Myer v’s Vicinity Centres, prepare to duke it out in Court over Unpaid Rent
Myer v’s Vicinity Centres, prepare to duke it out in Court over 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. Vicinity claims it sent two demands last month for the retail giant to pay up.
Vicinity revealed the lawsuit at today’s AGM, pointing out that the Melbourne lockdown only started up again in July.
The case could be one of the first major bust-ups between a large retail chain and a landlord to hit the courts since the pandemic began.
Last year Westfield owner Scentre Group locked Noni B owner Mosaic brands out of 167 stores in a disagreement about rent payments. Mosaic eventually settled its dispute with Westfield out of the courts.
Smiggle and Jay Jays owner Premier Investments also declined to pay rent for many of its stores during the pandemic, under the direction of its chair Solomon Lew.
Premier Investments’ Just Group was taken to court over unpaid rent earlier this year, with a bill worth $3.5 million.
reported in the AFR, both Myer and Vicinity declined to comment on the dispute. Vicinity has also withheld its earnings guidance for the year ending June 2022 as it waits to see how strongly its Melbourne and Sydney shopping malls rebound following the reopening of those cities.
In NSW, where Vicinity’s portfolio includes major suburban malls such as Bankstown Central and CBD destinations including the Queen Victoria Building, visits averaged about 19 per cent of pre-pandemic levels. In Victoria, where Vicinity owns the country’s largest mall, Chadstone, jointly with Mr Gandel, visits are down 50 per cent.
Outside of NSW and Victoria, however, the number of visits is much more robust, averaging 90 per cent of pre-COVID-19 levels.
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 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.”
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REFERENCES
- Vicinity slaps Myer with lawsuit over $4.2m unpaid rent
By Carolyn Cummins and Simon Johanson
smh.com.au/business/companies/vicinity-slaps-myer-with-lawsuit-over-4-2m-unpaid-rent-20211110-p597o3.html
- Myer faces lawsuit over $4.2 million in unpaid rent at flagship store
By Matthew Elmas
https://thenewdaily.com.au/finance/finance-news/2021/11/10/myer-vicinity-rent/
- Myer sued for $4.2m in unpaid Bourke St rent
By Herald Sun
https://www.heraldsun.com.au/business/
vicinity-slaps-myer-with-lawsuit-over-unpaid-rent-at-melbourne-flagship-store/
- Myer Hit With Lawsuit Over Unpaid Rent On Bourke St Flagship
By Nathan Jolly
- Vicinity slaps Myer with lawsuit over $4.2m unpaid rent – Sydney Morning Herald
- Vicinity takes Myer to court over unpaid rent
By Nick Lenaghan