PROPERTY agents contacted by the Limerick Post are in agreement that high commercial rates continue to deter retailers from following up interest in the vast number of retail outlets on offer in the city.
A spokesperson for Rooney Auctioneers revealed they has had plenty of enquiries for retail space:
“We have enquiries from national and international retailers for larger units, and quite a lot of ex- Dell workers have expressed interest in smaller units.
Where we have the difficulty is the commercial rates. When potential clients are told of the rateable valuation, which is on top of the rent, it knocks them for six. We need city council to introduce some sort of rates reduction”.
Brian O’Dwyer of Property Partners, echoed this call for a reduction in rates: “Overseas companies will not digest high rates. City Hall are playing into the hands of the County Council as retailers take their business outside of the city limits”.
He claimed that there are now more vacant units than tenants in the city centre, and it is having a devastating affect on the commercial market.
“As rents are down 50% from their peak, those locked into existing leases are now paying too much, and if they don’t get a 50% reduction, they will walk away and set up elsewhere”.
An agent from Rooneys pointed out there had been a lot of activity in the rental of smaller office units: “Prior to Christmas, we were letting smaller office suites every second day. Companies are downsizing and people who were made redundant are setting up their own businesses”.
Tom Fitzpatrick of Limerick Property Management Services, recognised a similar trend: “Those who have left larger companies such as solicitors and accountants, are setting up on their own as sole traders”.
Although smaller office units are being filled, an increasing number of larger office complexes of 3,000, 4,000 and 5,000 sq metres, are now idle.
Both Property Partners and Rooneys reported a positive start to 2010.
Said O’Dwyer: “There is definitely a bit more confidence out there from the time the budget was announced”.
Rooneys have seen renewed interest in the residential market. They cited a house placed on the market in Caherdavin recently and which found a buyer within a week.
Both companies acknowledged that house hunters are having difficulty securing finance, but O’ Dwyer indicated that some are seeing it as an opportunity.
“There are those who are trading up to reduce their level of negative equity by buying at a reduced rate”.
He also identified a lot of inconsistency, with houses in same estates varying by upwards of €100,000 in price.
However, he is hopeful for 2010: “First time buyers have a lot more confidence that they had this time last year and we don’t have an over supply problem in the city and suburbs”.
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