In a speech in Dáil Éireann on upward only rent reviews, I’ve highlighted the situation in Ennis with regards vacant commercial space.
Seventy premises are currently vacant in the town, owing to the economic downturn.
“The CEO of Ennis Chamber of Commerce, Ms. Rita Mc Inenery told me toady, that 70 commercial properties are presently available to either rent or let in our County town. This is extremely worrying for the continued economic development of Ennis.”
This figure represents 10% of the total rateable commercial properties in the town presently.
Commercial rents in Ireland are too high, and with many of them struck at the height of the boom, they are not in line with current market forces.
There are 700 businesses on the rates books of Ennis Town Council. It’s a frightening reality, that 10% of the rateable commercial properties in the Town of Ennis are vacant, unoccupied, having had to close down because of this recession. Unfortunately, this scenario is replicated throughout the Country.
It’s blatantly clear that commercial retail rents in Ireland are far too high and cannot be sustained in the current trading environment. Many of these rents were struck in the height of the Celtic Tiger era and bear no resemblance to the economic reality faced by the Ireland of today.
While upward rent reviews are finally been tackled by government, I am calling for this ban to be applied retrospectively, so it applies to contracts struck before the ban was applied.
“Rents being charged in properties are now exceeding Labour costs. It’s common place to find retailers rents representing up to 20% of their revenue. This position, is causing huge financial stress to business and is simply unsustainable.”
Full Details of Dáil Éireann speech below
Speech by Joe Carey TD to the Land and Convencyancing Law Reform (Review of Rent in Certain Cases) (Amendment) Bill 2010 sponsored by The Labour Party 9th March 2010
I first of all, want to commend the Labour Party and Deputy Ciaran Lynch for bringing forward this Bill before the House this evening.
The retail sector is this country is in crisis.
The CEO of Ennis Chamber of Commerce, Ms. Rita Mc Inenery told me toady, that 70 commercial properties are presently available to either rent or let in our County town.
There are 700 businesses on the rates books of Ennis Town Council. It’s a frightening reality, that 10% of the rateable commercial properties in the Town of Ennis are vacant, unoccupied, having had to closed down because to this recession. Unfortunately, this scenario is replicated throughout the Country.
It’s blatantly clear that commercial retail rents in Ireland are far too high and cannot be sustained in the current trading environment. Many of these rents were struck in the height of the Celtic Tiger era and bear no resemblance to the economic reality faced by the Ireland of today.
The regime of Upward-Only Rents, has meant that, many of our retailers, who were hanging by their finger tips, have gone to the wall, bring valuable jobs with them. I have spoken to many Clare business people who are really struggling due to the unsustainable leases they are tied into. They are crying out for some respite, some helping hand. There were 38 retail insolvencies in the first two months of 2010. This has to stop.
It’s a profoundly depressing experience to walk down any street, in our cities or provincial towns, to witness the commonplace, whited-out windows and the ever-growing proliferation of “Available to Rent” signs.
In the past fortnight, the significance, of what is happening daily to smaller shops with the loss of 4 to 5 to 6 jobs, was underlined by the closing down of two signature retail outlets, with Bookseller, Hughes & Hughes and Bestseller the renowned Clothing chain going into examinership. Both of these retailers, blamed excessive rents for their difficulties.
Rents being charged in properties are now exceeding Labour costs. It’s common place to find retailers rents representing up to 20% of their revenue. This position, is causing huge financial stress to business and is simply unsustainable.
It is somewhat ironic, that little by little, we see that, some of those involved, in our, now discredited banking sector, are beginning to appear as landlords of buildings and shopping centres.
In the same way, that we need to know, what has gone on in our banking institutions in this country, we also need to know, what is going on in the rental markets in this Country. I believe, we need full transparency in the process, which is not there at present. The whole industry needs proper regulation and full disclosure. In short, there must be a level playing field for all parties engage in this process.
It is obvious to all, that he Retail sector has cut its costs. Prices to the consumer have been cut, Labour costs have been cut, by either reducing employees hours or letting employees go and yet one of the most significant costs, cannot be changed.
In all walks of business, there is price flexibility.
We see it in sales, we see it in special offers on products, we see in discounts for bulk purchasing, we see it in promotions.
Without this flexibility, the business world would simply not exist. The only area in terms of business in this Country where there is no flexibility, is in relation to rents.
This evening, the Government have an opportunity to introduce a retrospective ban on Up-Wards only Rents.
This ban will go some way in stopping the loss of vital retail jobs.
It will also give much needed support to the small and medium size business people who provide those jobs.
Tonight, I urge the backbenchers in Fianna Fáil to support this Bill.
We have heard and seen enough of the crocodile tears from Government Deputies in relation to job losses.
Tonight, I call on you to help protect the retail sector and many, many vulnerable retail jobs in your constituencies, by supporting this Bill.