UPDATE (12th December 22): The Valuation Office Agency has pressed pause on a change in business rates that could have left serviced office operators with massive bills.
The proposed changes to business rates would be devastating to the flex market and office market.
On 29 November 2022 it was announced in a statement by Valuation Office Agency that valuations to assess individual serviced offices for business rates would cease, and instead assess the overall workspace as a single large unit.
This surprising decision comes as a massive hit for many service office providers, currently only applicable to those based in London. However, this decision is likely to be rolled out across all service office providers in the UK.
Flex operators are taking space to help ignite a building and provide a much-needed offering to businesses, who are investing in capital to add additional services to the building and splitting the floors accordingly.
❌❌ To then be hit with business rates before letting out the space and for smaller businesses not to benefit from the small business rates relief will restrict any speculative investment being made. Basically decimating any potential for the office market to recover.
❌❌❌ The domino effect …
No speculative investment… office buildings sit empty, unloved… converted to alternative uses… loss of high streets… loss of commercial districts… all of which are bad for the economy. The office market has evolved… We believe the flex market plays an important part in the recovery and evolution of the office sector.
The Flexible Space Association has called for a meeting with the Secretary of State for Business, Energy and Industrial Strategy, The Rt Hon Grant Shapps MP, and we do hope this decision is overturned.
This is certainly a worrying time for the flex market and the wider office market.
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About Omega RE
Omega RE is a commercial property advisory firm based on the South Coast. Providing expert advice to Landlords, Occupiers in the industrial, office and retail markets.
Omega RE is always thinking ‘Outside the Box’ in our advice to clients and the way we do business. We don’t settle for mediocre, we challenge the norm and are dedicated to finding solutions that is best for our clients.
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