Monday, March 1, 2010

Rent boycott threatened over hikes-Why landlords in general are being unfairly targetted

From the Examiner, a story about proposed, or sought for rent increases in Wilton Shopping Centre, Cork.

The landlord in this case seems to have “targeted” 4 of the most prominent retailers for increases in rent, thereby hoping to use any agreement for increase in rent as a benchmark for a centre-wide review.

Without knowing the details, such as date of rent review, passing rents or any deals that may be in place with the tenants concerned, it is difficult to comment, but to think that in this market, with all the difficulties faced by retailers, that there could be a rent increase is astounding.

This leads me on to the campaign being run at present by REI on behalf of retailers against landlords.

They hold forth that landlords are strangling the retail trade by being “unreasonable” and of course, the case in Cork is a PR godsend to them.

But it is not that simple.

Most of the landlords we work with have already entered into discussions with tenants and in many cases have agreed substantial reductions in rent, as well as granting many other benefits, such as payment schedule alterations, postponement of reviews etc.

Most landlords are as dependent on the tenant staying in the building as the employees are, so will do everything within reason to support a viable business, if the tenant is in turn reasonable.

Some landlords, particularly those who bought in the boom period, at what now seem totally unsustainable values will be in difficulty.

They have a high mortgage, needing inflexible payments, supported by a tenant seeking flexible payments and in many cases, the lenders will not allow them to re-structure their schedule.

This means that, though they agree it makes sense, they are unable to help their tenants.

This scenario is, thankfully, rare in Clonmel, where negotiation and the ability to see a problem from both sides will usually make for a suitable, if temporary, arrangement to be forged between the parties.

Posted via email from quirkeproperty's posterous

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