News & Insights
Colliers have warned that the next business rates revaluation could result in substantial increases for commercial occupiers in the industrial and logistics sector.
The property service provider has predicted that, whilst the 2023 revaluation may prove beneficial to many commercial tenants and property owners, it is extremely likely that industrial properties will be subject to a worrying increase.
The Government announced that the rates revaluation will be based upon the assessments of rental values from the 1st of April 2021.
As the rental value of many office and retail premises stagnated, or even dropped, at this mid-point in the COVID pandemic, it is believed that the revaluation may be favourable for these sectors.
However, prime logistic and industrial properties were in huge demand at this time. This was due, in part, to the growth of e-commerce and the UK’s dependency on online shopping.
Consequently, the value of many of these properties has also skyrocketed.
It is therefore believed that the revaluation will massively penalise these warehouses and, potentially, bring them further in line with the retail properties which they seem to be supplanting.
Colliers have indicated that, if the new assessment is undertaken correctly, the most desirable warehouses will experience a rates increase of up to 54%. Indeed, the average increase is forecasted to be around 18.7% for properties in this sector.
Though some brick and mortar retailers may see this as a fair outcome, it could have a serious impact on the finances of commercial tenants occupying industrial and logistics space across the UK.