Teamworx Blog

Retail Group says upward Rent Review is under way

COLM KEENA and NEIL CALLANAN

THE DEPARTMENT of Justice is working on legislation that would provide for the unravelling of upward-only rent reviews, according to Retail Excellence Ireland.   The retailers’ group has told members a Bill to this effect was being worked on in conjunction with the Attorney General, Marie Whelan SC.

A spokeswoman for the department would not comment other than to refer to a response given to a Dáil question last week by Minister for Justice Alan Shatter.

“The programme for government indicates that legislation will be introduced to end upward-only rent reviews for existing leases,” Mr Shatter told Sinn Féin’s Jonathan O’Brien.“I am in consultation with the Attorney General with a view to progressing the matter as expeditiously as possible.”

The chief executive of Retail Excellence, David Fitzsimons, in a note to members, said he had not seen a draft of any bill.
He said the organisation had “just learnt that the draft legislation to abolish upward-only rent review provisions in leases with retrospective effect has commenced preparation. The legislation is being prepared in consultation with the Attorney General. It is anticipated that the legislation will be passed prior to the summer recess.”

Mr Fitzsimons said that if the legislation is not passed there would be further outlet closures and hundreds of jobs lost.

If the legislation were enacted, it was possible it could be challenged on constitutional grounds, he said.

Alternatively, the legislation could be sent to the Supreme Court by the President.

Separately, Retail Ireland, the Ibec group that represents the retail sector, has called on the Government to create a commercial-rents assessment board with statutory powers to mediate between commercial landlords and tenants where disputes arise over rent.

Retail Ireland director Torlach Denihan said legislation to end upward-only rent reviews was needed urgently.

“As it stands, there is no self-correcting mechanism available for inflated commercial rents.  Over the last decade rent as a percentage of turnover has doubled from 10 per cent to 20 per cent for retailers,” Mr Denihan said.  “Upward-only rent reviews have not only contributed to this inflation, but have contributed significantly to the loss of over 50,000 jobs in the retail sector since 2008.”

Retailers face rent hikes of €100,000,

Over 19 million people have shopped in Dundrum Town Centre over the last year however this increase in footfall has been to the detriment of many retailers within the centre. Talks of massive rent hikes of more than €100,000 a year are currently being mentioned under the controversial arbitration system on commercial rents.

Last week it emerged that Oasis and Coast have been hit with rent increses of 51.5 per cent and 55per cent respectively. Another 45 retailers in Dundrum are now waiting for a decision on arbitration but all now expect hefty increases.  Pamela Scotts is expecting the result of its arbitration case this week.

Over 45,000 people have lost their jobs in the retail industry over the past 30 months and over 400 stores are closing each month. According to David Fitzimmons, Chief Executive of Retail Excellence Ireland " The new Government has given a commitment to introduce measures to ban upwards only rent reviews. This will be crucial if Ireland's retail sector, which employs over 255,000, is to stop haemorrhaging jobs."

(Jerome Reilly - Sunday Independent)