Vacancies rise as rents stay high
Experian, the global footfall analyst, has found that Dublin's vacancy rate is higher than than the national average while Limerick's is highest in the country
10 October 2009
Experian, the global information services company, found in a recent study that the retail vacancy rate for Dublin is currently 20.67%, which is 6% higher than the all Ireland average of 14.1%.
According to Experian, Ireland’s average vacancy rate is 2% higher than the UK average rate and almost 1% higher than the Northern Irish figure.
Limerick currently has the highest vacancy rate of all the key centres in Ireland, with more than a quarter of its retail space unoccupied. Experian says this situation is to get worse, as vacancy is predicted to increase by more than 2% in the county to 27.39% by February 2010.
Vacancies are set to rise throughout the country, with Dublin’s rate expected to increase to 20.81%, Cork expected to increase from 17.37% to 18.54%, and Galway expected to increase from 13.65% to 14.33%.
Director of retail and property at Experian, Jonathan De Mello said that in spite of the figures Grafton Street remains “as strong as ever in terms of rental tone” thanks to its “significant footfall, tourist appeal and retail mix.” De Mello predicts that vacancies at the prime location will be quickly filled, although “the same cannot be said of other parts of Dublin.”
Retail Excellence Ireland (REI) meanwhile has said that existing lease commitments are “excessive and unsustainable” and are causing retail businesses to fail. The group has called on the Government not to take higher property yields as an indication of property values when considering the price NAMA should pay for bad loans, as “leased properties are over-rented in a falling market and landlord income is propped up by legislation preventing downward rent reviews.”
REI Chief Executive David Fitzsimons has slammed the Minister for Finance’s assessment of the long-term value of assets destined for NAMA as “completely off the mark,” claiming the minister is misled by property yields that are only higher on account of upward only rent clauses.
Fitzsimons has repeatedly said that upward only rent legislation is “past its use-by-date and needs to be radically overhauled in line with market reality.” He also claims that the Government will now not proceed with the abolition of upward-only rent reviews, although the legislation has already been passed, as it would undermine NAMA asset values as they stand now and in the future.