Ireland’s government is set to abandon plans to outlaw upward-only rent reviews for commercial property.
Retail lobby groups were briefed on Friday that the plan to introduce retrospective downward rent reviews on commercial property and ban future upward-only rent reviews were likely to face insurmountable constitutional difficulties.
The likely move is a blow for tenants facing huge above-market rents agreed during the boom years of the Celtic Tiger.
But it is a key victory for landlords facing a further hit to the value of property which has already fallen around 60% from the height of the market, according to IPD, and particularly the Irish National Asset Management Agency, which bought €71bn of property loans from the nation’s banks.
Nama is now the de facto largest property owner in Ireland, and has said that a ban on upward-only reviews could cost it €2bn in property losses.
The pledge to end upward-only reviews was a key part of Fine Gael’s pre-election manifesto when it came to power in a coalition with the Irish Labour Party in February.
Story by Mike Philips on Propertyweek.com on 21/11/11 http://www.propertyweek.com/news/irish-government-u-turn-on-upward-only-rent-reviews/5028078.article