While the Australian Government’s actions during the peak of the pandemic led to the country having a far, far lower total impact compared to other nations, the choices it made weren’t without its consequences – especially to patrons of the retail industry.
Halting people’s movement meant more people were safe from transmission of the virus, but also led bricks-and-mortar stores to see footfall plummet. Forcing non-essential businesses to shut down kept people from needing to leave the house, but also led many businesses without a steady income from sales.
And when this was all happening, the age-old debate around bricks-and-mortar rents flared up. Why should retailers need to pay rent for space in a shopping centre, asked many retailers, when it can’t be open and customers can’t shop there?
Comac Retail Property Group, is a great example of the added value provided by shopping centres during these times. Comac Retail Property Group is an independent Retail Agency that provides quality retail property management services and tailored solutions to their landlords, tenants and suppliers to build sustainable partnerships.
Comac Retail Property Group is the agency working on the upcoming Yamanto Central, as well as a number of other great assets across various states and in New Zealand. This meant that during Covid they had to be on the front foot and develop a number of strategies relevant to each state and country (Australia and New Zealand) to assist both landlords and tenants during restrictions.
“In New Zealand for example, when the Government announced their full lock down, we worked with our landlord and were able to immediately abate full net rent the same day as the announcement. This took out all that heat, that stress, that worry for our retailers. It was gone,” Comac Retail Property Group Managing Director Michael Haddrick said.
“It was great [for our tenants], and as it happened that first lockdown in New Zealand only lasted six weeks, which meant the financial stress on the landlord was mitigated, and the goodwill that the landlords received from tenants for appreciating their position from day one [was priceless].”
However, it wasn’t as easy as just telling each tenant they didn’t need to pay rent, of course, there was a lot of administration work required and the integration of changes into our financial system to allow for these abatements. But it was all worth it to keep our tenants alive, Haddrick said.
Queensland and Victoria where much harder to navigate but the introduction of the Code of Conduct by the Federal Government was like a pressure valve release that allowed us to focus on clear solutions. Through our intimate knowledge of our tenants businesses and each of our clients key drivers we were able to table solutions for each tenant with well supported recommendations to our landlords that resulted in speedy resolutions.
“More often than not our clients agreed to implement assistance that was in excess of the Code in order to keep centres open, keep the lights on, keep activity up, and to keep people afloat” Haddrick said.
“We were also very aware that the effects of Covid weren’t just financial for our tenants and we compiled a comprehensive Covid-19 Resource Guide that provided information and direct links to access Government economic assistance, Covid health information, mental health support services, family violence assistance and information on how to manage their own and their employee’s wellbeing during lockdown. If the tenants needed additional help, specifically with grants, we enlisted accountants and in some cases we paid for that.”
So, how is 2021 shaping up?
And while the worst of the pandemic seems to be behind the industry, there’s no doubt that business isn’t quite back to normal yet, and in 2021 Comac Retail Property Group is still doing what it can to support its retailers.
Click-and-collect and deliver-from-store have acted as lifelines for many businesses through the last few months, as customers increasingly wish to spend as little time as possible in crowds. A trip to the shopping centre seems far less intimidating when a customer knows they can simply turn up, grab the product they’ve already paid for, and get out.
“But more and more that’s becoming less and less of an issue. Our centres are really getting back to normal and, in fact, are trading up. People are staying closer to home and supporting their local retailers. Our supermarkets continue to thrive and our independent fresh food retailers have experienced incredible growth.
“We’re currently leasing a greenfield development, Yamanto Central, in South Ipswich and the increased inquiry rate post-Christmas for national retailers has been really strong. So, the bounce-back has been great so far.”
One reason for that are the positive consequences of Covid or PCOC as I like to tell our team, Haddrick said.
Rethinking how a business works
One of the key things that Haddrick has observed with the retail businesses that survived and thrived in the difficulty of the last year is a willingness to throw caution to the wind and innovate. Those retailers that adapted and implemented new business ideas that they had probably been thinking about for awhile but hadn’t had the time to implement or were previously put into the ‘too hard’ basket, were the winners from the pandemic.
“A lot of business opportunities that might previously have been delayed, tenants suddenly had the ability to say ‘today is the day we implement that new point of sale system, completely revamp our menu or find ways to better service/sell to our customers’,” Haddrick said.
“The ability for retail businesses to be so innovative and proactive was fantastic and those that did thrived during Covid, and we did this within our own business as well.”
During the last year, Comac Retail Property Group reviewed its own suppliers, internal processes and identified opportunities for cost savings. They also kicked off a partnership with SME-bank Judo.
To Haddrick, the bounce-back of businesses after Covid-19 is completely unlike what happened after the GFC.
“We started our annual AFL Grand Final lunch event post the GFC as people were frightened of losing jobs, there was lots of instability and it was just not a fun environment. Now,12 years on there has been a complete change in sentiment and post Covid we understand and appreciate what we’ve got. Our job/employer, our staff and their wellbeing, our local retailers, cafes, restaurants and pubs and most importantly our families. What a change. It’s been quite amazing.”