Northern Ireland Revaluation likely to lead to increase in rates bills in 2020 particularly for Belfast city centre offices says Colliers- although retail should fall. Estimates based upon NAV rises of over 30% in office sector since last list in 2015.
A number of office businesses in Northern Ireland should see some steep rises in their rates bills from 1 April 2020, when the new bills are issued, according to business rates experts at Colliers International, the global property consultants.
Land and Property Services (LPS) has this week published its draft revaluations list figures for all 74,000 non-domestic properties in Northern Ireland. This is the first time net annual value (NAV) has been adjusted since 2015, where NAV was based on April 2013 rental values. The 2020 Valuation List will be based on April 2018 rental values.
NAV is used together with district and regional business rates poundages to calculate the actual bills for businesses. LPS is planning to release these poundages on Friday 14th February 2020.
Analysing the new list Colliers has noted:
- An overall increase of 6.8% on the 2015 List values.
- A large proportion of the NAV increase is within the Grade A office sector, with values increasing by over 30% over their 2015 values, particularly in Belfast. The Soloist Building in Belfast for example, is expecting around a 36% increase on its 2015 List Entry and the Metro Building an increase of over 33%.
- The picture in Belfast city centre retail has been mixed. Donegall Place and Victoria Square values remain unchanged on the 2015 List values, however Castlecourt has seen a decline of 27.41% on 2015 list values, as expected. Castle Lane, which witnessed an uplift in footfall, following the Primark fire has increased by over 11% on its 2015 values.
- Out of town retailing is more locational rent specific but generally the status quo has been maintained, with some local wins for ratepayers.
- Regional town centre retail values have fallen in some areas. Bangor Main Street, for example, which has witnessed steady vacancy, is seeing an approximate 24% reduction in 2015 List Values. This will be welcomed by local ratepayers.
- Supermarket values have fallen from their 2015 List values. Springhill in Bangor will see a reduction in its NAV of 15% effective from April 2020.
- Hotels and city centre bars (particularly in the Cathedral Quarter of Belfast) are going to see a large increase in their rates bills. More than 90% of hotels have had their valuations increased.
- Interestingly, NAV for Purpose Built Student Accommodation in the city centre has also increased. One of the biggest schemes, on Great Patrick Street, has seen its rateable value increase by more than 70%. By contrast PBSA does not attract rates in England and Wales.
Commenting on the new list, David Hughes of Colliers International, based in Belfast, said, “NAV rises of over 30% will have a major impact on some businesses once the new rates bills are introduced in April. Such businesses have already been suffering as a result of Brexit uncertainty and increased costs. We suggest business owners carefully check their new valuations and seek professional help to challenge on or after 1 April 2020, if they feel that their new NAVs are unreasonable. We will certainly be looking closely to do this for our clients.”
John Webber, Head of Business Rates at Colliers International added, “Although the business rating system in Northern Ireland is very different to Great Britain's, with five yearly valuations and an even more complicated appeals system, the elephant in the room in both places remains the multiplier. At over 50% in England and Wales, this is an eye-watering 60% plus in some areas of Northern Ireland. Whilst we await to see actual rate poundages on February 14th we are expecting these to remain high and at such levels will be crippling to businesses. As in the rest of the UK, we need decent business rates reform in Northern Ireland and taxes that encourage rather than punish businesses.”