Amazon faces soaring business rates payments next year following a 37.6% hike in the rateable value (RV) of its industrial and logistics portfolio, reveals data from Colliers shared with BE News.
Following the publication of the government’s draft rates revaluation list, which comes into force on 1 April 2023, the online giant is set to see its rates bill soar 27.7% in the first year as a result of transitional relief. This will increase further in the second and third years as the relief tapers over the three-year term of the revaluation list.
Some parts of Amazon’s portfolio have been hit harder than others. The RV of its warehouse in Tilbury, Essex, has risen by 74% to £12.3m and at Thurrock, the RV of its warehouse has risen 74% to £12.34m.
While the introduction of upward caps will cushion the blow in the first year, with Amazon’s liability for Thurrock in 2023 to 2024 limited to £4.75m, this is still 31% up on its 2022 to 2023 level of £3.625m.
John Webber, head of business rates at Colliers, said: “There is no doubt that the industrial and logistic sector was the hardest hit in the new revaluation, reflecting the higher rents at the time of the antecedent valuation date in April 2021. The sector will show an average 27.1% increase in rateable value, the largest increase out of all the sectors.
“RV rises such as at Park Royal, London, up 30%, Trafford Park Manchester, up 30%, or Vertex Business Park Bristol, up 45%, are examples of increases in rateable value of some of the best quality industrial and distribution space in the most prime locations of the country.
“To be fair, many logistics businesses were aware of the rental growth between 2015 and 2021 and have been preparing to see substantial rises. This is all part of levelling up. Now businesses in the sector will have certainty to plan for the year ahead.”
