sydney cbd
The code was originally introduced last year. Image – Canva.
  • According to the Property Council, $15B in support to tenants was provided by the commercial property sector
  • Luke Achterstraat has called for measures to target genuine small businesses - turnover up to $5M
  • Argues some tenants receiving support generated significant profits on the back of JobKeeper

With the New South Wales government reintroducing mandated rent waivers that will remain in place until next year, the Property Council of Australia (PCA) has voiced concerns.

The PCA noted that even though the commercial property sector provided $15 billion in support to tenants in 2020 it is now faced with restrictive government intervention.

Luke Achterstraat, NSW Executive Director of the PCA, said already in 2021 that large commercial owners were demonstrating support well above the requirements of the 2020 code.

“Our members recognise the importance of supporting their tenants and are overwhelmingly acting to ensure their tenant’s viability through this lockdown to those in genuine need, on a tailored case-by-case basis,” Mr Achterstraat said.

“This one-size-fits-all intervention is a blanket approach in a challenging time when targeted support for those in genuine need is better suited. Government intervention in contracts not only risks the existing commercial relationships, but it also harms the potential for the economic recovery of the state on the back of this lockdown.”

Mr Achterstraat added that the announcement imposed an unfair and costly burden of government-imposed lockdowns on the sector.

“Many commercial owners are still providing ongoing support to tenants affected by the 2020 lockdowns, with considerations in place. This intervention convolutes those existing hardship arrangements further and fails to recognise the generous support that has been and continues to be provided.

Luke Achterstraat
Luke Achterstraat. Image – LinkedIn

“Under the last iteration of the code small mum and dad owners were left with the mortgage payments and no retirement income, while some tenants recorded profits on the back of JobKeeper.”

Luke Achterstraat, NSW Executive Director

He called for support that targets genuine small businesses – a turnover of up to $5 million – noting that current policies support businesses with a turnover of up to $50 million, and said he did not want the code to outlive the lockdown period.

“Let it be clear that the return of the code must have a timeframe and should not extend past the current lockdown.

“Going forward, governments will have to wean themselves off intervening in contracts, hurting commercial relationships. Commercial owners are integral to the fabric of vibrant and functioning cities and businesses, with their own financing and commercial obligations to meet.”

Mr Achterstraat concluded that the Property Council will continue to work closely with the NSW government in terms of designing the enabling regulations.

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