A new online database of commercial leases is expected to open up the Irish property market and allow businesses to negotiate fairer rents.
Modelled on Ireland’s house price register — and containing details of every company lease signed since 2010 — the Commercial Lease Database will, for the first time, give an accurate picture of just how much the Republic’s businesses are paying in rent.
It follows last year’s launch of the Residential Property Price Register by the Property Services Regulatory Authority, the agency responsible for the statutory licensing and regulation of estate, property management and letting agents.
Any business can now make a real-time search to see how competitive a proposed lease is, in comparison to similar nearby properties, before signing. “Until now, tenants had to try and collect proof themselves as to what the fair price of a lease should be. Now they have a common point of reference,” explained Dr Peter Stafford, director of industry body Property Industry Ireland.
“Transparency is the bedrock of a sound and informed investment market.”
The basic search is free, but for a €10 (£8.30) fee more detailed information is available, including the frequency of rent reviews, service charges, rates liabilities, break clauses and particulars of rent free periods are included.
After years of complaining about the damaging effect of expensive leases the retail sector has welcomed the new index. “Up to now retailers have had to negotiate leases without the full facts,” said Retail Ireland director Stephen Lynam. “With the information contained in this database, retailers will have a better idea of the market and can negotiate accordingly.
“Since the end of the boom, total sales are down 25pc, while costs, including rents, remain stubbornly high. Today’s news will at least bring transparency to what was a murky situation.” he added.
The Commercial Lease Database does have its shortcomings. It doesn’t, for example, carry crucial information such as the age of a building or its energy-efficiency rating. Nor does it make it easy to match addresses with tenants. And it only goes a little way in demystifying the secrecy surrounding the Irish property market where it has always been difficult for tenants to compare how much their landlord paid for their building with what they are paying in rent — making it hard to establish what kind of profit landlords are making.
“There’s still a distance to go before we ensure that commercial lease deals are evidence-based and the market is stable,” said Dr Stafford. “The next logical step is a commercial property price index.”
A major hurdle to both projects is the willingness of individuals and companies to actually supply the relevant information about their leases. Prior to the launch of the CLD the organisers were forced to send out 8,000 letters reminding tenants who had missed the deadline for submitting information.
