SCARBOROUGH small business owners in the Luna Maxi Mart shopping centre say a foreign property owner is “holding them to ransom” with unreasonable rent increases.
A group of tenants said Singapore property company Far East Organisation (FEO) would not provide a reasonable market rent to negotiate a new lease and insisted on annual rent increases.
FEO bought the Luna centre in 2016 for $64 million and owns Rendezvous Hotel and outlet centre Watertown.
One 12-year tenant at the centre, who declined to be named, said there were nine vacancies in the centre with only six tenants remaining out of the 15 available.
“So far there have been a number of tenants who have closed up and walked away,” the tenant said.
“We cannot understand why the landlord is holding out for unrealistic rents while many tenancies remain vacant. The vacancies are killing the centre and the lost rent would more than pay for the realistic reviews the tenants are seeking.”
Tenants said contact with the organisation was difficult which hindered lease negotiations.
“There is no ability for us to liaise directly with the landlord and therefore no ability for us to communicate our position,” they said.
“Their Australian-based managing agent is not in a position to make decisions and therefore the ability to have a reasonable negotiation is almost impossible.
“Their interest in being involved in the community seems non-existent.”
But FEO chief operating officer Australian properties Shaw Lay See said the company had spoken to tenants over the phone and face-to-face.
“While we have been successful in working with a number of tenants, not all have been responsive to outreach to date,” she said.
“Our occupancy remains high at 92 per cent. Rental rates are contractual and confidential between the landlord and tenant.”
Ms See said the group would consider options to assist tenants who stayed during the course of the Scarborough redevelopment works.
“We have no immediate plans to redevelop the Luna Maxi Shopping Mart,” she said.
She did not confirm if the company would offer a market rent to tenants in the near future.
Small Business Development Corporation Commercial Tenancy Adviser Jim Mouzalidis said tenants could contact the Department of Commerce if they had trouble communicating with landlords.