Some smaller shopping malls in Australia are struggling to fill space, with rents also coming under pressure in a difficult retail environment and amid a move to a greater use of online stores, the head of the Australian Retailers Association said.

The trend contrasts with large regional shopping centres, which continue to attract tenants hoping to set up showcase stores, said Russell Zimmerman, executive director for the association. "Those smaller centres, or sub-regionals, they are the ones that the landlords are struggling to get a fully maintained shopping centre with a 100 percent occupancy," Zimmerman said. "I know there are a number of retailers with quite a large amount of their portfolio... maybe up to 30 percent…in holdover provisions at the moment," said Zimmerman, referring to a situation where tenants and landlords cannot agree on new rents while retailers continue to occupy on old lease terms.

Despite the tough retail environment in Australia, retail landlords managed to hike rents last year. In the state of New South Wales, rents for sub-regional malls were up more than 10 percent while in Queensland they rose more than 6 percent, according to Leasing Information Services.