A recent study by commercial property specialists VSL & Partners reveals that in the rates revaluation which will come into effect from April 1, 2017 there will be city-centre losers and out-of-town winners, particularly in science parks.
Commercial properties in the UK pay business rates to local authorities which are based on a property’s ‘rateable value’ which, for the 2017 Revaluation, is assessed on the basis of the annual rental value of a property at April 1, 2015. These rental values are normally reviewed at five-yearly intervals and the current 2010 Rating List is based on 2008 rental levels.
As 2008 was just before the collapse of the global banking markets and economic crisis, some feel that business rates today are artificially high and have been looking forward to the correction of the Rating List. As with previous rating revaluations, however, there will be losers as well as winners with the introduction of the 2017 rates.
To enable businesses to prepare for the impact of the 2017 revaluation, VSL & Partners has studied the 2017 draft Rating List to assess how it compares to the current 2010 Rating List and to identify which areas of Oxford will see a hike in business rates and which areas will yield a saving.
Andrew Lockhart, director of VSL & Partners, said: “Our investigations show that Rateable Values for both industrial and retail properties have generally increased. The level of increase is most marked in the industrial sector where we have seen rises of up to 23%. This does, however, concur with our view of the industrial rental sector which has seen rents rise from 2008.”
The retail sector has seen rises in Rateable Values of between 8% and 15% in Oxford, which we tend to agree follows the rental market although some areas are suffering more because of the general decline in High-Street trade.
The office sector shows a more mixed picture. Oxford city centre and Botley increase by 10%-15% while edge-of-the-city business and science parks reduce by 14%-16%. This also reflects recent increases in rental level in the city centre which has seen rents rise due to increased demand and a lack of supply.
VSL recommends that all occupiers should check their Rateable Values, remembering that the rates paid are based not on the Rateable Value but on a percentage of the Rateable Value. Matters will be made even more complex by the effect of a transitional phasing scheme.