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Retail Sector

Dáil Éireann Debate, Thursday - 21 February 2013

Thursday, 21 February 2013

Questions (59, 61, 129)

Pearse Doherty

Question:

59. Deputy Pearse Doherty asked the Minister for Jobs, Enterprise and Innovation the impact of upward only rent on the retail sector in terms of lost competitiveness and in terms of jobs lost. [9050/13]

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Mick Wallace

Question:

61. Deputy Mick Wallace asked the Minister for Jobs, Enterprise and Innovation his plans to assist the retail sector in Ireland which is facing significant challenges in areas such as commercial rates and high rents due to upward only rent reviews; and if he will make a statement on the matter. [9208/13]

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Bernard Durkan

Question:

129. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation the extent to which upward only rent reviews continue to be a serious inhibitor in the commercial or retail sectors; the extent to which the closure of specific enterprises has been attributed to the issue in each of the past four years to date; and if he will make a statement on the matter. [9449/13]

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Written answers (Question to Jobs)

I propose to take Questions Nos. 59, 61 and 129 together.

In the current economic environment, there is a range of factors that impact on the competitiveness of companies, including, for example, the emergence of on-line shopping in the retail sector. It is sometimes a combination of these factors that causes a company to close. However, I am aware that many retail and commercial companies are concerned about the impact which upward only rent reviews are having on their cost base. When the Government came into office, it gave extensive consideration to abolishing upward-only rent reviews in leases signed before 28th February 2010.

The advice received by the Government was that it was not possible to develop a scheme to tackle this issue that would not be vulnerable to a Constitutional challenge or compensation claims from landlords. On the basis of this advice, the Government concluded that it was not feasible to legislate to abolish upward only rent reviews. However, the Government has taken steps to address the issue where possible.

In the Action Plan for Jobs 2012, the Government undertook to place downward pressure on commercial rents where the National Asset Management Agency (NAMA) had acquired the loan on the underlying property. I understand that by the end of 2012, NAMA had received 276 eligible applications for rent abatement and had granted 212 applications with an aggregate annual value of €13.5 million. A further 56 applications were under review. Of the 276 eligible applications received, only 8 were refused, representing a 97% approval rate by NAMA. In addition, the Property Services (Regulation) Act, 2011, provides for the establishment and maintenance of a Commercial Leases Database by the Property Services Regulatory Authority. The database will go toward enhancing transparency in the commercial property market when it becomes operational.

Through the Action Plan for Jobs process, the Government is working to ensure that other factors which impact on the competitiveness of enterprises across the economy are addressed. I will announce specific measures to assist the retail sector in the 2013 Action Plan for Jobs, which will be launched in the coming days.

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