Rent levels for retail premises in Galway city centre were unsustainable even before the economic downturn and continue to be a source of major concern for businesses, according to the Galway Chamber of Commerce which is calling on landlords to be more realistic.
The issue of retail rent levels hit the headlines this week with retailers in Dublin’s Grafton Street pleading for Government help to get out of leases they say are forcing them to pay exorbitant rates. Legislation also came into effect on Monday which bans landlords from inserting “upward only rent review” clauses into their leases, but this change only applies to new leases.
It is not just in the capital where rents are putting pressure on businesses, retailers here in Galway have complained about being trapped in leases where rents increased dramatically during the good times, but the levels have continued to rise even after the recession hit, making business very difficult.
When asked by the Advertiser if rent levels were currently an issue for retail businesses, CEO of Galway Chamber of Commerce, Michael Coyle, replied: “Most definitely yes,” and said that since the economic downturn the rent levels have “come sharply into focus”. Mr Coyle further explained that before the downturn business people in Galway were viewing rent as being at “unsustainable levels”. He added that during the recession, in the last 18 months, members continued to be concerned about the escalation of rent levels.
“People are locked into long term leases with rent levels the same as they were in the good times. Those agreements continue to be in place and it makes it more difficult for businesses to survive during the economic downturn. We get feedback regularly from our members on the issue - that the rent is too high, that it’s making business unsustainable, especially in the retail and hospitality sectors.”
Mr Coyle said that high rent levels continue during a time when consumer confidence has evaporated, there is less footfall through the shop doors, and a lower turnover, and that this is putting the survival of businesses in jeopardy.
The Galway chamber is calling on landlords to be more realistic when setting rent levels or risk losing long-term tenants and being left with an empty premises.