Recently there has been wide press about the impact for businesses when road works are being undertaken or where the patronage of a centre declines through external or internal factors.

We recently assisted a business that was on an upper floor of a premises. A larger tenant had shut down in the prior year and the primary escalator to the location was shut, to access the shop was an extra 200m walk. Passing trade dropped by 90%.

The business started to suffer significantly, and over the space of a three month period turnover had dropped to 15% of pre-shutdown levels.

As the turnover reduced dramatically, an approach to was made to the landlord to move the location to a high traffic area, significantly reduce the rent or allow for a termination of the lease with no cost. All were rejected, but why?

The lease does not give a guarantee as to passing foot trade and despite the escalator being out of commission, the landlord could point to multiple entry points to the floor. As there was not impeded access to the store, the tenant could not argue that they had been not able to access their premises.

There are horror stories were through no fault of their own, shop owners in major complexes are placed in a position of minimal or no foot traffic for an extended period, causing severe financial difficulties.

In our case, the risk for the tenant is that they were hamstrung in what they could do. Rather than take active steps, the landlord’s view was that they would be happier with a tenant in distress as opposed to sourcing a practical and reasonable solution. Working shutterstock_547553875closely with our partners, we were able to extract the tenant for a minimal cost and ensure that the equipment and stock on premises were removed in a timely manner. This insured that their losses were mitigated and they were able to start trading immediately in new premises with a better landlord support.

We work closely with businesses that are facing difficulties through changing business landscape for a confidential and no obligation discussion give us a call on 1300 023 782 or team@cdrta.com.au.

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Craig is the principal consultant of C&D Restructure and Taxation Advisory and has been working in the industry since 1999. Having established C&D Commercial Partners in 2015 the precursor to the current business.

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Post Author: Craig Dangar

Craig is the principal consultant of C&D Restructure and Taxation Advisory and has been working in the industry since 1999. Having established C&D Commercial Partners in 2015 the precursor to the current business.

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