REI names and shames landlords
In a bid to encourage landlords to engage in dialogue with retailers in financial difficulty, REI has named landlords who are charging rents significantly above current market rates.
Print13 April 2010
Retail Excellence Ireland (REI) has resorted to naming and shaming landlords by listing those who it claims “need to work in closer co-operation with retailers on the issue of rent.”
REI wants landlords to engage in dialogue with their tenants before more retailers already in financial difficulty go out of business.
David Fitzsimons, chief executive of the REI decided to take the action of naming individual landlords in a bid to tackle the issue of rents which are significantly in excess of current market rates.
The landlords who have been requested by REI to work in a co-operative manner with tenants include: Wilton Shopping Centre, Cork; Liffey Valley Shopping Centre, Dublin; Ballymore Properties; Canada Life Assurance; Crescent Shopping Centre, Limerick and the Fairgreen Shopping Centre, Carlow.
Fitzsimons said that REI members have been trying to negotiate for some time but for many time was simply running out. “For months now, our members have been trying to negotiate rent with their landlords, not because they are looking to increase their profit margins but simply because they want to stay in business. We appreciate that some landlords have been forthcoming in offering rent reductions to reflect the reality of the marketplace. Many of these are retailers themselves and appreciate the critical nature of the issue. However, a considerable number of landlords are refusing to engage with retailers on the issue of rent and some, incredibly, are proposing rent increases.”
Fitzsimons reported that in the first two months of this year, there were 38 insolvencies in the retail sector alone.
The Upward Only Rent Review Clause is the cause of much of the problems but the Minister for Justice, Mr. Dermot Ahern, said that the Clause can not be abolished due to legalities. “While we will continue to pursue this avenue, we need to look to other short-term options and our members are hoping that by releasing this information their landlords might be more willing to engage with them,” he said.
The Grafton Street Traders Association are warning the Government that in excess of 50,000 retail jobs could be lost over the next 12 months unless some action Is taken to address the problem of upward-only rent reviews for existing lease holders.
However, the Irish Association of Investment Managers defending the position of institutional landlords, claim they are acting on behalf of pension funds run on behalf of ordinary people.
According to the Irish Examiner, IAIM chief executive Frank O’ Dwyer warned against abolishing the Upward Rent Rview Clause because“institutional landlords would look to invest in property in other countries if there were any moves to introduce index-linked rent reviews in Ireland.”
Mr O’ Dwyer also said it was untrue that landlords were not engaging with tenants about rent reviews, as a recent survey had shown that 118 out of 258 retailers who had sought rent concessions had been granted them by IAIM members. n
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