Retailers are sleep walking into major business rates changes, according to Colliers International, the global commercial real estate agency and consultancy, in new research published this week.
‘Business Rates: How the 2017 Rating Revaluation will affect High Street Retailers’ is a major study into the likely effects of forthcoming business rates changes for retailers across the UK.
The Government’s decision to postpone the business rates revaluation has left a seven-year gap between valuations. In that time, the UK has emerged from recession and experienced a property boom and bust, producing major disparity in rent levels for retailers in different locations.
By January 2016, the government should have assessed around three-quarters of properties for new business rates levels. But it isn’t until October 2016 when retailers will be informed. This critical research based on Colliers’ Midsummer Retail report, indicates the likely winners and losers across 431 retail centres across the UK.
324 retail centres (‘retail centres’ are defined as in-town High Street shops and shopping malls) will see a decrease in business rates for retailers, with 21 experiencing no changes.
76 retail centres will see increases with the research indicating that the only losers under the new business rates regime are retail centres in London and the south east. Dover Street in Central London is the nation’s biggest business rates loser where rates are expected to increase by 415 per cent. Alongside other premium addresses, London’s losers also include Brixton (128 per cent increase), Westfield London (102 per cent increase) and Southall (91 per cent increase). While Marlow is predicted to be the biggest loser in the South East (58 per cent increase).
Although most of the Capital will see rates’ rises, some retail centres will see decreases. Floral Street, WC2 (17 per cent decrease), Fleet Street (13 per cent decrease) and Tottenham Court Road (12 per cent decrease) will have reductions alongside Ealing (46 per cent decrease), Ilford (38 per cent decrease) and Enfield (35 per cent decrease).
Newport in South Wales is the UK’s biggest winner with over an 80 per cent cut to business rates.
John Webber, Head of Rating, Colliers International, commenting on this latest research, said: “The 2017 rating revaluation will produce the largest changes to business rates for High Street retailers in a generation. We now understand that the bulk of assessments have been made and local councils are very nervous about widespread reductions in business rates revenue.
“Our message is clear: retailers need to start planning for these changes. Retailers in London and the South East will, in some cases, face significant rate rises. Budgeting to allow for this should be addressed now and we hope that our data serves as a wake-up call a clear 12 months before the government publishes the final details. For retailers who are considering closing unprofitable shops in the North and the Midlands, this report should be good news with likely rates’ cuts only round the corner.
“For retailers who can expect a reduction in business rates, it’s important to be clear about rate liability. This knowledge offers leverage for both landlord and tenant when it comes to rent negotiations. Retailers who could be sleep walking into rates changes are threatening the sustainability of their stores. We strongly urge them to wake up and act to protect their shops and the jobs which rely upon them.”
