An industry group representing 2,000 retailers will on Wednesday tell TDs and senators that landlords must give shop owners a 50 per cent rent “amnesty” for the first four months of the year, during which the sector was entirely closed due to virus restrictions.
Retail Excellence is due to appear before the Oireachtas joint committee on Enterprise, Trade and Employment on Wednesday, at which it will warn of a potential “catastrophe” in the sector if retail landlords seek full repayment of rent for closure periods.
The warning comes as shopping centre owners and other retail landlords continue to pursue many shop owners through the courts for unpaid rent. This week, Jervis shopping centre in Dublin lodged a High Court action against Japanese chain, Miniso, which opened here in 2019 and sells stationery, toys and household goods.
Other shopping centres such as Liffey Valley in Dublin and MacDonagh Junction in Kilkenny, have also launched cases against tenants in recent weeks.
Duncan Graham, the chief executive of Retail Excellence, will say the retail sector faces a “financial cliff edge” over mounting rent arrears and retailers will be “decimated” if landlords insist on calling in all debts due for periods when shops were forcibly closed.
Retail Excellence will call on politicians to impose a system of mandatory mediation between landlords and retail tenants to address rent arrears. The Government has suggested, however, that it is unable to interfere in commercial contracts by imposing retrospective conditions.
Some shopping centres, which are often owned by major institutional investors and international pension funds, are accused by many within the retail trade of being particularly intransigent when it comes to seeking full payment of rent for closure periods.
Mr Graham argues major institutions and funds should be able to absorb the losses from giving two months’ rent free to retailers for the first four months of the year.
“Everyone wants to see a realistic and fair resolution to this looming crisis, and we believe what we have proposed offers that,” he said on Tuesday, ahead of his address to the committee. “The retail industry accounts for over 10 per cent of the country’s workforce, so we must explore every avenue to avoid wholesale liquidations and a resulting economic catastrophe which no one wants to see happen.”
Vacancies
He said the lockdown rent amnesty is required to help retailers “pick themselves up off the ground”. Activity in the retail sector has bounced back strongly since the end of anti-virus trade restrictions, spending data from digital payment platforms such as Revolut suggests.
Some in the retail trade are speculating that certain landlords may be waiting for retailers to build up cash reserves again from the rebound in trade, before pushing for full payment of the rent arrears built up during lockdown.
“Already we are seeing vacancy rates of up to 30 per cent on what have traditionally been our busiest high streets, and we know that there were 2,000 more commercial vacancies at the end of 2020 as there were at the same time the year before,” said Mr Graham.
“The businesses that are still trading face a monumental – and in many cases, impossible – challenge now in terms of meeting their rent obligations.”
Retail Excellence will also tell the committee tomorrow that the sector needs the Government to stump up more in State supports for retailers making the shift to online trade.
