The Real Estate Institute of Victoria has slammed the Victorian government’s recent decision to exempt some commercial property agents from current licensing requirements, with REIV chief executive officer Enzo Raimondo accusing the state government of pandering to the demands of large shopping centres by allowing the change.
Mr Raimondo, with the backing of REIA CEO Amanda Lynch, is attempting to rally estate agents against Victorian premier Denis Napthine and his changes to the licensing requirements for anyone working on “large” commercial properties worth at least $15 million, or with a total floorspace of 10,000 square metres. The Victorian government, stating the changes are “strictly limited to large commercial property transactions, including those between related companies”, is due to consider the changes on 29 October, with a possible commencement date of 1 July 2015.
The proposed changes will allow certain leasing executives the chance to sign retail leases for shopping centres without having a real estate agent's licence
Mr Raimondo said an industry alliance has thrown $1 million behind the cause to fund a campaign to fight what he believes are "damaging changes".
“To date, those looking to buy, sell or lease commercial real estate have had the benefit of negotiating these transactions with skilled, licensed practitioners who are bound by professional qualifications, training and codes of conduct,” Mr Raimondo said in an earlier statement.
“The government has now opened the door for a number of untrained, fly-by-night operators to enter the commercial property market.
“It will be a free-for-all… Agents dealing in commercial and industrial transactions below $15 million will be licensed, while others won’t. Meanwhile, consumers will be left confused. It’s the most ill thought-out policy statement to impact the industry in years.”
The changes were first mooted in January as one of 36 ‘red tape’ reforms to reduce costs for Victorian businesses, driven by deputy premier Peter Ryan and treasurer Michael O’Brien, and recommended by red tape commissioner the Hon John Lloyd PSM.
Speaking exclusively to Real Estate Business, executive director of the Shopping Centre Council of Australia Angus Nardi, who represents major landlords and strongly supports the government’s decision, said over 95 per cent of commercial property transactions would still be performed by licensed real estate agents. Retail tenants will still be protected by the Retail Leases Act.
An earlier statement from the SCCA chairman, Steven Sewell, who is also the CEO and managing director of the $3.6 billion Federation Centres, said “the Victorian real estate licensing regime is a cost burden on our sector and teaches our sector nothing about how to own, manage or lease a shopping centre”. Mr Sewell also said commercial agents, including SCCA members JLL and Savills, will still play an important role in shopping centre leasing, management and transactions.
Mr Nardi said the REIV does not speak on behalf of commercial property owners and took umbrage at the idea the state government "acquiesced" to the demands of large shopping centres.
“I’m perplexed as to why the REIV has launched such an extraordinary attack on a sensible policy decision to exempt large commercial property owners from unnecessary red tape,” Mr Nardi said.
“Our members, such as AMP Capital, DEXUS, Federation Centres, Stockland and Scentre Group are capable of looking after themselves, and they certainly don’t need a lecture from the REIV."