Sylvia Park landlord under fire

A small business in the health and wellbeing industry at Sylvia Park shopping centre has hit out at landlord Kiwi Property for not providing rent relief.

The tenant asked Kiwi Property to cut the rent in half during the lockdown but the big shopping centre owner has not agreed.

The tenant first asked Kiwi Property in late March for help with the rent and the response was that a number of tenants had made similar requests and it needed time to assess them and make a decision. Then it replied later last week with a standard letter to tenants reminding them of the obligation to pay the rent and suggested there might be a government rent subsidy soon. The small business owner has followed that up with a request for half of the rent to be waived during the lockdown but has no reply to that yet. Unfortunately the business owner does not have a clause in the lease which entitles the business to rent relief when there is no access to the premises in an emergency.

Kiwi Property made a more than $130m profit last year and other landlords were negotiating with tenants.

‘‘They are just trying to keep the profits up.’’ It was very shortsighted of Kiwi Property, the tenant said. ‘‘They should have contacted people and asked ‘how are you going’. I contacted them and got this general letter sent back. It’s pretty poor. I’m disgusted.’’

The tenant was earning a fraction of usual income working from home. Rent formed 65 per cent of monthly expenses.

‘‘So you are starting from scratch again. It’s hard to build income up again. We are not an essential service.’’

The tenant thought a 50 per cent rent reduction was reasonable given the business stored equipment in the premises in the mall.

‘‘I can last a couple of months. It’s expensive to have these premises in this mall. I might have to move somewhere else if worst comes to worst.’’

The lease with Kiwi Property was ‘‘terrible’’ and one-sided. The tenant had to pay all the legal fees if Kiwi Property had to enforce the rent.

‘‘It’s pretty loaded against the tenant.’’

Earlier this week Kiwi Property cancelled $55m of dividends to shareholders to preserve cash and said it could not quantify the impact of Covid-19 on its business.

Stuff asked Kiwi Property how its actions on rent relief fitted with its statement ‘‘During this time of unprecedented challenge, Kiwi Property is focused on ensuring the wellbeing of its people, tenants and customers, and protecting the longterm value of the company for investors.’’

Kiwi Property said in reply ‘‘We’re committed to working with our tenants to help them through this challenging period.

‘‘Unfortunately the letter we sent last week didn’t convey that and we’re sorry. We’re already in discussions with many of our tenants on temporary measures, including rent relief, to help them through this difficult time.

‘‘If any of our tenants are having issues with their rent, we encourage them to contact us about potential solutions.

‘‘We recognise the need to share a fair proportion of the financial risk and cash flow impact during the Covid-19 period, and are focused on balancing the interests of all of our stakeholders, which include small businesses and retailers right through to our mum and dad investors.

‘‘We also understand the Government is looking at potential measures around rental support and look forward to those being announced in due course.’’

‘‘It’s hard to build income up again. We are not an essential service.’’