The latest hike in business rates will hit occupiers and investors at a time when both are feeling the pinch, says DTZ's Sean Brew.
Brew, Director in Portfolio Asset Management at the global real estate adviser told propertyweek.com: 'These proposed rises will further hurt the commercial property sector.
'From the occupiers’ perspective this is another rise in the costs of occupation which they can ill afford. In these times where occupiers are having to carefully manage their cash flow a rise of this magnitude is unlikely to have been budgeted for and appears increasingly difficult to reconcile with inflation now at 0%.'
Brew said there would also be an impact on the investor sentiment: 'From the investors point of view an increase in business rates will heighten their nervousness about the ongoing viability of their occupier base which has already been significantly impacted upon and eroded through an unprecedented number of occupier collapses during the past 6 months across all industry sectors in the UK – by way of example the retail sector alone saw over 4,300 high street units fall vacant in 2008 and over 1,250 units thus far in 2009.'
'This will place a greater than ever emphasis upon ongoing engagement and alignment between investors and their occupier base to ensure they work closely together to mutual benefit.
'Initiatives to assist in this process can include migrating to monthly - from quarterly - rent payments, arrears repayment plans, interest write offs, lease regearing and ensuring service charges deliver optimum value.'
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