2023 Revaluation Business Rates | Industrial and Logistics

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Colliers | December 2021

Industrial & Logistics

2023 Business

Significant increase in business

rates predicted from April 2023
Rates Revaluation

2023 Revaluation Business Rates | Industrial and Logistics

1

Colliers | December 2021

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Colliers | December 2021

Colliers | December 2021

2023 Revaluation Business Rates | Industrial and Logistics

2023 Revaluation Business Rates | Industrial and Logistics

Rental growth fuels likely
rates liability increase
When the Valuation Office Agency (VOA) carries
out its 2023 Rating Revaluation, it will be basing
the new assessments on rental values as of
1 April 2021. Should the VOA assess the values
correctly and follow the rental growth trends
seen since the last valuation date back in April
2015, industrial and warehouse operators will
see a significant increase in their liabilities
from 1 April 2023, when the new values come
into effect.
The industrial and logistics sector has seen
sustained rental growth since the VOA last
revalued property for business rates in April
2017. Those property valuations were based on
market rental valuations from April 2015 and
since then, demand for warehousing has surged,
as consumer demand has increasingly shifted
to online goods and services, which has been
further accelerated by the Covid-19 pandemic. In
average by 29.9% between the Rating Revaluation
dates of April 2015 and April 2021.
As our Rents Map data below shows, London
witnessed the largest increase at 54.2%, but all
regions have experienced robust rental growth.
With the VOA basing their valuations on April
2021 market rental values, prime industrial
assets across every region are facing signifcant
increases in their business rates valuations come
April 2023.
Average Prime Industrial & Logistics Rental
Growth - Q1 2015 vs Q1 2021
Rental growth
Geography
(Q1 2015 vs Q1 2021)
London 54.2%
South West 36.1%

response, companies have sought to realign and South East 34.4%

streamline their supply chains. These factors, East of England 32.3%
coupled with a constrained supply pipeline,
North East 28.2%
has resulted in unprecedented rental growth
for industrial and logistics space across the UK. West Midlands 23.1%

North West 22.8%

Prime warehousing facing Rateable Value
Yorkshire & Humber 20.8%
increases of up to 54%
East Midlands 17.2%
Colliers’ research shows that prime industrial Average 29.9%
and logistics rents across England increased on
Source: Colliers Rents Map
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Colliers | December 2021

Colliers | December 2021

2023 Revaluation Business Rates | Industrial and Logistics

2023 Revaluation Business Rates | Industrial and Logistics

Average Rateable Value increase of 21.8% a substantial rise in their rates bills from MSCI Average Industrial & Logistics Rental Growth - Q1 2015 vs Q1 2021
predicted nationally April 2023.
45%
Indeed, whilst the prime sector has seen the
39.9%
most prominent growth, as the MSCI average 40%
industrial and logistics index demonstrates, rents As a result of the significant
across England and Wales have cumulatively rental growth witnessed across 35%

Average rental growth (%)

the industrial & logistics sector, 30.1% 29.9%
increased by 21.8% over this period, so all 30%
industrial stock, not just prime, is vulnerable to Colliers is forecasting an average
significant business rates increases from April increase of 18.7% on rates payable 25%
2023 onwards. from April 2023*” 19.3% 18.9% 18.5%
20% 17.6%
16.4%
14.9%
Occupiers’ business rates liabilities set to John Webber, Head of Business Rates 15% 12.1%
rise sharply
10%

As our research demonstrates, if the VOA decide Industrial & Logistics operators should now 5%
to mirror the rental growth experienced across be factoring in the very real possibility of a
the industrialand logistics sector, London and the significant increase in rates liability, impacting 0%
South of England will likely see the largest rates their overheads from 2023 onwards. London Eastern South South York & North Wales North West East
increases, but all regions are set to experience East West Humber West East Midlands Midlands

*Assuming a Uniform Business Rate Multiplier of 0.499 and Government removes upward transition. Source: MSCI
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Colliers | December 2021

Colliers | December 2021

2023 Revaluation Business Rates | Industrial and Logistics

2023 Revaluation Business Rates | Industrial and Logistics

Are you prepared?
Being proactive is key. It is fundamental
that occupiers take advice now to fully
understand the likely impact of the 2023
business rates revaluation and avoid any
unexpected cost increases.
By appointing Colliers as your advisor, we will
help you prepare and ensure your business
rates are as accurate and low as possible.
Our services include:
• 2023 Rateable Value and liability
estimates – to assist you with budgeting
for future rates bills
• 2023 Draft List Rateable Value Review –
once published in December 2022, we
can advise whether to appeal the new
assessment

With over 50 years of experience in the • Current Rateable Value Appeal –

industry, we offer a complete range of
business rates services delivered by a team
of over 100 experts across the UK. We have
dedicated individuals specialising in the
UK industrial and logistics sectors, whose
knowledge and expertise will ensure you are
well placed to navigate the 2023 Revaluation.
We have saved £1.2 billion for our clients
since 2010. £500 million of savings have also
been recovered by our specialist Accurates
team, who are dedicated to recovering historic
business rates for our clients, with a national
team of audit specialists, including ex local
authority tax inspectors.
advise whether existing assessments are
correct and raise appeals to potentially
secure savings back to 1st April 2017
• Property Usage Review – comprehensive
review of your property usage and stock
capacity to determine whether you’re paying
the correct level of business rates
• Rate Account Management – we manage
our client rates liability regarding portfolio
changes
• Forensic Rate Audit – we can establish if
your current and historic business rates bill
calculations are correct and challenge them
where they’re not

Colliers have a dedicated Industrial and Logistics team who we work closely with. This
renowned team advise on all aspects of the industrial, distribution and logistics sector
whether you’re an investor, developer of occupier, allowing us to offer a fully integrated
service for our clients.
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Colliers | December 2021

Colliers | December 2021

2023 Revaluation Business Rates | Industrial and Logistics

2023 Revaluation Business Rates | Industrial and Logistics

Get in touch Edinburgh
Glasgow
John Webber
Head of Rating Dublin
John.Webber@colliers.com
+44 20 7344 6967 Belfast

Matt Hawkins Leeds

Director - Rating Manchester
Matt.Hawkins@colliers.com
+44 1895 457 713 Liverpool

Matthew Webb Sheffield

Director - Rating
Matthew.Webb@colliers.com Birmingham
+44 1895 457 727

Peter Gould Uxbridge

Director - Rating London
Peter.Gould@colliers.com
+44 121 265 7532 Bristol

Len Rosso Jersey

Head of Industrial & Logistics
Len.Rosso@colliers.com
+44 20 7487 1765

Colliers
50 George Street
Colliers and Accurates are trading names of Colliers International Rating UK LLP which is a limited liability partnership registered
London W1U 7GA
in England and Wales with registered number OC391634. Our registered office is at 50 George Street, London W1U 7GA. (21524). www.colliers.com