BPF: Lower rent bad news for small firms
Aug 19 2008
Experts are saying the recent drop in rent on shops is not good news for retail businesses as it will result in lesser availability of premises.
Rent for high street shops in the UK fell by an average of 0.3 per cent in July, the first month-on-month fall since 2001, according to the CB Richard Ellis UK monthly index.
However, new regulations making commercial property owners pay the full occupied rates on their outlets, even when not let to tenants, is harming the supply of buildings for retail businesses, experts say.
Falling yields and expensive rates could cause increasing numbers of landlords to consider selling their premises, the British Property Federation (BPF) claims.
This, in turn, is set to 'cause further trauma' to already-struggling retail businesses as the supply of outlets is decreased, comments Andrew Teacher, the organisation's head of media.
Although there will always be a demand for property in prime locations, smaller companies in secondary locations will suffer, he believes.
The association has proposed that the government gradually reapplies business rate relief to ease the pressure on commercial property owners and encourage them to keep their premises.
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