One third of retail units to close in early 09: Sindo

The Sindo are reporting a prediction given to owners of commercial property last week that 1/3rd of retail units will shut up shop between January and Easter next year. Now I am as bearish as the next bear but I find that kind of a figure very hard to believe. I think commercial rents will be slashed before you get to anything like that rate of attrition.
independent.ie/national-news … 82564.html

I have no doubt that we are in “panic” now

Where is that graph?

Does anybody know who is behind that forecast - ie which company or institution made it?

The thought that 1/3 of retail units would go in four months in apocalyptic

What about this quote?

Upward-only rent reviews anyone? Nonbeliever?

While I can see a situation that a third of retail units are lying idle, given the over-supply that is out there, I would be surprised to see a third of existing retail closing down, i.e. units that are currently empty stay empty. What I would not be surprised by is that a third of units by current rental value.

While the figure might not be a third, I do see a shock to the system coming from retailers closing down in the coming months, however with that happening and the glut of new retail units lying idle, the fall out has to be a real drop in rents allowing for retailers to drop their prices and thus begin the fall in prices that is required to compete against the north and other shopping destinations.

I wonder will we see opportunistic liquidations or the threat of them to force rents down? If a business has the opportunity to close down and reopen and get premises at lower rent, that could make a big difference to its bottom line. If rent is not negotiable (upward only review) then liquidating the existing business and starting a new one may be cheaper. It will rely on capital being available to cope with the costs in the mean time…

I reckon it has been endemic over the last number of months never mind in the New Year. The threat of liquidation to get out of lease terms with a phoenix (in the same ownership of course) rising from the ashes to take over the assets at a discount price is a potent threat of tenants to use against LLs. I have no doubt that anchor type tenants are getting great re-negotiated deals at the moment. I see in one the papers this morning that Tesco is trying to do a sale and leaseback on the units it owns. It realises full well that this is no time to be a landlord of commercial property.

They are hardly landlords to themselves? If only they were as cute as AIB and had thought of this at the top of the market.

I would agree with the idea that 1/3 of all retail will be empty by easter or early summer.

I do not agree that 1/3 of retail in use today will have closed by then .

Can we bail them out? They are systematically important to the econmey.

I was in the Crescent shopping centre in Limerick last weekend.A shoe shop (Barretts I think) was having apparently a closing down sale all shoes were reduced between 5 and 10 euro!!!

One law for the bankers and one law for the little guy, eh?

If you look closely that says ‘Warehouse’ Closing Down Sale.
Whatever that means :slight_smile:

KN - I’m just using Ashbourne as an example but there are 4 shops closing down there in the new year. The carpet shop, a furnishings shop, a restaurant and a clothes shop. There are another 3 or 4 that are having massive sales and doubt they can last much longer. I spoke to a few workers in one shop they said they had never experienced a slump like it. I can well believe the Sindo in that regard.

Ditto. 1/3 sounds absolutely absurd. But if it were to happen, well, we really would be in armageddon territory.

Anecdotally, in my area - Ranelagh/Rathmines - there are an awful, awful lot of empty retail units.

Yes, you may be correct, but now, follow your linear logic, watch what happens…

Landlords cut rents to keep tenants

Landlord (foolishly purchased on 3% yield) has only staved off the inevitable

Landlord very soon falls into arrears

XX

This is more from the same SIndo article. Where/how do they get 500k?

It’s the Sindo, so you can expect it to be uninformed illiterate innumerate drivel.

500,000 would be 12% of the entire population, not 12% of the workforce. Idiots.

:smiley:
remembers always work out what the statistic means…