Occupancy up, but existing shopping centre tenants charged too much

SIGNS of recovery are evident at the country’s shopping centres with occupancy levels picking up, but retailers say existing tenants are being charged far more than newcomers.

A report shows that Blanchardstown Centre in Dublin is the most productive in the country, while Castletroy shopping centre in Limerick is the least productive.

Occupancy rates have increased in the past 15 months, while rent has reduced by on average 4%, according to the Retail Excellence Ireland (REI) report.

The report points out that retailers believe those that are holding long-term leases are paying boom-time rent while new leaseholders are being offered current market prices.

The survey found occupancy rates have increased to 86.15%, up from 84.95% in March last year. Service charges have reduced by an average 5.88% from the same period.

Occupancy rates in Dublin were highest at 89.68%, followed by Galway at 89.41% and Cork at 88.51%. Limerick reported a disappointing 67.34%.

However, when it comes to rent reductions Dublin schemes rank lowest. The biggest rent reductions were recorded at Douglas Court shopping centre in Cork followed by Wilton shopping centre in Cork.

Chief executive of REI, David Fitzsimons, said: “What this shopping centre productivity review reveals is that landlords are now operating a two-tier lease system, continuing to charge long-term lease holders penal rates while offering sweet deals to new operators just to get them in the door. The problem with this inequitable approach is that existing tenants cannot compete with new tenants, who benefit from current market rent and therefore lower operating costs.

“The slight improvement in occupancy levels is a direct result of new tenancy, somewhat masking the true closure rate suffered by many scheme owners in the last 15 months. Landlords are compromising existing tenants by letting available units to a weaker tenant mix, resulting in a diluted and confused retail offer to customers.”