If the shoeshop sign fits: rent a tall order on Grafton Street

Owner of Korky's forks out €3,000 on sign to get his upward-only rent gripe heard

Jennifer Bray

Loud and clear: the sign at Korky's

The owner of Korky's footwear store on Grafton Street has spent over €3,000 erecting a three-story sign in a protest against his upward-only rent lease.

John Corcoran says he can no longer pay his rent and is losing €1,000 a day. He also claims dozens of other businesses are suffering the same fate.

The sign, which is hanging from the top of his premises, reads "High Rents Are Killing Our Jobs".

The Grafton Street flagship outlet of Laura Ashley's closed down last Friday with the loss of 29 jobs. It is understood Disney made the store an offer to take over its lease.

"Another shop has closed because of the problems with high rent. I put up this sign to get the message across to politicians and the public that we are being crippled with these rents. The shops are falling down around me one by one and I cannot afford to pay my rent," said Corcoran.

The shop owner said he is now lobbying the government to introduce emergency legislation to aid those currently operating under those leases. He paid €3,000 for the sign to voice his frustration with his rent and rates which he said cost in excess of €500,000 a year.

"I don't mind paying the price for the sign as I'm hoping it will have an effect in the long run. I am looking at the bigger picture. If I'm losing €1,000 a day, I will do whatever I think might off-set this. The government brought in legislation earlier in the year banning anyone from signing upward-only leases. Unfortunately that is little or no consolation for the 90% of shop owners who are still operating under the agreement. This emergency legislation is needed as soon as possible before it is too late and too many jobs have been lost to this problem."

Corcoran can no longer pay his rent and said he will fight an upcoming court action in the hope it will have a positive outcome for other shop owners.

He previously offered €500,000 to anyone willing to take the lease of his hands.

"No one would take me up on the offer. They knew what they were getting themselves into. It didn't make sense. Especially seeing as there would be a new business beside us who may have signed a new lease for a fifth of what we are paying. This is not reasonable. We are undermined in this sense as a business.

"Everything has fallen, footfall and profits, everything except the rent. It is very damaging and it is a matter of urgency that we do something immediately. "

October 24, 2010

Comments

#1 John Corcoran commented, on October 25, 2010 at 12:53 p.m.:

Upward only rent reviews destroyed the Irish economy

#2 jmc commented, on October 25, 2010 at 12:53 p.m.:

Well done Fianna Fail. Jolly good property bubble you put on for us. Golf clap.

#3 John Corcoran commented, on October 25, 2010 at 1:11 p.m.:

stop the slaughter of Irish retailers

#4 kirsty & phil commented, on October 25, 2010 at 8:38 p.m.:

I feel sorry for John Corcoran- this story only goes to show the madness of the rental market on Dublin's premier shopping street. 500,000 Euro a year to cover rent & rates to run a shoe shop.
Whilst Korky's is destined to go to the wall one wonders if any mediation could be achieved with these greedy landlords to help these shops cope with more and more challenging economic times.
We see landlords slashing their rental demands on other vacant properties so it's in their interest to maintain good tenants where possible even if it means having to renogiate previous mega rental agreements born during celtic tiger boom years.

#5 barry commented, on October 26, 2010 at 12:06 p.m.:

John Corcoran only has himself to blame. He tied himself into a contract at boom time rents and reaped the rewards for years. He is a grown up who entered a contract and should be man enough to honour it. UORR didnt destroy the retail market. They have worked for decades in UK & Ireland. Retailers greed is what has killed the market!

#6 Henry commented, on October 26, 2010 at 1:14 p.m.:

I would like to correct John Corcoran first comment above.

Tenants who signed up for upwards only agreements and high rents made an unfortunate mistake and now they are going out of business resulting in the loss of jobs.

Everybody seems to be blaming everybody else at the moment. That won't get us out of the mess we are in.

#7 John Corcoran commented, on October 27, 2010 at 9:59 a.m.:

In 2008 Grafton Street became the fifth highest rented street in the world. The population of Ireland is similar in size to Birmingham.

In October the International Monetary Fund found``Commercial rents in Ireland are among the most overvalued in the world``

The vast majority of Grafton Street tenants rents were established at rent review/arbitration. There is a perception among some retail tenants that the arbitration system is inherently biased in favour of landlords.

No other member country of the eurozone tolerate the barbaric upward only rent reviews(UORRs)lease clause .In many other eurozone countries landlords would face criminal proceedings or jail for attempting UORRs on tenants. In Europe property investors concentrate on the property in Ireland they concentrate on the tenant and how much they can bleed from them.

Upward only rent reviews incentivised massive overrenting ,massive overvaluation of commercial properties which feed the commercial property bubble which destroyed the economy.

ireland are the world champions at overrenting.

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