Vicinity slaps Myer with lawsuit over $4.2m unpaid rent
Shopping mall giant Vicinity Centres is suing key department store tenant Myer over $4.2 million in unpaid rent at its flagship Bourke Street store in Melbourne.
The $8.1 billion ASX-listed landlord has launched legal action claiming Myer failed to pay outstanding rent at its premium Bourke Street emporium from May to October, a period that partly coincides with Melbourne’s most recent lockdown.
Neither Vicinity nor Myer would comment about the legal dispute as the matter was before the courts, but Vicinity is understood to have sent Myer two notices demanding payment last month.
The rental dispute is the latest pandemic-induced fight between retailers and landlords.
Rival mall giant Scentre Group last year locked out Noni B owner Mosaic Brands from 167 stores in its centres in a spat over rent payments. That matter was eventually settled out of the courts.
Vicinity’s dispute with Myer will pile pressure on the retailer which is already facing a long-running hostile campaign to overthrow its board by veteran retailer Solomon Lew.
Mr Lew’s Premier Investments, which owns Just Group, Smiggle and Jay Jays, was a trenchant critic of landlords during the pandemic, refusing to pay rents at some stores.
Vicinity reported at its annual general meeting on Wednesday that malls in the larger states of NSW and Victoria had been hit hard by the enforced lockdowns, although it said shoppers are coming back in the lead-up to Christmas.
Staff shortages, excess and changing seasons in NSW and Victoria, along with higher costs and freight distributions were placing pressure on tenants, it said.
Overall, for the three months ending September, total portfolio retail sales were down 25.7 per cent relative to the same time in 2020, but rose 7.1 per cent across the less impacted states.
Vicinity chief executive Grant Kelley called the quarter “challenging” with the prolonged lockdowns in NSW and Victoria impacting the performance of the portfolio.
“However, retail sales across the COVID-normal states remained strong, and we are delighted with the rebound in visitation in NSW and Victoria, as restrictions started to ease in October,” he said.
“We are optimistic that positive momentum will continue in the second quarter of the 2022 financial in the lead up to the holiday period and with the resumption of interstate and international travel, but we nevertheless maintain a level of caution with the expected expiry of the respective SME codes of conduct, currently in effect in NSW and Victoria, in January 2022.”
Due to ongoing uncertainty resulting from the COVID-19 pandemic, Vicinity continues to withhold earnings guidance for this financial year.
Vicinity securities closed 2.2 weaker at $1.73.
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