Updated
A self-made billionaire, who is one of Australia's biggest private landlords, has defended asking some of his commercial tenants to keep paying rent, saying he should not be made a "scapegoat" for the coronavirus-driven economic crisis if those tenants have been successful.
Key points:
- Billionaire John Van Lieshout has asked business tenants to pay rent until the Government details plans to help them
- Mr Van Lieshout says successful tenants should "first use some of their own capital" but will offer relief to some in distress
- Some businesses say it is unfair to be charged rent when the Government shut down much of their business
John Van Lieshout has declined to extend rent relief to all businesses across his $1 billion-plus property portfolio.
Commercial landlords will be banned from evicting their tenants after the national cabinet on Sunday announced a six-month moratorium.
Mr Van Lieshout said he was considering requests for rent relief but would not commit until he knew what the Government was doing.
His company has asked tenants to detail any government assistance they will receive, which after yesterday's Federal Government announcement could now include wage relief of $1,500 a fortnight per employee.
But he said he would help those in distress, depending on their size and length of time trading.
"I've got some tenants that have only started you know, a beauty salon for 12 months," Mr Van Lieshout said.
"Some of those people I'm going to be very kind to because I know that they cannot possibly [pay] because the Government's closed it down completely.
"But the burden of this should be also accepted by the tenants themselves that have run successful businesses for many years."
Arif Memis, owner of Cowch Dessert Cocktail Bar in South Brisbane, was told by Mr Van Lieshout's company that rent was due despite his trade being "decimated" by the ban on restaurant dining.
"I don't understand what planet he lives on," Mr Memis said.
Mr Van Lieshout, the former owner of Super Amart, was ranked this year by The Australian as the 35th richest person in the country with a $2.4 billion fortune.
The 74-year-old told the ABC he believed businessowners had a "moral obligation" to reach into their own pockets first before turning to landlords given that "a lot of these tenants — I know for a fact — are wealthy people".
Mr Van Lieshout said he knew it was a tough argument to make amid perceptions that "landlords are all bastards, they're terrible people, they are capitalists and they should pay".
"But the thing is, take a tenant that has a good business that's been in business for 10 or 15 years, say he has a holiday home, he drives a nice Mercedes, and he has money in the bank," he said.
"This [the coronavirus pandemic] happens suddenly — I think he has a moral obligation first to use some of his own capital.
"He might be paying $100,000-a-year rent and for three months, a quarter, he has to dip in his pocket for $25,000 of his own money instead of coming to me and saying, 'How about you put up this money for me?'
"Why is it that people look at landlords and say, 'Well landlords, you cop it'. If these people sack their staff and don't pay any rent, they're almost off scot-free."
Empathy 'required'
Commercial lawyers say it comes amid a wave of disputes brewing between landlords and business tenants facing wipe-out across Australia.
Some large institutional landlords have been pro-actively extending rent holidays.
An email from the centre manager, State Government-owned QIC (Queensland Investment Corporation), told retail tenants on March 27 "you may defer your upcoming April rent payment until 30 April".
Ange Kondos, managing director of retail lease consultants LeaseWise, said some private landlords such as Mr Van Lieshout had not "shown the empathy that's required".
"I think the conduct of this particular landlord is abhorrent," Mr Kondos said.
"If [landlords] want to play that hard line, they're going to end up with lots of empty malls."
Mr Kondos said the ban on evictions was welcome but rental terms remained unclear.
"Even working with landlords, the harsh reality is some people just won't make it through the longer this goes on," Mr Kondos said.
Appeal for rent relief
Mr Memis said another of his landlords, the Westfield shopping centre at Chermside on Brisbane's northside, had given him a rent holiday.
Meanwhile, he said trade at his flagship South Bank store had dwindled to about six takeaway orders a day.
"I think people are scared to order and people are scared to use the Uber and Deliveroo platforms or come out and pick up," he said.
"We had about 35 staff … we're down to three."
Mr Memis said he had been appealing for weeks for rent relief and had sent financial information when requested.
But he said he had received several "letters of demand explaining that rent is due and payable right now".
'Cash-burn cycle'
The owner of a carvery outlet in Windsor in Sydney, Terry Hasan — who is the tenant of a different property owner — said he shut his award-winning business on Saturday.
"We're in a cash-burn cycle now where we're throwing our own money to burn it, our staff as well are saying with coronavirus they're afraid to work, so I've knocked it on the head," Mr Hasan said.
"I feel as though it's extremely unfair for us to pay rent."
'Very paranoid about ever going bust'
Mr Van Lieshout said he was not subject to bank pressure because he owned properties outright "and that's something that should not be used against me — for the fact I've been very frugal and that I've taken care of my affairs".
"As I could, I owned my own premises because that got rid of two of the biggest worries in my life, which were banks and landlords," he said.
"I hated bank managers because I feared them because they had control over me.
"Second thing was I had an early dislike for landlords because as a retailer … you had to negotiate with them all the time."
Mr Van Lieshout said: "What I'm saying here can give me a lot of trouble because people say, 'Well, he's in a very sound, financial position and he won't do this, he won't do that'."
"But I always kept capital reserves in [my] business," he said.
"I couldn't go bust because I always made sure that I kept substantial reserves — always — because as far as I was concerned, I had two responsibilities: one was to be able to pay the staff at all times and secondly, my suppliers.
"I'm very, very paranoid — always very paranoid — about ever going bust.
"As a businessman, you have to save for a rainy day — and right now it's a cyclone — [but] I run a business the same as everyone else does. Why do I become the scapegoat at the end?"
Replies
Both are right and both are wrong.
It's a terrible situation for people to be in and thre will be no winners only losers come out of this.
If the landlord pushes too hard he could very well end up with empty properties collecting no income from them at all, on the othet hand if you have run a successful business over many years you should bail yourself out.
Agreed, and most agents will advise a compromise based on individual circumstances.
Where's Kram? He will sort this out...
No. He is outright wrong. Someone tell this landlord that we are dealing with a virus that has caused small business to lose anything from 50% 50 100% of their turnover within 48 hours. That cannot be planned for. The Prime Minister has asked tennants to liaise with landlords about coming to a compromise for 6 months. This is a Team Australia moment where everyone takes a hit in order to survive. Clive Palmer has donated 1 miillion dollars to obtain a shipment of the malaria drug to help Australians and has pledged to spend all of his 8 billion if necessary to help Australians. This bloke appears to worship money and control. I would send copies of his refusal letters to Josh Frydenberg's office as The Teasurer has said that if necessary he will bring pressure to bear on landlords. I read this in complete disbelief.
Actually he has planned for it, as he said he always made sure he has plenty in the way of cash reserves. He is debt free and he hasn't gotten that way by spending stupidly.
That said I do think he should show some generosity in this matter, but he has shown wisdom in an area most don't.
That's the real lesson here.
If the tenants come to him and ask him for relief he then has an obligation to see what he can do, make a deal, talk to his lender, approach the government....I think we all have to take a bit of a hit during this pandemic and it shouldn't fall on any one individual.
illuminating, Brett. About as illuminating as Genesis.
Greedy. Self-centred. A-hole.
Yes, he has a point that some landlords might be wealthy themselves and should kick in their own capital. Fair point. But that is a cop out regardless, as he is shirking the whole idea of everyone chipping in.
For me, the most important part of that article is where he says he owns outright every property. So he is thus refusing to give up any income, even though he is not in the position where he would retain expenses like mortgage payments. In addition, we all know he will gouge taxpayers later on, claiming losses.
There can be no defence of this guy. None. Unless you want to defend being a selfish prick.
I bet his way to the top, he would have burnt a lot of people. T
-
1
-
2
of 2 Next