A NEW survey by the Society of Chartered Surveyors Ireland has found that the most common outcome of rent renegotiations between landlords and tenants was a rent reduction of between 20% and 29% in 2011.
The SCSI said the survey of its members showed that where tenants could provide evidence that they needed a rent reduction, landlords were willing to engage, although it depended on the type of landlord.
Of those surveyed, 98% of respondents reported that private domestic landlords are providing rent reductions, while 61% reported that international pension funds are not granting rent reductions.
However, the SCSI said that the main issue affecting the market was the continued uncertainty caused by the proposed introduction of legislation to ban upwards only rent reviews in existing leases.
It said that this uncertainty is severely impacting Ireland’s ability to attract foreign direct investment and pointed to figures that suggest that investment levels have dropped to about €180 million so far in 2011, compared to over €3 billion in 2006.
Roland O’Connell, Vice President of the Society of Chartered Surveyors Ireland said that “the significant fall off in investment in the commercial market has a ripple effect on the wider economy. The country potentially loses out on foreign direct investment which can stimulate growth, create jobs and provide tax revenue to the exchequer”.
Mr O’Connell said that the debate has moved beyond whether the proposed legislation will be perceived as fair to tenants or landlords and is now a matter of Government making a prompt decision.
“Publishing the legislation will provide a level of certainty and confidence to both tenants and landlords so that they know what to expect and can make business decisions for the future, which is in everyone’s interests,” he said.
Some key findings of the survey found that:
