Republic of Ireland indies have welcomed the news that upward-only rent reviews are to be abolished from March 2010.
This week, the Irish minister for justice, equality and law reform, Dermot Ahern, signed a banning order on upward-only rent review clauses.
The ban will mean that from March retailers can negotiate downward rent reviews in new leases. However, those retailers already locked into contracts with upward-only reviews will not be able to negotiate retrospectively.
Ahern said: “I look forward to more equitable business arrangements being put in place that take account of the reality facing many business owners and retailers.”
The ban was met with approval by Irish retailers, most of whom are experiencing worse recessionary trading conditions than in the UK.
David Fitzsimons, chief executive of Irish retail industry body Retail Excellence Ireland, said: “[The ruling will] assist in bringing Ireland into line with our global counterparts who pay a much lower property cost, which is normally linked to the consumer price index.”
Indies agreed that the change in law was the only fair decision in a tough trading market. Martin O’Byrne, owner of premium menswear indie Frewen & Aylward in Dun Laoghaire near Dublin, which sells brands such as Dunhill and Ermenegildo Zegna, said: “For years, upward-only rental agreements have been the only type you can get, but we’re not in a boom market anymore. Contracts must reflect that.”
However, those indies that signed leases during Ireland’s boom time will not see the benefits of the change for some years.
Nora McDonnell, manager of contemporary womenswear indie Bella Sola in Newcastle West, County Limerick, which sells brands including Planet and Darling, said: “When times were good, landlords would only give long rental agreements. But in small towns there will still be scope for renegotiation. Indies are barely surviving at the moment and landlords have empty units to fill.”