New business rates which come into force in April could act as a driver for new store openings for some retailers, according to John Webber, head of business rates at Colliers.
Webber cites the example of Marks & Spencer (M&S), which announced plans last week to invest £480m across its UK portfolio and open five new large stores.
“Obviously other factors will play a part, 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,” said Webber.
Colliers estimates M&S could see a circa £70m drop in its annual rates bill in the UK in April, compared with its rates bill last year – an approximate 23% reduction – with the retailer seeing its rates bill drop by 69% in Ashford, 61% at its Middlesborough store, 60% at the Trafford Centre, 60% in Croydon and 47% at Bluewater.
In terms of the five new stores M&S intends to open, Webber said the rates liability of its new site in the former Debenhams department store at the Bullring, Birmingham, will be around 47% lower in the new April list, which would save the business more than half a million pounds annually in rates payable.
“Across the board there will be an overall substantial reduction and surely will be taken into account in M& S’s decisions to either keep stores open or open new ones,” added Webber. “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.”
