BANK OF Ireland is proposing to almost double the rent on a Dublin city centre property it rents to a well-known Italian restaurant, citing obligations to its investors.
Dunne and Crescenzi holds leases for three properties on South Frederick Street. The current rent for one of the units, number 15, is in the region of €48,000 per annum. However, an increase to around €95,000 has been proposed by a property consultant appointed by Bank of Ireland as part of a rent review.
Eileen Dunne Crescenzi, who owns Dunne and Crescenzi with her husband Stefano, complained to the bank’s asset management section about the proposed increase. She argued “due consideration should be given to a rent reduction” in the current economic downturn.
The bank is understood to have rejected Ms Crescenzi’s claim that the figure of €95,000 was “pulled out of a hat”, saying it was based on market evidence with particular regard to the adjoining premises.
The Irish Timesunderstands that the bank said it had obligations to its investors to activate and complete the rent review process.
The proposal to almost double the rent on the property in the current downturn has prompted a Government backbencher to alert Finance Minister Brian Lenihan to the situation.
Fianna Fáil TD Chris Andrews wrote to Mr Lenihan last Thursday asking him to seek assurances from the main banks that attempts to raise rents on small and medium-sized enterprises (SMEs) will cease.
“I think this attempt by Bank of Ireland to double the rent on a thriving small business in the current economic climate, with countless SMEs facing closure throughout the country is utterly reprehensible,” he said in his letter.
“I would ask that this matter be examined immediately, and would suggest that Bank of Ireland and AIB are both asked to give assurance that any attempts to raise rents on SMEs will cease immediately.”
The letter was received by the Minister’s office on Friday.
A Bank of Ireland spokeswoman said the company could not comment on the identity of its investors or customers.
She said most of the properties the bank manages were held on long leases with five-year rent reviews. “At each review, we appoint qualified property professional advisors to negotiate the rent on our behalf. This would take into account comparable market evidence to ascertain the rent for any given property,” she said.
If no agreement is reached between the two parties and/or their advisors, the matter goes to an independent third party for arbitration.”
A spokeswoman for AIB said: “We have a very small number of SMEs renting from us. Rents are reviewed as they arise, taking into consideration all economic factors.”
She said AIB had launched a “comprehensive package of initiatives to help its 150,000 SME customers during the economic downturn” in December of last year.
