Coronavirus: Landlords slam 'greedy' corporate businesses refusing to pay rent

Landlords have expressed frustration with Pecsavers and Flight Centre.
Landlords have expressed frustration with Pecsavers and Flight Centre. Photo credit: Getty

Kiwi landlords have slammed large businesses refusing to pay rent, saying: 'we've got bills to pay too'.

The owner and director of Cooper Family Investments Rick Cooper says he was shocked when Specsavers' Country Director Brendan Thompson called landlords "completely heartless" for demanding rent during the pandemic.

Cooper's business owns Specsavers' Taupo premises and says they are refusing to pay any rent and "expect the landlord to take the full hit of this situation".

He says he is trying to keep his business afloat during the pandemic as well and everyone needs to compromise.

"It's a long way from the truth when you consider our situation with Specsavers. We've got 64 commercial tenants and every one of them including them, we gave them a 50 percent rent reduction for April and a 50 percent rent reduction for May...

"I'm a great believer in fairness... When I went to school and got brought up, fairness meant 50:50 and it's best, I believe, that both of us get our feet a little bit wet and one person doesn't cause the other person's ship to sink."

Specsavers Taupo reopened on Thursday when New Zealand moved to alert level 2, and Cooper says since they are using the store, have the keys and their stuff inside, they should pay rent.

He says he understands many tenants are struggling through the pandemic but landlords around the country need to pay mortgages, building maintenance, and more.

"That particular building, the family trust belongs to my mother who uses that money to pay her fees at Ryman's Village so why should she have to be put out on the street because of him?"

"I think at the end of the day there is a lesson to be learnt here: a lot of companies aren't keeping enough petrol in their tank for rainy days and we are having a rainy day."

He says if they continue to refuse to pay rent, his company will be forced to take legal action.

Specsavers' New Zealand retail director Brendan Thompson told Newshub there were more to his comments on Tuesday.

"In the full interview I mentioned that we had had dealings with a gambit of landlords from those that were accommodating to those that were threatening breach and eviction notices - and everything in between."

He says the company is talking with landlords for each of their 56 nationwide stores to find solutions.

"Our goal is to work through the situation with landlords on behalf of each of our local stores, all of which are locally owned businesses looking to find a way through COVID-19. 

"If landlords and tenants do that successfully we will achieve a win-win outcome: retailers will be settled and able to rebuild for the long-term and landlords' properties will be tenanted for the long-term.

"We are not asking for landlords to bear the entire cost but to share our burden given our inability to date to enter our store locations and trade. Retailers want to be able to have a two-way conversation without the fear of eviction."

Another landlord, who asked to remain anonymous, rents an office space to one of New Zealand's Flight Centre stores.

On March 22 they received a letter to landlords from the Flight Centre's Managing Director David Coombes asking for "urgent assistance".

"While people’s safety is a top priority, the measures and restrictions that are now in place are unprecedented and have had, and will continue to have, a significant impact on our business, the travel sector and on the broader economy," the letter says.

"With the timeframe for recovery unclear at this point in time, Flight Centre is now writing to all our landlords to request immediate relief for all our brands across our entire portfolio, including franchisees."

They asked for landlords for:

  • 14 days deferral of gross rental payments for April until 14 April 2020
  • At least 18 months' gross rent free 
  • Flexible trading hours for at least 18 months, if any mandatory trading hours apply to the premises
  • Freeze on rent escalations for at least 18 months
  • Waiver of make good costs for vacated stores.

The landlord said he was in "disbelief" when he read the letter.

"We had gone out of our way over the last couple of years to support Flight Centre by updating the facilities. We added security cameras and better lighting to make the predominantly female staff feel safer in winter when it gets dark at 5pm. Finally, we have not put up the rent since 2012.

"The letter was a kick in the guts and we thought this is not how you should engage people."

They said since then they haven't received any rent money from Flight Centre.

They said it was a common misconception landlords were rich and greedy but many are everyday Kiwis who have "cobbled together enough money to buy a small building in town that they rent out and use that rent to put food on the table".

The landlord and their partner are semi-retired and their work has significantly decreased during the pandemic, meaning they are more reliant on the income. They are calling on businesses and landlords to share the costs during the pandemic.

"In the absence of knowing each other’s financial position the 50:50 rent rule should have applied for the eight weeks of level 4 and 3. Both parties sharing the burden."

But they said they felt pressured into giving the Flight Centre six months free rent because "they were taking it anyway and we don’t have resources to take them to court".

A spokesperson for the Flight Centre told Newshub they were surprised to hear of the landlord's complaint.

"No landlord has reached out to us to express any of these concerns. In no circumstances have we forced any landlords to reduce rent, we have simply asked for assistance, as have many other businesses over this period. 

"This is an unprecedented time of little to no revenue for the travel industry and we have been exploring every option to reduce our cost base so that we can keep our people employed. 

"We made the difficult decision to close 58 of our stores last month, and of the stores that we’re keeping open, we’re working collaboratively with landlords to come to a mutually beneficial agreement for both parties - with the intent of staying in those premises long-term."

They said they have lobbied with the Government to provide assistance to commercial landlords through the pandemic and hope they will be considered for financial aid in Thursday's budget announcement.   

The Government is set to announce its annual budget at 2pm on Thursday.

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