Business rates increases could leave buildings empty

Monday, March 01, 2010

Increases in business rates could accelerate building demolitions.

By Ashley Brunskill

Increases of more than 20 per cent in business rates for some central London office locations this April could accelerate the demolition of empty buildings, it has been suggested.

A number of landlords look to relieve the costs of paying rates on empty properties, a report from NB Real Estate has suggested.

The company found that the annual rates payable on a 115,000-sq ft West End office may rise by 21 per cent this April, from £2.3m to £2.8m, Property Week reports, with "similar massive increases phased in over the following two years".

Andrew Warde, director of rating at NB Real Estate, said: "The demolition of buildings to avoid empty rates has moved from industrial properties in regional cities to prime locations such as London's Mayfair."

He added that business rates are such a large percentage of the rental value of buildings that the large rises expected in April will increase the number of unlettable buildings in high value areas.

Kevin McCabe's Scarborough Group has recently revealed a number of acquistions totalling £37 million.

Source: ask-re The Property People LLP