RETAIL INDUSTRY group Retail Excellence Ireland (REI) has named a number of institutional landlords from whom it is requesting “closer co-operation” on the issue of rent.
REI said it was appealing to the landlords to “engage in meaningful discussions with their tenants”.
The institutions it is seeking engagement with are AIB Investment Managers, Canada Life Assurance, Irish Life Assurance, Treasury Holdings, Ballymore Properties, Chartered Land, Eircom Superannuation Fund, Harcourt Developments, Howard Euroscape, Shipton Group Cork and Lexeme Retail Property Group.
It also listed Aviva London, which is the landlord at the Liffey Valley Shopping Centre in Dublin; Alvonway Investments, a landlord at the Wilton Shopping Centre in Cork; Clancourt Management, which owns properties in the Crescent Shopping Centre in Limerick; and GVR Estates Management Service, a landlord at the Fairgreen Shopping Centre in Carlow.
The industry body claimed many of its members had “proved their financial distress” by opening their accounts to their landlords, but in some cases this had been met with “an unwillingness” to reduce rents.
“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,” said REI chief executive David Fitzsimons.
Mr Fitzsimons is due to speak today at a meeting of the Oireachtas Joint Committee on Enterprise, Trade and Employment.
Members of REI and the Grafton Street Tenants’ Association are expected to argue that the terms and conditions attaching to commercial rental leases are putting businesses and jobs at risk.
REI blames a high number of retail insolvencies on the fact that the majority of retailers are still locked into leases that contain the upward-only rent review clauses now banned from new leases, while some are tied into rents that were set at the peak of the market.
Members of the Society of Chartered Surveyors, which opposed the ban on upward-only rent reviews, and the Irish Association of Investment Managers (IAIM), which represents some of the financial institutions concerned, are also due to attend the Oireachtas hearing.
It is expected that they will argue strongly against any Government intervention in the rental market.
The IAIM claims that, based on a survey of its members, concessions have been offered to the majority of those who have opened up their books to landlords. It also points out that its members have a duty to act in the best interests of investors.
“We appreciate that some landlords have been forthcoming in offering rent reductions to reflect the reality of the marketplace,” said Mr Fitzsimons. “Many of these are retailers themselves and appreciate the critical nature of the issue.”
But, he said, “a critical number” were not engaging meaningfully and some were proposing rent increases, which was “ludicrous”.
