Shopping centre landlords scramble to fill Harris Scarfe void

The listed Scentre Group, Stockland and Lendlease are some of the big-name retail operators that have been caught up in the department store’s decision to enter voluntary administration on Wednesday. The chain operates 66 stores across the country, with 24 in Victoria, 13 in NSW and nine in South Australia.

It is not the first time that Vicinity Centres, which is the landlord to four of the stores in Victorian and South Australian locations, has had complications with the brand.

Commercial Insights: Subscribe to receive the latest news and updates

It is understood the landlord was not notified when Harris Scarfe was bought out by Allegro Funds last month — potentially in violation of its leasing agreements.

The two now have limited exposure to the chain’s collapse. Vicinity is in early discussions with receivers Deloitte Restructuring Services, to understand the future of the brand.

“We are continually looking at opportunities to evolve our centres to ensure we are meeting the changing needs of our consumers, which includes the opportunity to take back prime space where possible, and working with new retailers to improve our product offering,” a Vicinity spokesman says.

Several smaller operators have also been affected.

The closure is a blow to retail confidence in what is usually the busiest period of trade each year in the lead-up to Christmas.

A report from Macquarie Equities last week showed that recent Reserve Bank cuts to interest rates and the federal government tax concession did little to stimulate retail spending over the past six months, with many people instead choosing to use the additional funds to relieve their debt burden.

But there is potential for spending to improve in the medium term should confidence return to the economy.

This article originally appeared on www.theaustralian.com.au/property.