RETAILERS across the country have threatened to withhold rent in an effort to force landlords into face-to-face talks about rent reductions.
The news emerged last night after representatives of the retail industry met the Tánaiste to discuss their concerns about upward-only rent reviews and how the practice is threatening thousands of jobs.
The issue was also raised in the Dáil by Labour TD Ciarán Lynch after controversy erupted on Monday about rent reviews 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”.
He 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 he urged other centre retailers to do the same.
“There is a minority of ill-informed, greedy and out of touch landlords and agents out there who think they can get an increase in rent,” he said.
“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 major mobile phone companies, are also planning to withhold rent.
“This is not hardball. We are not pulling a stroke. We just want to agree a sensible approach,” he said.
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,” he said.
“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.”
He also said several traders are “hanging on by their fingernails”.
“Six units closed in the last two months – two in the last few weeks alone. There are at least four more who are at risk over the next month.”
Mr Mackarel was among a group, including Retail Excellence Ireland (REI), which met Tánaiste Mary Coughlan yesterday to discuss the various issues.
He asked her to direct the Revenue Commissioners to investigate the rents arbitration process to secure full transparency, and told her the timing of legislative changes around rent reviews is critical.
REI chief executive David Fitzsimons blamed the NAMA process for keeping retail rent artificially high in order to increase the asset value of NAMA- bound property loans.
“The only way we can move forward on this issue and speed up recovery in the sector is with the direct and immediate intervention of the Government.”
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