Rent boycott threatened over hikes

THE Government has been attacked in the Dáil and Seanad for not legislating against upward-only rent reviews following a revolt by traders in a Cork shopping centre.

Fine Gael Senator Jerry Buttimer and Labour TD Ciarán Lynch raised the issue as retailers across the country threatened to withhold rent to try to force landlords into talks about rent reductions.

Mr Buttimer said legislation must be introduced immediately to address the issue. “The practice of upward-only rent reviews is threatening jobs. We need action from the Government to tackle what is in effect an anti-competitive practice. It will drive people, mostly sole traders and small business people, out of business.”

Mr Lynch also raised the issue in the Dáil and dismissed Tánaiste Mary Coughlan’s assertion that she had received legal advice suggesting it would be impossible to give retroactive powers to ban upward-only rent reviews.

“My legal advice suggests the opposite,” he said. “In fact I introduced a bill last year that would do just that and I would urge the minister to adopt my bill and bring it through the Oireachtas.”

Controversy erupted on Monday at the Wilton Shopping Centre in Cork.

The centre’s owner, Joe O’Donovan, has through agents, DTZ Sherry FitzGerald, written to four established traders seeking rent increases of between 40% and 60%. Traders fear Mr O’Donovan has cherry-picked the four to use as a benchmark to revise upwards the rents of other tenants.

The chief executive of the Carphone Warehouse, Stephen Mackarel, who is facing a 35% hike in his unit’s rent, said “this was the straw that broke the camel’s back”.

Mr Mackarel is now spearheading a national movement against upward-only rent reviews.

He has threatened to withhold his rent from next week to force Mr O’Donovan into negotiations, and urged other retailers to do the same.

“The Carphone Warehouse is a large multi-national and we have the wherewithal to stand up and say stop. But there are small Irish retailers out there afraid to take the landlords on.”

He said several other large retailers, including mobile phone firms, also plan to withhold rent. “This is not hardball. We are not pulling a stroke. We just want to agree a sensible approach.”

The Wilton Shopping Centre’s traders’ association backed Mr Mackarel’s campaign but stopped short of advising its members to withhold rent.

Chairman Ray Buckley said the majority of his members are already struggling sole traders.

“This is a real community shopping centre which has sole traders at its core. The association is reluctant to engage in a rent strike because it could leave us open to legal action. But we offer Mr Mackarel our full support. We need political support too.”

Mr Mackarel was among a group, including Retail Excellence Ireland (REI), which met the Tánaiste yesterday to discuss the various issues. He asked her to direct the Revenue to investigate the rents arbitration process to secure full transparency.

REI chief executive David Fitzsimons blamed the NAMA process for keeping retail rent artificially high so as to increase the asset value of NAMA-bound property loans.


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