Vivienne King, chair of Revo’s Executive Board said that while today’s Budget offers badly needed clarity for the property sector, it also raises several new challenges, and falls short of providing the long-term support retail and leisure so urgently needs.
“We welcome the reduction in business rates below the £500,000 threshold, but the price paid by those not favoured with the discount is too high and undermines the declaration that the sector is being supported, raising serious concerns about the future viability of larger anchors. Given that many of these larger properties provide invaluable stewardship to drive footfall to smaller operators, this change introduces a worrying degree of risk for the sector.
“This, alongside further pressures now placed on household finances following a projected 3.5% rise in inflation this year and combined tax increases that will see record highs by 2030, adds another layer of uncertainty for occupiers, owners and investors as they await the outcome on consumer spending.
“The major cities will feel the blows and we will have to see how well they absorb it. But the smaller retail and leisure places, which were already facing massive structural challenges, are likely to feel the sharpest effects. Without thoughtful intervention, we risk accelerating a two-tier market between places still able to draw investment and those struggling to compete.
“In the short term, with disposable incomes taking the hit, today’s measures could weigh heavily on consumer confidence just as the sector is relying on the ‘golden quarter’ of Christmas trading to influences occupancy decisions, trading resilience and investor confidence.
“The fundamentals of UK retail and leisure real estate are strong, and the industry is undoubtably better off with the certainty the budget has delivered following much speculation, but unless national policy recognises the economics of the whole sector, it places investment at risk.”
