These comments are the writer’s own and do not necessarily reflect the current opinions and policies of the Real Estate Institute of Western Australia.
The City of Fremantle made the news recently with their proposal to charge recalcitrant commercial property owners additional rates for failing to secure tenants for their premises. The policy is designed to punish owners of commercial properties within the city centre for failing to attract a (usually retail) tenancy for their empty shop.
Apparently, the owners of these empty shops are either greedy, apathetic or both, too stubborn to deal reasonably with offers from keen retailers falling over themselves to take occupancy of these vacant spaces.
Our Mayor, Brad Pettit labelled the idea part of a “carrot and stick” approach to reactivating the ailing retail centre of Fremantle. He defended it reminding us that the policy was initially passed several years ago only to be quashed by a technically within the Local Government Act by the previous state government. Clearly, the City remain committed to the idea.
Frankly, the idea that some owners of commercial shops in Fremantle are somehow deliberately leaving their shops empty suggests many of our Councillors are completely out of touch with the economic reality of their own environment.
Property owners, large or small, always want a tenant.
The idea that landlords get some sort of tax break if they leave a shop empty is ridiculous. In the property investment environment, you can’t claim losses against income if you don’t have any income.
My associates servicing commercial property owners in Fremantle tell me they’re lucky to get a single enquiry about leasing a shop space in some parts of Fremantle in an entire year. The fact is these landlords already pay high rates, the entire state economy is struggling in this post-mining construction boom period and increasing rates as a punitive measure will simply make things worse. Why would an investor buy here or develop more retail space if our council will charge a penalty should you fail to secure a tenant? The risk is simply too great. As Bill Clinton once famously said, “It’s the economy stupid.”
I think our Council will find every landlord wants a tenant, they just can’t find any and I would have thought it was the city’s job to improve the economic prosperity of Fremantle, not individual property owners seeking a return on their investment.
by Hayden Groves
REIA Deputy President