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Will business rates be a driver in new store openings?

20 01 23 Will business rates be a driver in new store openings hero

Colliers looks at the M&S decision to open in the Bullring and estimates M&S will save millions of pounds in rates bills come the new rating list in April.


New rates bills which will come into force in April following the 2023 Rating Revaluation will provide a welcome relief for many of the larger retailers and already look likely to be providing a spur to new store openings, according to John Webber, Head of Business Rates at Colliers.
 
Webber cites the news that M&S is planning to make a £480 million investment across its UK stores, generating over 3400 jobs and opening five new stores in 2023. The new stores will be bigger full line stores in Leeds White Rose, Liverpool One, the Bullring, Birmingham, Manchester Trafford Centre and Lakeside Thurrock* ranging from 65,000 to 90,000  sq. ft.
 
“Obviously other factors will play a part,” says Webber, “but there is no doubt a more favourable business rates environment will help such store expansion, particularly as the government listened to the industry and has not brought in a downwards transition scheme, so that retailers will be paying lower rate bills immediately following the start of the new list in April.”
 
Overall, the retail sector will see 10% decrease in Rateable Value (and rates bills) in the next list, although in some locations Colliers are expecting to see much higher reductions of 30 or 40%. Large department stores and hypermarkets were among the biggest winners for example in Oxford Street in London, RVs have fallen by approximately 30%.
 
Looking at M&S’s decision to open its new store in the vacant Debenham building in the Bullring, Colliers has estimated, looking at a similar property in the centre, that the rates liability of the old Debenhams store will reduce by around 47% in the new list in April. This would work out at a saving of over half a million pounds in annual business rates payable.
 
And looking at M&S’s portfolio as a whole, Colliers has estimated that M&S should see around a £70 million drop in its annual rates bills in the UK come the Revaluation in April, compared to its rates bills this last year – an approximate reduction of about 23%.
 
Some particular stores that stand out with big percentage reductions are the Marks and Spencer’s in Middlesborough, where rates bills are expected to drop (61%), Ashford (-69%), Trafford Centre Manchester (-60%), Blue Water (-47%), Westfield (-49%) Croydon (-60%) , Nottingham, (-53%)  and Glasgow (-50%).
 
“Across the board there will be an overall  substantial reduction,” says Webber,  “and surely will be taken into account in M& S’s decisions to either keep stores open or open new ones.”
 
In making the decision not to introduce downwards transition in its latest Revaluation, the Government finally got one thing in its business rates policy right. Let’s hope we see other retailers also feel the benefits of business rates reductions and make the same decisions to invest in new store openings and jobs.”

*The new stores are: 

65,000 sq. ft store in the vacant Debenhams building at the Bullring in Birmingham – to open in autumn 2023 
97,000 sq. ft store in Leeds White Rose- to open in Summer 2023
70, 000 sq. ft in Liverpool One - to open in Summer 2023 
 96,000 sq. ft store in Manchester’s Trafford Centre to open in winter 2023
98,000 sq. ft in Lakeside Thurrock, to open in winter 2023.

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John Webber

Head of Rating

Rating

Birmingham

I have over 35 years’ experience in the rating industry and lead a 135 plus rating team at Colliers.  When I took over responsibility for the team in 2005, it consisted of only a dozen people and has now grown into one of the leading rating advisory teams in the country.  I am a member of Colliers' UK Management Executive as well as sitting on the company’s Balance in Business Committee. 

I am regularly called upon by the national media to give my views on a range of business rates issues and I am involved in lobbying MPs/ministers and senior civil servants on business rates matters.

I started my career in the Valuation Office Agency in Kidderminster.  I joined Gerald Eve in 2000 where I spent 10 years before moving to Gooch Webster (now Colliers). I sit on the National Retail Panel of Rating Surveyors Association which provides guidance on how the RSA town committees work with the VOA and valuation matters.  I have also held the postion as Chair of the RICS Rating Diploma Committee having passed the prestigious qualification in 2014. I currently sit on the Rating Surveyors Association National Committee .

Along with Philip Harrison we founded 'Accurates' in 2007, the Collier's Compliance and Audit team, which although forms an integral part of the Rating team is now a leading brand in its own right.

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Suzy Simpson

Head of Content, Communications and PR

PR

London - West End

As Head of Content, Communications & PR for Colliers in the UK, I am responsible for driving the strategic direction of corporate communications, media relations, and the programming and production of multi-channel content to engage external and internal audiences across the UK.

Get in touch for help with: 

  • Content Communication Strategy 
  • Media Relations
  • Corporate & Internal Communications
  • Media Training & Personal Brand Training

 

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