The Minister for Justice and Law Reform has published a report of a group set up to look at commercial rent reviews, following concerns from retailers in particular about the level of rents they were paying.
The Working Group on Transparency in Commercial Rent Reviews has made two main recommendations.
It calls for the setting up of a public database containing the details of letting agreements and rent reviews in the commercial property market.
It has also drawn up a Rent Review Arbitration Code, which it says is aimed at providing a uniform procedure for rent review arbitrations in the commercial property market. The group wants those involved to accept the code on a voluntary basis.
Minister Dermot Ahern said the recommendations were 'sensible' and he looked forward to progressing them as quickly as possible.
The working group was set up in response to concerns, mainly from retailers, about the level of rents in the light of the economic downturn and its effect on sales. There was particular concern about leases with 'upward only' rent review clauses. These have now been banned for leases entered into on or after February 28 this year. The group said it understood similar action for leases before that date was not possible for legal and constitutional reasons.
The group was also asked to address concerns about a perceived lack of confidence on the part of tenants in both the arbitration process and in arbitrators. Its report said there was a perception among some retail tenants that the arbitration process was 'inherently biased' in favour of landlords.
Meanwhile a new report on the office market in Dublin has found that the city accounted for a greater proportion of foreign direct investment and office letting activity than other competing cities, including Birmingham, Manchester, Edinburgh, Glasgow, Amsterdam and Belfast.
CB Richard Ellis Group attributes this to Ireland's more favourable corporation tax rate of 12.5%. The estate agents says the tax rate more than offset the anti-competitive costs of locating and doing business here over the last ten years.
It points out that at one stage over the past decade, office rents in Dublin were 65% dearer than in the other cities reviewed and yet Dublin still attracted a greater proportion of international office occupiers.
