Image: Canary Wharf Elizabeth Line station under construction
Office property along the Elizabeth Line – London’s new Underground route – will face ‘substantial’ business rate rises in 2017 according to new data from JLL.
Many businesses on the fringe of London, from Maidenhead to Stratford, will face rate rises in excess of 30 per cent, while other corners of the capital will see rates creep up by 10-20 per cent as a result of the improved connectivity.
But it’s not all bad news, according to experts. While rates will rise significantly in some towns, which have previously been considered more cost effective locations than central London for Grade A office property, they will still benefit from lower occupational costs.
“While some regions of the South East, particularly those with an Elizabeth Line station, will face substantial business rate increases, these towns will still have a significant occupational cost advantage to occupiers when compared to the costs of locating within core Central London,” said James Finnis, Head of South East office agency at JLL.
The data shows that offices in Central London Villages (Paddington through to Whitechapel) will continue to pay the highest business rates. Occupiers looking to stay within the Capital will find the lowest rates for grade A office stock in Canary Wharf and Stratford. Outside of London, towns such as Reading and Maidenhead which are delivering high quality office stock will continue to offer lower occupational costs than those in Central London despite significant rate increases.
As a result of the rate rise, Finnis expects more businesses to ase themseleves in the wider South East region where “major new, highly efficient, stock is being delivered close to major infrastructure hubs at substantially lower overall occupational costs.”
Phillip Jay, director of rating, JLL, added: “We are regularly being asked what impact the Elizabeth Line and the 2017 revaluation will have on rates. Our data does not consider transitional relief as this will not be known until the autumn but gives a good indication as to what occupiers could pay and how to budget appropriately. Although we expect rate increases to be cushioned by transitional relief, the process by which these changes are phased in gradually, there will still be major impacts for many occupiers.
“We believe Canary Wharf and Stratford in London and Reading in the South East will be the most attractive locations for occupiers along line.”
Director of rating