OT:commercial rents in malls ?

[Jethro_uk]

Following on from the Jessops thread, and noting how many empty units there are in our local shopping mall, I was wondering how the owner of such ventures operate, and how business rates are managed. Is each unit rated separately, or is the whole centre rated, and then each unit billed pro rata. Or are rates rolled into the rent ?

How often are rents reviewed ? Is there a common term for a break clause ?

I've just got visions of mall owners trying to squeeze the same turnover from an ever decreasing number of shops. And, of course, facing the same issue that all businesses face when they have to offer better terms to new customers than existing ones.

I counted 16 empty units yesterday out of about 50. And I really can't see them ever being opened again. After all, the Millets unit (which is one of the smallest) hasn't been let, and that went in 2009

[Andrew Gabriel]

Each unit is separately rated. (There's probably also a rates charge for the other parts of the shopping mall - I don't know.)

IIRC, business rates are set by central government, but collected by local authority. For last 5 years or so, rates are still due on empty units and have to be paid by the landlord. Rates are significantly reduced for charity shops, which is why you will see landlords filling empty units with charity shops as fast as they can - it saves them loads over having the premises empty.

Rates and rents are unrelated.

This will depend on the landlord, and can often be negotiated down at the individual unit level.

Shopping in town centres is dying due to internet pricing and other factors, and accelerated by local authorities charging ever more for parking, etc.

[Brian Gaff]

Yup its happening in Kingston as well. From the grapevine I gather it really seems to depend on who owns that building, one might suspect that some owners do not want to let their shops, maybe hoping to redevelop the area or something.

Brian

[The Natural Philosopher]

when I was renting commercial office space, they left the building empty for 4 years rather than get locked into a low rental situation.

Why? because that would have devalued their assets - property is valued on its ground rent....

[harry]

I spoke to a shopkeeper about this topic. He had a medium sized shop in a small town, Ledbury. The rent was =A340,000, the rates/council tax was another =A323,000 Per year.

Dunno how they make any money at all.

[Jethro_uk]

So he needs to make £63,000 (£172/day for a 7 day week, £206/day for 305 days a year) before he opens the doors in the morning. Plus insurance. Then there's water rates, refuse collection and heat/light.

When I worked in trade, customers who whinged at a labour rate of £25/ hour invariably were unaware of such figures.....

[charles]

In general Charity shops pay market rents. They also tend to be be good payers,