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Business RatesCentral London O�ces

Business Rates in London

BUSINESS RATES | CENTRAL LONDON OFFICES | 2016

Cushman & Wakefield’s Business Rates team specialises in Central London o�ces and have a rich history and proven track-record from our involvementin the area. The knowledge, skills and experience of over 50 Rating specialists means we have the resource needed to provide our clients with an unparalleled service o�ering.

Business Rates is one of the most significant costs to o�ce occupiers in Central London. Usuallyit is only surpassed by rent and sta� remuneration; mitigation of this liability can therefore lead to significant cost savings to our clients. Contact our team for a bespoke review of both your current and future rates liability.

With Rateable Values published for the 2017 Revaluation it has been possible to identify significant changes in liability in some areas of the capital. As predicted the King's Cross and City Fringemarkets have seen some of the biggest increases in liability due to the regeneration of these areas.

We are perfectly positioned to be able to assist in planning for, and mitigating, this cost change. Our team leads negotiations in the London O�ce market and have been instrumental in shaping the valuation of o�ce buildings including for:

Change is afoot - but the cost won’t fall

The Government have instigated changes to the Business Rates system with the aim of improving transparency and e�ciency. Whether they will have the desired e�ect or not remains to be seen but they will certainly have an impact on ratepayers.

Locally set Business Rates multipliers by 2020 – each Billing Authority will be able to set their own

multiplier. This could bring inconsistency to liabilities between authorities, artificially manipulating the market

so that some areas gain a competitive advantage.

100% retention of Business Rates receipts by

2020. Pilot schemes including Greater London Authority

from April 2017.

CROSS-RAIL OVER-SUPPLY QUANTUMTREATMENT

OF RENT FREE

*BULK*SAVINGS

Continuous Savings Opportunities

Savings can be generated throughout the entire lifecycle of a property. Whether it be for a Landlord, Developer or Occupier, every stage has triggers that can be used as opportunities to generate savings.

More regular revaluations – at least every three years.

If implemented correctly will re-distribute the burden of taxation more fairly.

Increases in liability to be linked to the Consumer Price Index by 2020

and not the Retail Price Index – generally will lead to lower

liabilities in the future.

Deletion

Phasedoccupation

Phasedvacation

Completionnotice

ContinuousSavings

Opportunities


London Submarkets

The Impact on Rates Liabilities following the 2017 Revaluation

K E N S I N G T O N

O LY M P I A

H Y D E PA R K

S H E P H E R D ’ SB U S H

A C T O N

C H E L S E A

L O N D O N

The Impact of the 2017 Revaluation

Variance within Sub-Markets

?

C H I S W I C K

Mayfair2016/17 Rates Payable: £44psf2017/18 Rates Payable: £45psf

Percentage Increase: 2%

Noho2016/17 Rates Payable: £22psf2017/18 Rates Payable: £27psf

Percentage Increase: 24%Paddington2016/17 Rates Payable: £21psf2017/18 Rates Payable: £28psf


Kensington & Chelsea2016/17 Rates Payable: £15psf2017/18 Rates Payable: £18psf


Hammersmith2016/17 Rates Payable: £13psf2017/18 Rates Payable: £16psf


The variance of Rateable Value changes within sub-markets has been a key feature of the 2017 Revaluation with large percentage changes commonplace. Averages therefore have the potential to mislead, and to obtain accurate estimates we thoroughly recommend contacting our team for a property specific review.

The Uniform Business Rate (inc. small business rates supplement) decreases from 0.497 to 0.479 between 2016/17 and 2017/18. Where Rateable Values haven’t changed between Rating Lists this will lead to a welcome 3.6% decrease in rates liabilities.

O�ces in Central London have experienced strong rental growth in the seven years leading up to the valuation date of 01/04/2015; in some areas rental values have doubled. Consequently occupiers of London o�ces have been hit hard with substantial rates increases for 2017/18 and beyond.

For every new Rating List since 1990, the Government has capped year on year increases / decreases in rates liabilities. Since 1995 most properties were limited to an increase of 12.5% in the first year of a new Rating List. However the Government have announced an increased cap of 42% for properties with a Rateable Value of over £100,000, in London this could be an o�ce as small as 1,200 sq.ft.

Rateable Value increases have varied considerably for micro-locations, with each sub-market showing large variances. Average changes therefore don't show the true story. The graph below shows the typical variance in Rateable Value changes within each sub-market, alongside the average.

AverageCore range of Rateable Value changes

Mayfair St James Soho Paddington Victoria Noho Euston Midtown KingsCross

The City Southbank Kensington& Chelsea

CityFringe

OldStreet

Hammersmith0

20

40

60

80

100

120

CanaryWharf

99 KENSINGTON HIGH STREET2016/17 to 2017/18

Liability Change: 14%

THE ARK2016/17 to 2017/18


1 SHELDON SQUARE2016/17 to 2017/18

Liability Change: -2%

S O H O

L A M B E T H

W H I T E C H A P E L

Why Cushman & Wakefield?

Over 50 years of Rating experience

in Central London and across

the UK

No.1 adviser for occupiers and

landlords in London in

2015

Strength & expertise to lead

negotiationsand fight

your corner

Over 50 dedicated Rating professionals – generating

savings of £200 million for our clients (since 2010)

Cushman & Wakefield have a rich history of advisingclients in London, including:

London Clients

C A M B E R W E L L

Soho2016/17 Rates Payable: £26psf2017/18 Rates Payable: £29psf


Victoria2016/17 Rates Payable: £27psf2017/18 Rates Payable: £27psf


City Fringe2016/17 Rates Payable: £11psf2017/18 Rates Payable: £17psf


Kings Cross2016/17 Rates Payable: £14psf2017/18 Rates Payable: £21psf


Euston2016/17 Rates Payable: £21psf2017/18 Rates Payable: £25psf


The City2016/17 Rates Payable: £19psf2017/18 Rates Payable: £20psf

Percentage Increase: 4%Southbank

2016/17 Rates Payable: £19psf2017/18 Rates Payable: £19psf


Midtown2016/17 Rates Payable: £22psf2017/18 Rates Payable: £23psf


THE SHARD2016/17 to 2017/18


THE WALKIE TALKIE2016/17 to 2017/18


LEADENHALL BUILDING2016/17 to 2017/18


SALESFORCE TOWER2016/17 to 2017/18


LANDSDOWNE HOUSE2016/17 to 2017/18


ZIG ZAG BUILDING2016/17 to 2017/18


KINGS PLACE2016/17 to 2017/18


EUSTON TOWER2016/17 to 2017/18


Canary Wharf2016/17 Rates Payable: £10psf2017/18 Rates Payable: £12psf


C A N A R YW H A R F

1 CANADA SQUARE2016/17 to 2017/18



Case Studies - Savings achieved by our Team

Simmons & Simmons City Point, London

DeloitteNew Street Square, London

LinklatersMilton & Shire House, London

WR BerkleyThe Scalpel Site, London

Savings: £5.55 million


Savings: £2 million


Mayfair St James Soho Paddington Victoria Noho Euston Midtown KingsCross

The City Southbank Kensington& Chelsea

CityFringe

OldStreet

Hammersmith

2016/17 Rates Payable PSF 2017/18 Rates Payable PSF % increase

£44£38

£26 £21 £27 £22 £21 £22 £14 £19 £19£15 £11

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

£0

£10

£20

£30

£40

£50

£60

£45

£40

£29£28

£27£27 £25

£23

£21£20 £19

£18 £17

£11

£17

£13

£16

£10

£12

CanaryWharf

Average liabilities within Sub-Markets

CUSHMAN & WAKEFIELD IS A LEADINGBUSINESS RATES CONSULTANT

28,000Properties with a total Rateable Value of

£1.3 billion

£450 millionof Business Rates liability managed annually

£135 millionof Business Rates savings generated through

challenging Rateable Values since 2010

£50 millionof Business Rates savings generated

through reliefs since 2010

WE CURRENTLY DEAL WITH

Mark HendersonDirect: +44 (0)20 3296 4374Mobile: +44 (0) 7771 921 883 [email protected]

Stephen CookeDirect: +44 (0)20 3296 4372Mobile: +44 (0) 7768 751 [email protected]

Key Contacts

cushmanwakefield.com facebook.com/cushmanwakefield

instagram.com/cushwake @cushwake

Mark O'LearyNationwide Portfolios Direct: +44 (0)203 296 4531Mobile: +44(0)7733 300 [email protected]

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