, instead recommending limited online search protocols for the comparison of shopping centre leases.

“There is another way to do it, and if you’re going to spend a few bucks, you might as well spend it in the right direction,” Mr Spencer said.

“If they set it up online like you can do with Landgate with land titles, then the information can be very easily fed into that website, but the security protection is there.

“In other words if I am a prospective tenant for Karrinyup for instance, and I am going into menswear, I can go into Karrinyup and get the average menswear rent in the centre.

“I can also check rents at Carousel or Garden City to check the same scenario for them, and that way I have information that can give me the market rents that are happening and that gives me something to bargain with.

“It’s not the actual registration of leases that is the thing that we as retailers are after; it’s actually the key information inside those leases.”

Mr Spencer said the Retail Traders’ Association was particularly concerned with the competitive advantage of established shopping centre tenants being eroded with the establishment of the lease register.

“There is some business advantage that would be declared, in the way they have negotiated things that tenants wouldn’t necessarily want their opposition to have access to,” he said.

“I think that’s got to be taken on board, otherwise we’re going to finish up with something that just doesn’t work.”

The lease register is the latest in a series of reforms the state Liberal government has unveiled over the past year in its efforts to create a more equitable retail environment.

Last September, then Commerce Minister Troy Buswell introduced legislation to parliament that addressed an information imbalance that can occur between landlords and tenants.

The reforms introduced by Mr Buswell included requiring landlords to include additional information in disclosure statements provided to tenants; protecting tenants’ rights with respect to renewal options and centre redevelopments or relocations; improve tenants’ negotiating power by prohibiting landlords from passing on legal fees; and requiring landlords and tenants to supply valuers with relevant leasing information.

 

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