Reduce Your Rent
Retail Excellence Ireland is committed to reducing rent in the Irish market to a tenable and equitable level. Rent levels in the Irish commercial property market are now more than double the global average.
Rent reductions will allow member to trade on a sound footing, allow for investment in labour and will deliver better prices to the Irish consumer.
Without downward movement in rent, our industry will move from a “full serve” model to a “self-serve” model, and a further 40,000 jobs will be lost (additional to the 35,000 lost in 2009).
For the problem to be solved two things must happen:
- Rents are too high – they must be reduced to open market level by retrospectively removing the upward only clause in all existing leases.
- Rent review processes are inadequate – the process must become more transparent and true headline rents must be disclosed. The practice of falsely inflating headline rent through “off lease” deals must be ended.
What Retail Excellence Ireland is doing:
- We produce meaningful rent productivity data relating to the three primary retail formats – Shopping Centres, Retail Park and High Street. These reports highlight rent levels versus commercial returns and highlight those locations which have set rent at a non commercial level.
- We are undertaking significant legal work and preparing a cogent legal argument backing the abolition of upward only rent review clauses (UORR) retrospectively. This argument will be presented to Minister Dermot Ahern in early May 2010.
- We are undertaking a significant economic insight into the likely affect of abolition of UORR clauses on the commercial property market. Colm McCarthy (UCD) is currently completing this report which will be published in May 2010.
- We are planning a significant campaign to better inform Government Ministers as to the rent issue which pertains.
- We are participating on the Government working group established to improve transparency in the rent review process.
- We have appointed GVA Donal O’Buachalla as our preferred agent to assist members at time of rent review and seek rent reductions where trading losses are being incurred. Please contact REI for an in-depth outline of the REI GVA statute including all applicable fees. For assistance contact Jack Devlin of GVA Donal O’Buachalla at 01 6762711.
- We are making representations to Government regarding the retail property class which will move to NAMA. The yield associated with these assets cannot be guaranteed and NAMA must provide flexibility to landlords and in turn tenants regarding repayments.
- We are working to reduce other property costs including seeking the abolition of the new Rateable Valuation Calculation which has increased rates in the Blanchardstown Shopping Centre by 62% and 48% in the Pavilion Shopping Centre, Swords. We are also monitoring service charge levels in the market and highlighting those schemes which are operating the service charge on a for profit basis.