Neighbourhood shopping centres thriving
17 March 2020, Written by Matt Ogg
Suburban shopping centres anchored by major chains like Woolworths, Coles or Kmart are benefiting from the surge in panic buying, according to Shopping Centres Australasia Property Group (ASX: SCP).
SCP CEO Anthony Anthony Mellowes highlights his company, which owns 85 wholly-owned neighbourhood shopping centres all over Australia, is seeing strong levels of activity.
"You don't buy a suit in our shopping centres. It's really about supermarkets, convenience shopping, and they're very busy at the moment," he tells Business News Australia.
"People are benefiting from some of this panic buying and doing exceptionally well, so that's food such as takeaway food, butchers, bakers, etcetera - McDonald's, KFC, they're all performing well, and pharmacies and medical centres are performing well."
"We've got quite a few discounters such as The Reject Shop (ASX: TRS) which came out recently to say how strong sales have been in the last two weeks."
However, he clarifies this is not necessarily an "across the board" scenario and some businesses will be suffering.
"I'd love to be able to sit here and say because our shopping centres are really busy and the supermarkets are really busy, we're all fine, but we will have some tenants who will be coming under pressure because people aren't buying their product or using their particular services," says Mellowes, whose company has a portfolio worth more than $3.2 billion.
"We'll be working with those individual retailers to assist them to get through a trying period, just like the government is giving some assistance packages here.
"We spend a lot of time getting the right tenancy mix for the long term in our shopping centres, so if someone came under pressure for the short term - as could be the case now - we would certainly be working with them and if that meant in some form of rent abatement we would obviously be looking at to see if it was in the long-term interest and this was a little short-term issue."
Mellowes' comments follow a call from Premier Retail CEO Mark McInnes (see below) for retail property owners to help their tenants push through tough times.
AMP and Scentre Group focus on how to keep trading alive
AMP Capital, which owns 28 retail centres in Australia and New Zealand, provided a statement about its plans to help stores weather the Covid-19 storm.
"We continue to support our retail partners on an individual basis as we navigate through this difficult time to ensure that centres can continue to trade as normal and provide essential services," an AMP spokesperson told Business News Australia.
"For example, where flexibility of trading hours is requested, we are working through this on an individual basis with our retailers.
"Our focus is on providing a safe place for people to shop and work, with increased signage throughout the centres regarding safe hygiene practices and placing extra hand sanitising units in high use areas."
AMP is closely monitoring the Covid-19 situation as well as the advice of state and national health authorities in relation to infectious diseases.
"The health and safety of everyone visiting and working at our centres is our primary focus, as we continue to create a safe and welcoming experience," the spokesperson said.
"We are currently reviewing all centre activations, but at this stage do not have any large scaled events planned in the near future.
"Across our assets we have remained diligent in our cleaning processes and through our service providers, we have placed additional focus on key areas such as hard surfaces, food courts and bathrooms."
Meanwhile, Scentre Group (ASX: SCG) CEO Peter Allen sent a letter to shareholders emphasising the importance of hygiene and cleanliness.
"If a retail partner becomes aware of any confirmed cases of COVID-19 within their customer facing teams in our centres, they must contact their local Westfield centre management immediately," said Allen, whose company owns and operates 42 Westfield centres in Australia and New Zealand.
"We would then work with our retail partner and the relevant health authority to support any required public communication and advice on deep cleaning.
"We are working with our retail partners to ensure our forward program of in-centre activations addresses the necessary wellbeing precautions whilst supporting business continuity."
Given the volatility in capital markets, Scentre Group also made the decision to pause its share buyback program.
Updated at 4:26pm AEDT on 17 March 2020.
Author: Matt Ogg