The 2017 Rating Revaluation has had major implications for the Retail sector, particularly in high value areas and in towns which have seen a major decline.
Of all of the major cities, Birmingham witnessed the greatest market activity and continued to see a flood of inward investment and development work to boost the city’s standing.
Following the opening of Grand Central in 2015, property developer Hammerson strengthened their holding in the city centre with a £335m purchase from Birmingham City Council at the beginning of the year.
Occupiers continue to invest in Birmingham, with Apple opening their multi-million pound flagship store and new entrants including Byron and Wildwood continuing the improvement of the Food & Beverage provision, transforming New Street in the process.
As a result, Rateable Values in parts of the Bullring Shopping Centre have increased by 19% and it is a similar story in New Street where Rateable Values have increased by 7%.
New development however, does leave legacies that can have a dramatic effect on existing town centres.
In Stafford for instance, the opening in autumn 2016 of LXB/Crown Estate’s Riverside Shopping Centre has greatly improved the town’s retail and leisure offer in a modern mixed-use development.
However, the long-term ramifications for the existing retail on Gaolgate, Greengate Street and the Guildhall Shopping Centre will take major strategic initiatives with significant voids created as M&S, New look, Arcadia and River Island took the opportunity to relocate. Rating advice should be sought in circumstances like these where the physical landscape of the location has changed, Rateable Values must be reviewed.
When you consider the massive impact Business Rates can have on a business, it is worrying that towns which have seen a major decline in value from 2008 to date, have not seen this reflected in their Rateable Values. Nuneaton, for example, has seen rental levels fall by 50% but the Valuation Office has only partially reflected this by dropping Rateable Values by 20%. It is a similar story in other towns such as West Bromwich and Walsall.
The High Street desperately needs a boost to continue to fill their vacant units and with small business rates relief thresholds being increased to £12,000 for 100% exemption and £14,999 for tapered relief by the Government, this will certainly help.