I am pleased that the Federal Government has asked the Productivity Commission to undertake an inquiry into the market for retail tenancy leases in Australia. The press release from Peter Costello outlines what the Commission has been asked to report on:
the structure and functioning of the retail tenancy market;
any competitive, regulatory and access constraints on the market;
the extent of information asymmetry between landlords and retail tenants;
scope for reform of retail tenancy regulation;
the appropriateness and transparency of provisions in leases to determine rights when the lease ends and factors that are taken into account in determining rents;
and,
any measures to improve overall transparency and competitiveness of the market for retail tenancy leases.
While I think the Government has taken too long to call this inquiry, I welcome it as should all small business tenants including newsagents.
I know of newsagents with occupancy costs of 16% and above. With retail newsagent GP averaging 29% there is little room for wages and other business expenses.
Newsagents ought to participate in this inquiry – personally and through industry associations. The more submissions the better the Commission will be informed as to the facts. The Productivity Commission website has a page from where you can find out more about the inquiry and register interest in making a submission.
One area the inquiry could report on – if there are submissions – is head lease arrangements which have seen the sub tenants removed and or locked out for matters unrelated to the lease. In such cases, the lease is the mechanism of control and can be layered with an overhead beyond the traditional direct lease arrangement.
Any newsagent who has recently complained about their landlord, especially a shopping centre landlord, must make a submission to the inquiry. To pass on this opportunity to have your voice heard would make your complaints a waste of breath. Get involved newsagents – this is your opportunity to be heard.