Greed killing the shopping centre?

[davidc4430]

Retail rents squeeze small stores out of shopping centres

https://www.abc.net.au/news/2020-02-20/retail-rents-squeeze-small-shops-out-of-shopping-centres/1198...

when i was young if you wanted to go to the big stores you went to 'town' on the bus

then drove into town in your nice car, and parked for free!

then the city got greedy, started chaging for parking.

people began moving their shopping to the  new satelite shoping places like Westfields

same stores and free parking again.

in recent times these satelite shopping centres have been going down the same greed path as the city did

placing restrictions on parking with some now charging for parking.

also raising rents to the stores to the point they were going broke.

now you walk through these centres and see multiple empty spaces.

i asume as no one rents these spaces those remaining get a rent hike to cover the losses.

my very local all new all singing shopping centre that promised a nice Foodland store plus a group of 'specialty' stores, has in the 5 years its been open never fully occupied.

most of the 'speacialty stores' have never materialized

i bet the rent is a major hold back

[myoclon1cjerk]

https://thenewdaily.com.au/finance/finance-news/2020/02/19/stagnant-wages-insecure-work/

[davewil1964]

My local shopping centre in suburban Canberra did a fairly extensive refit a few years ago. The greengrocer who'd been there since the place opened in the 70s was told he had to shut down for 12 months during the reno (which was basically Woolies-driven), then pay for a new refit, and rent would be going up 50%. He told Mirvac to shove it.

6 months after the reno, with that part of the centre having been boarded up for the full time, the grocer was back. He told me he had to pay for the refit, but rent was the same as before. So he only lost 18 months worth of income.

I suspect, given he told everybody who asked why he was closing, that public pressure on Mirvac might have had something to do with it.

[myoclon1cjerk]

And another chain bites the dust.

https://thenewdaily.com.au/finance/consumer/2020/02/20/ishka-voluntary-administration/

[martinw-48]

Maybe the economic geniuses will realise something's wrong when all the shops are empty

[zanadoo_56]

---

@davewil1964 wrote:

My local shopping centre in suburban Canberra did a fairly extensive refit a few years ago. The greengrocer who'd been there since the place opened in the 70s was told he had to shut down for 12 months during the reno (which was basically Woolies-driven), then pay for a new refit, and rent would be going up 50%. He told Mirvac to shove it.

6 months after the reno, with that part of the centre having been boarded up for the full time, the grocer was back. He told me he had to pay for the refit, but rent was the same as before. So he only lost 18 months worth of income.

I suspect, given he told everybody who asked why he was closing, that public pressure on Mirvac might have had something to do with it

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

There are FB sites for locals who live in my suburb - and bad news like forced shop closures or a place with bad service travel faster than lightning.  I reckon you're right, locals hearing the bad news would stay away and then post the details online.

The local Maccas has been bagged for shoddy service for so long I'm surprised they are still in business.  I suppose getting the passing trade on a busy road is what saves them. 🙂

[davidc4430]

when you hire children your going to get some who dont have much in the way of how to treat a customer

but then again mcfatburgers is prolly the place you get some of the worst customers.

[eol-products]

I can't imagine how an empty shop could be a tax advantage. Sure you will pay less tax if it is empty but you also earnt less with no income from that store. I tend to feel if they lowered the rent for one shop, other shops may want to question why they don't get a reduction. Bit like when a company offers new customers a better rate but nothing to their original long term customers.

[ambercat16]

Negative gearing - of a sort.  You offset a loss in one area against other income and reduce your tax.

I've never understood how it all works.....but then I've never been rich enough to be able to avoid paying tax. 

[jetho1680]

---

@eol-products wrote:

I can't imagine how an empty shop could be a tax advantage. Sure you will pay less tax if it is empty but you also earnt less with no income from that store. I tend to feel if they lowered the rent for one shop, other shops may want to question why they don't get a reduction. Bit like when a company offers new customers a better rate but nothing to their original long term customers.

---

 

They might have a  non-disclosure clause in the rental agreement preventing them from discussing rents.

Companies who own larger shopping centres maybe inclined to have conditions and clauses that differ from a single shop or smaller shopping centre.

It is not uncommon for  landlords to offer establishment periods with commercial properties.

In other words free or reduced rent for a period, I have seen it on For Lease signs in vacant shop windows

offering 3 months rent free establishment period.

[eol-products]

Negative gearing is popular with residential property not sure how it would work with commercial properties though. Commercial properties are mostly sold with a postive return and the better the return the more you pay for them.