426pc rent hike for shop was mistake, says agent
Published 24/02/2010 | 05:00
AN astronomical 426pc rent increase demand for a Carphone Warehouse shop in a Cork shopping centre was yesterday described by a leading estate agent as an unfortunate error.
However, the whopping rent increase demand -- from €39,000 to €205,000 -- will still be cited today by retailers in a meeting with Tanaiste Mary Coughlan over the abolition of the "upwards only" rent review clause.
Carphone Warehouse chief executive Stephen Mackerel said the rent demand is indicative of the problems now facing many Irish traders who, despite the dismal economic climate, still find themselves with demands for increased rents from landlords.
"The reality in Ireland today is that rents should be coming down not going up," he said.
Mr Mackerel said he couldn't believe his eyes when he received a rent increase demand last month for his Wilton Shopping Centre outlet in Cork.
The rent hike -- from DTZ Sherry Fitzgerald -- was for a new annual rent of €205,000, an increase of 426pc. Mr Mackerel -- whose firm operate 76 outlets nationwide and sell almost 33pc of all mobile phone handsets in Ireland -- said that the Wilton outlet is just 25sq m in size. Five staff work at the branch, which has been open for over a decade. DTZ Sherry Fitzgerald said the rent figure was an error and was due to a typographical error.
The estate agent said the new rent should be €53,300 -- a 37pc hike. The firm pointed out that the rent increase should be viewed in light of the fact it is the first proposed increase in rent for the premises involved in seven years. But Mr Mackerel said it was incredible that any landlord should be seeking rent increases in the current economic climate.
Meanwhile, retailers body Retail Excellence Ireland (REI) said other tenants at the Wilton Shopping Centre had received demands for increases of between 30pc and 58pc.
David Fitzsimons. of REI, said that the exorbitant rent demand is just the latest bid by one of a number of developers to try to bump up the value of their properties. He cited demands for increases of 100pc at The Pavilions Shopping centre, Swords, and an increase of over 40pc in Monaghan.
"Landlords who are being lined up for NAMA are seeking to boost their yields and thus boost the valuation of their properties At the same time that some landlords are quoting high headline rents they are also doing deals with some retailers which include rent free periods," he added.