Rich Lister warns retail landlords 'not out of the woods yet'
Chadstone Mall ready to receive the influx of newly released Melburnians.

Rich Lister warns retail landlords 'not out of the woods yet'

The Gandel family’s Point Leo Estate restaurant this week received 600 bookings within an hour of the Victorian government’s announcement that lockdown restrictions were to ease, but the retail real estate magnate is not jumping for joy yet.

Even as shoppers celebrated their newfound freedom, flocking back into flagship CBD stores and major Melbourne malls on Wednesday including to the country’s biggest, Chadstone, which is jointly owned by Mr Gandel and Vicinity Centres, the veteran investor and Rich Lister is keeping a weather eye for the challenges still swirling around the sector.

“We’re not out of the woods yet,” he told The Australian Financial Review.

Top of mind for Mr Gandel is the extension of arrangements allowing for a rent relief scheme for small and medium-sized commercial tenants until next year. But the scheme, set in motion by the federal government and then put in place by state governments, has meant investors and landlords have borne significant financial pain.

Some large retailers such as the Solomon Lew-led Premier Investments, which are not governed by the rent relief scheme, have infuriated landlords by opting to pay little or no rent or demand deals on their own terms.

“It’s been a debacle with the landlord and tenant situation. I don’t think it’s a fair situation that has happened,” Mr Gandel said.

With the situation for both retailers and landlords remaining vexed, Mr Gandel said he would “lose a packet” during the disruption and was looking forward to the end of the extended scheme in March next year when normal lease arrangements would become binding again.

“It is still a big schemozzle. With everything that has been going on, I just say to myself I just want to get through,” he said.

Mr Gandel also worried over whether the state’s much-criticised contact tracing system was up to scratch after its overhaul by the government.

“What annoys me a little bit is the lack of attention that seems to have been given – I’m talking mainly Victoria but elsewhere as well – to one of the key items in what may help us and that is the contact tracing system.

“If they can get the tracing right, then we have a chance. If we can’t get the tracing right, then the thing seems to spread so rapidly that within five minutes it goes everywhere.”

Also of concern is the impact on the economy and the retail sector as government support measures fall away and both households and small businesses come under greater pressure. Nevertheless, Mr Gandel said he was “not pessimistic about retail itself” and took heart from the fact that foot traffic had rebounded quickly the last time the lockdown was lifted in Victoria.

“That is a good sign. I think they [shoppers] will have plenty of money to spend in the short term, but whether, as it goes on, it gets better or worse, I’m not sure.”

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