The loan relief measures announced today by Australia’s banks are welcome and will play a crucial role in helping commercial landlords to support their tenants affected by the coronavirus outbreak.
“Commercial landlords want to do the right thing by their tenants and have a strong interest in helping them through this crisis,” said Ken Morrison, Chief Executive of the Property Council.
“They also need help in meeting their own obligations so the decision by banks to offer deferrals is significant, along with the agreement not to enforce business loans for non-financial breaches of the loan contract (such as changes in valuation).
“This relief will help landlords keep tenants and their businesses in place so that when they can re-open or return to more normal operations, they come from a stronger position,” Mr Morrison said.
Mr Morrison noted that larger commercial landlords also sourced debt from a range of onshore and offshore lenders, so there needs to be a closer look at the extent of the benefit of the measures being supported by Australian banks.
The Property Council has also welcomed the decision by National Cabinet to introduce a six-month moratorium on commercial and residential evictions.
“It’s a sensible, fair measure and one that we have said should be taken,” Mr Morrison said.
“There is still more to be done however, including in the area of land tax and rate relief for commercial property owners which we will continue to pursue with state and territory governments.
“Landlords, banks, and government all have a role to play in helping business during this period,” Mr Morrison said.
Mr Morrison said the Property Council would engage very closely with state and territory governments on the implementation of the key principles that National Cabinet has agreed to deliver commercial and residential tenancy relief.
“We have particular concerns about the practical implementation of one of the principles related to lease termination and its ramifications for the commercial property sector,” Mr Morrison said.
The Property Council has also supported moves to tighten thresholds for foreign investment review processes.
