Page 769 - Week 05 - Thursday, 6 July 1989
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The matter has considerable urgency for me as a retail tenant. Although we have successfully traded in this location for 14 years, rents are now escalating beyond our ability to pay.
After our building "Thetis Court" changed hands in June 1987, we had an immediate rent increase in July of 25 per cent, and in July of 1988 another 11.9 per cent. When outgoings are taken into account -
That is the compulsory outgoings the tenant has to pay under some of these iniquitous leases -
these percentage increases are even higher. We are now confronted with a rent review as of 1 July this year which asks for a further increase of 29.5 per cent on base rentals -
My words, Mr Deputy Speaker, the period after Mr Hedley purchased it -
...unless we are successful in reducing the latest demand, we have been confronted by a total increase in base rental of 81.6 per cent - and if projected increases in outgoings are included probably in the order of 84 per cent.
Mr Gengos goes on to state:
This increase corresponds to a period of downturn in real terms of retail demand, and certainly bears no relationship to increases in consumer price index. We are at a loss to know how to meet such demands as we are a retailer with no capacity to increase either margins or prices above the recommended retail set by our industry.
The current basis of "market" review is often an artificial concept as tenants are forced to accept ever increasing demands by the fear of the consequences of removal from locations in which they have built up the reputation of their business over a period of many years. Additionally -
Mr Gengos ends -
rents more and more frequently seem to be justified by the sometimes inflated prices often paid for premises in the area. Most tenants have little confidence in the existing channels available for arbitration in any dispute.
Our predicament is a very real one and I would be delighted to discuss it with you at any time.
I might add that in my evening discussion with Mr Hedley recently Mr Gengos was present. Compare that with Mr
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