Commercial property owners need support from state and territory governments to be able to assist their tenants, which are composed of small and large businesses, amid the COVID-19 outbreak, according to experts.
Ken Morrison, chief executive of the Property Council, said the state and territory governments' commitment to work on model laws for commercial and residential property owners provide assurance that the sectors will be given assistance amid the COVID-19.
"Our commercial property owners and managers and their thousands of employees are fully committed to the importance of keeping businesses open, whether they're in a small warehouse or our largest office building," he said.
Morrison said state and territory governments need to provide tax relief for commercial property owners to help struggling tenants.
"State and territory governments should provide land tax relief — legislated so that it must be passed through to tenants — then that can help support struggling tenants. Land tax is typically the highest outgoing that tenants pay, so temporary relief would help," Morrison said.
Several state governments have already unveiled their plans to support those who are affected by the COVID-19.
Scott O'Neill, director at Rethink Investing, said waiving land tax obligations will result in savings that should be passed directly back to tenants.
"At the end of the day commercial owners have costs they have to cover themselves. Every dollar they can save should be passed in full to their tenants so they business can continue running until the country is 100% open for business again," he told Your Investment Property.
Furthermore, O'Neill said waiving or putting on hold other outgoings such as rates and interest costs could be another short-term solution that would benefit tenants.
Morrison urged tenants to reach out to their landlords about to raise their concerns.
"Our commercial property owners and managers are already in discussions with affected tenants about helping them continue to operate through this unprecedented period. Tenants also should not hesitate to raise their concerns with their property manager to discuss a way forward," Morrison said.
