The Scentre Group (ASX: SCG) share price is one to watch this morning ahead of the company's annual general meeting (AGM) as Aussie retailers push for rent agreement changes across the country.
Why is the Scentre share price on watch?
The Aussie REIT will hold its AGM at 10am this morning. Shareholders attending the virtual event will hear from CEO Peter Allen and chair Brian Schwartz AM. Three Scentre directors will stand for election, giving shareholders the chance to vote on the board composition.
The Scentre share price is one to watch after a big year on the ASX. The impact of the coronavirus pandemic smashed Scentre shares in 2020. Shares in the retail real estate group slumped lower as widespread lockdowns hit bricks and mortar retail hard. Tightening restrictions put tenants under pressure to continue with lease payments as some decided to break leases altogether.
That saw the introduction of a new National Code of Conduct for commercial leases. According to an article in the Australian Financial Review (AFR), retailers are now "winning the battle for lower rents". That might see a knock-on effect from changing leases on earnings and the Scentre share price.
Landlords such as Scentre are reportedly being brought to the negotiating table on the issue of rent. Tough negotiations from major retailing groups like Premier Investments Limited (ASX: PMV) is seeing rents be reset to lower base rates amid lower foot traffic following the COVID-19 peak.
According to the article, the online retail boom is causing a rethink of arrangements. That includes some retailers agreeing to pay rent on Click and Collect online sales in return for other concessions in their agreements, said Australian Retailers Association chief executive Paul Zahra.
Scentre declined to comment to the AFR, but CEO Peter Allen confirmed in February's full-year results release that Scentre had maintained its lease arrangements structure. That structure broadly consists of tenants paying fixed base rents with annual incremental adjustments.
Foolish takeaway
The Scentre share price is one to watch today after the latest lease agreement article in the AFR and the Aussie REIT's AGM.
