Occupiers will face a sudden added strain on cashflow that many have not budgeted for when the expected 5% rise in business rates is introduced by the Government in April, according to Paul Gagan, director of portfolio asset management at DTZ in Manchester.
Gagan said: "These proposed rises will further hurt the commercial property sector. From the occupiers' perspective this is another rise in the costs of occupation which they can ill afford. In these times where occupiers are having to carefully manage their cash flow a rise of this magnitude is unlikely to have been budgeted for."
Gagan continued: "From the investor's point of view an increase in business rates will heighten their nervousness about the ongoing viability of their occupier base which has already been significantly impacted upon and eroded through an unprecedented number of occupier collapses during the past six months across all industry sectors in the UK."