Jobs: Commercial Rents 24th January 2013

24th January 2013 - Bernard Durkan TD

To ask the Minister for Jobs, Enterprise and Innovation the extent to which he and his Department continue to monitor business closures in the retail and or commercial sector deemed to be caused by high rents which are the subject of upward only rent reviews; the number of premises closed in respect of which upward only rent reviews was a condition in the past two years to date; and if he will make a statement on the matter.

Bernard J. Durkan.

* For WRITTEN answer on Thursday, 24th January, 2013.

Ref No: 3678/13

R E P L Y

Minister for Jobs, Enterprise and Innovation (Mr Bruton).

As I have pointed out to the Deputy in response to previous questions on this matter, (PQ number 252 of 2^nd October 2012 (Ref. 42061/12) and PQ number 103 of 22^nd November (Ref. 52064/12)), there is no specific data available on the extent to which upward only rent reviews have been a factor in causing job losses.

While I acknowledge that upward only rent reviews are putting pressure on some enterprises in the commercial and retail sectors at the present time, there are other factors influencing decisions of individual companies to reduce jobs. The retail sector has, for example, seen a disproportionate fall in activity due to the fall in consumer confidence and a reduction in discretionary spending by Irish consumers.

Allied to this, the changing nature of retailing has seen new patterns in the way people shop. The growth of On-Line trading has impacted on the high street retailer, not just in Ireland, but in the UK also where there have been a number of high-profile retail closures in recent months.

Following extensive consideration of the matter, the Government announced in December 2011 that it had decided not to proceed with legislation to abolish upward-only rent review clauses in leases signed before 28^th February 2010. However, the Government took steps to address the issue where possible.

In this regard, NAMA is playing a role in dealing with problems caused by upward only rent reviews applying to NAMA properties and has published policy guidance which will inform the approach to be taken where tenants are experiencing difficulties in paying rents in these cases.

The Property Services (Regulation) Act 2011 provides for the establishment and maintenance of a Commercial Leases Database by the Property Services Regulatory Authority, which is expected to capture information in relation to the rent agreed and other clauses within commercial leases agreed in the future. I understand that work is underway to ensure that the Database will be operational at an early date.

Separately, a Rent Review Arbitration Code was drawn up by a group of experts whose membership was drawn from all stakeholders in the commercial property arena. The Code, which can be found on the website of the Department of Justice and Equality (www.justice.ie), provides a mechanism to deal with the resolution of rent review disputes in the commercial property sector.

Bernard Durkan TD

Kildare North

Bernard J Durkan is the Fine Gael spokesperson on Public Expenditure, NDP Delivery and Reform. Originally from Killasser, Co Mayo,…

Jobs: Commercial Rents 24th January 2013

Bernard Durkan TD

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