Business Rates in Real Estate
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Time to put landlords and tenants on the same side
Since the demise of Woolworths, I have spent much of my career at Deloitte reviewing the store portfolios of distressed retailers. Acting for administrators I have been both a landlord and a tenant; elsewhere in my career I have represented occupiers and managed retail portfolios for investors. I have experienced the landlord and tenant relationship from all angles, and it’s a relationship which is under strain like never before.
We all remember the tale of ‘The Three Little Pigs’. The Big Bad Wolf blows down the first two pigs' houses, made of straw and sticks respectively, but is unable to destroy the third pig's house, made of bricks. The moral of the story is that hard work, dedication, bricks and mortar for homes pay off; that whilst the first two pigs quickly built homes and had more free time to play, the third pig laboured in the construction of the house of bricks, with the hope that the structure will eventually lead to the most favourable outcomes. However, perhaps this story doesn’t hold true in today’s world?
Have the worsening market conditions finally started to take a toll on London's office construction levels?
Lowest volume of new starts in over five years
Following the three year high in construction starts reported in our summer survey (October 2018 – March 2019), we saw a 49% drop in volume in this survey. At 1.8 million sq ft recorded between April and September, the volume of new starts falls almost 15% short of the long term average and is also the lowest since our summer 2014 figures.
With the announcement of the latest Contracts for Difference Allocation Round 3 results to offshore wind projects, we thought it timely to address the emerging trends surrounding this asset class.
Sadiq Khan has published the final version of his affordable housing and viability supplementary planning guidance (SPG). This was consulted on earlier in the year. The final document has remained very similar to the draft but with a number of subtle differences. It sets out the Mayor’s approach to strategic applications that are referred to him, noting that Local Planning Authorities (LPAs) are encouraged to follow the same approach for all schemes providing 10 or more homes.
In his Budget the Chancellor announced pilot schemes to allow the Greater Manchester Combined Authority and Cheshire East and Cambridgeshire and Peterborough to retain 100% of Growth in Business Rates income.
The Government announced that they will publish the preliminary findings of their review of Business Rates Administration and a discussion document on Rates avoidance this month, and a review of the future structure of business rates to report by the 2016 Budget. This review has been long promised and at last we have a firm timetable although the Government has already said that this will be fiscally neutral.
In the Budget the Chancellor said very little about business rates: he announced a small extension of business rates relief for enterprise zones and mentioned the £1000 rebate for small retail properties that he announced in December.
Recently the Government launched their review of the Business Rates System, the British Retail Consortium were quick off the mark to put forward four options for reform, the first three of these seem to address particular business interests rather than taking a wider view of the entire system.