Rates threat to vacant pubs

A pubco property boss has said that the empty-property relief rate changes will not alter how his company looks at empty sites.

Punch Taverns property and development director Neil Griffiths said: "It is always our intention to reopen sites with a suitable tenant behind the bar as soon as possible. Empty properties are no use to us."

There has been speculation in the trade that some landlords could offer sites at lower rents and premiums to avoid leaving them empty or simply sell them off cheaply.

Mark Greig, managing director of Paramount Investments, said: "Pubcos will find themselves having to pay full rates on vacant property and will seek to sell."

Regulations have been laid in Parliament to enable the reforms, which will come into effect on 1 April. Under the revised system, full business rates apply to commercial property left vacant for more than three months.

The changes will penalise property landlords who have no choice but to leave a premises empty, or who close to refurbish for more than three months. The legislation may cause a lot of empty pubs to hit the market in the coming months as operators dodge the charges.

Konrad Szymanski, of Humberstones, said: "The Chancellor's announcement to remove tax relief on empty properties will inflict added pressure on licensees and developers who may look for longer, less flexible leases, increased levels of rent, or inflated purchase prices to compensate."

The reforms:

l Increase the empty-property rate from 50% to 100% of the basic occupied business rate, to encourage owners to

re-let, re-develop or sell their properties to reduce the need for new development on green-field sites

l Provide a new power to reduce the empty-property rate, to enable ministers to respond to changing conditions in the property market

l Allow for measures to be implemented to tackle deliberate dereliction by ensuring those who deliberately render their property beyond economic repair continue to be liable for empty-property rates

l Extend the exemption from empty-property rates to companies in administration, as well as those in liquidation.