From rent war to vaccine battle: landlords and retailers at loggerheads

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Christmas alarm bells are jangling about a brewing vaccination battle between mall owners and retailers as pandemic-weary shopping centres prepare for the arrival of Santa Claus.

With malls nationwide likely to open by Christmas, just in time for a “revenge spending” shopping spree, retailers and landlords are on a collision course over who is responsible for managing the proof of vaccination process.

A standoff is brewing between retailers and landlords over who is responsible for managing the proof of vaccination process when malls reopen.Credit:Steven Saphore

On one side there are the retailers, spearheaded by billionaire Premier Investments chairman Solomon Lew, who has called for precincts to reject unvaccinated shoppers and mall owners to install health checks at entrances.

“People will stop visiting malls unless there is safety,” he said last week.

On the other side are the landlords, who are less than thrilled about the prospect of being lumped with the responsibility of vetting shoppers’ vaccination status. A standoff is brewing, and the lack of clear government guidelines is compounding the uncertainty.

The row comes as the NSW announced that businesses in the state would be responsible for taking “reasonable measures” to stop unvaccinated people entering their premises and after the Victorian government mandated vaccines in a range of industries.

The new round of hostilities also follows a bruising encounter at the start of the pandemic last year when struggling, COVID-hit store operators skirmished with landlords over excessive rents.

Now those same retailers are questioning if shopping centre owners have their heads in the sand on another difficult issue: how to handle vaccine mandates.

The landlord’s peak body, the Shopping Centre Council of Australia (SCCA), skirted the issue entirely last week when it issued a breezy statement confirming “Santa Claus is coming to town,” that spruiked the industry’s COVID-preparedness plans.

“The SCCA and industry has detailed industry COVID-safe plans and guidance on issues such as general operations, food courts, children’s rides, the wearing of face masks and Santa photos,” it said.

The two-page set of reopening protocols did not mention vaccination status once, making only the broadest of references by saying that centres would monitor and follow any relevant public health orders.

Indeed, the big ASX-listed landlords appear wary of engaging in another gruelling fight with retailers, ably led by the heavy artillery of Mr Lew, Australia’s largest retail tenant.

It is extremely challenging for all parties, from both a government, a retail and an ownership point of view.

Mr Lew has softened his stance somewhat, offering to split between retailers and landlords the costs of policing doors. However, the question of whom the responsibility falls on remains vexed.

Mr Lew and other retailers are arguing it would make little sense for every store within malls to have their own COVID marshalls or security guards, saying it would lead to chaotic queuing and congestion. But, as the malls rightly point out, many shopping centres include essential retailers like chemists and supermarkets, which they can’t ban unvaccinated people from entering.

Australia’s largest retail landlord, the $15.3 billion Westfield mall owner Scentre Group, has already put its foot down, adamant the responsibility lies with retailers.

“Some of our retailers may be in categories or industries where vaccination is mandatory for a period and vaccination certificates will be required to access certain services or activities,” a spokeswoman said.

“Retailers are accountable for ensuring they are compliant with any of these government requirements.”

Others are more cautious. The country’s second-largest mall manager and co-owner of Melbourne’s Chadstone shopping centre, Vicinity Centres, said it didn’t have anything to add to questions from The Age and Sydney Morning Herald on how it would navigate the proof of vaccination issue, or whether it would consider closing its doors to unvaccinated shoppers.

Another large ASX-listed shopping centre developer, Stockland, said it was “closely monitoring the level of vaccinations across the country” and would follow health advice, but it would not be drawn on who was responsible for policing vaccination.

Graham Terry, the managing director of RetPro, which manages many shopping centres and advises on retail matters, said the industry was effectively in stasis waiting for government directions, with little chance of any agreement being hashed out before then.

Solomon Lew has called for precincts to reject unvaccinated shoppers and for mall owners to install health checks at entrances.Credit:Paul Jeffers

“I tend to agree with Solly, it is very difficult for retailers to manage and also difficult for centres to manage,” he said. “But it is extremely challenging for all parties, from both a government, a retail and an ownership point of view.”

“It’s got to be regulated by the government somehow, but we’re in very uncharted waters. You’ve got to protect people who are vaccinated while also respecting people who don’t want to be vaccinated.”

Meanwhile, some retailers are preparing to take enforcement into their own hands. The Age and The Sydney Morning Herald understand at least one major national retail chain is gearing up to place security guards at all store entrances who will be trained to de-escalate any potential disagreements with unvaccinated shoppers.

But others remain in stasis. A spokesperson for department store giant Myer said the retailer was waiting on government and health advice on vaccinations. Mike Schneider, managing director of hardware store Bunnings, said the business was still in the dark from various state governments and called for a national, unified approach.

“We are continuing to actively seek guidance from governments across all states and territories to understand the requirements of different vaccination passport programs, and the implications for our team and customers,” he said.

“We would welcome a consistent approach across the country to help minimise community confusion, as well as reduce the likelihood of confrontational situations for our team members, who have done an incredible job during this challenging time.”

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