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Hyper shops the big winners.

 

Retailers have long complained that they shoulder a disproportionate share of the burden of business rates, a tax on the commercial property based on the rental value that penalised store-based operators and advantaged e-commerce companies such as Amazon as shoppers switched to buying online. Large department stores and hypermarkets were the biggest winners in the reassessment of the «rateable values» of commercial property in England and Wales by the Valuation Office Agency. For example, the rateable value of Selfridges’ store in Oxford Street will almost halve from £30.5mn to £16.8mn. At the same time, the world’s largest Primark in Birmingham will see its rates bill drop from £1.1mn to about £680,000, according to research by Altus, a property consultancy. The VOA (Valuation office agency)said rateable values across more than 500,000 shops in England and Wales would fall by 10 per cent overall, from £16.2bn to £14.6bn.

He added that MSCI UK data suggested retail rents in England fell almost 20 per cent between the previous revaluation in 2017 and the latest. Retailers with significant high street estates, such as Next, WHSmith and Boots, have reported securing 30-50 per cent rent reductions when taking out or renewing leases. «Standard high street shops are showing only a modest decrease overall,» said Jerry Schurder, business rates policy lead at Gerald Eve, a commercial real estate consultancy. Schurder noted the discrepancy between the decline in rates and the more significant drop in rents might reflect limited activity in the retail property market at the time rents were assessed.

The VOA said rateable values were determined by «a range of rents for similar properties, as well as other evidence including a property’s location and physical attributes». Other changes in the Autumn Statement will also benefit shops. Altus estimates their rates will rise by an average of 35 per cent, but some will see a far higher jump. For example, the rateable value of Amazon’s substantial automated warehouse at Tilbury, Essex, has risen by 74 per cent to £12.3mn.

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