LAST month, Ieuan Wyn Jones, the Welsh Assembly’s Deputy First Minister, asked what support the businesses of North Wales need if they are to flourish and grow.
We believe that there is an urgent requirement for a new generation of flexible workspace to support small businesses, and this could be achieved through changes to empty property rates legislation.
Demand for small space at business centres has dramatically increased over the last 12 months, with 70% of these lettings to businesses who are taking space for the very first time.
Yet no new business centres are currently being constructed. Lower capital values and rental levels have had a direct impact on the ability of companies to borrow in order to develop new centres.
This shortage of space will act as a disincentive to those considering setting up their own businesses, and we perceive that there is an urgent need for some form of stimulation to encourage the creation of new space.
Extending for another year the empty property rates exemption for properties with a rateable value of less than £18,000 is encouraging but it is still a short-term measure – and the sector needs future certainty if it is to grow and prosper.
Business centres generally take up to two years to reach an optimum occupancy level of around 85%, so it may be some time before companies actively develop and fill new space.
In the interim, there is a real prospect of business centres being created out of existing traditional premises, which will take less time to refurbish and convert – except that the cost of paying empty rates for the first two years remains a major hurdle in developing viable business environments.
If empty property rates were to be abolished for premises with a rateable value of less than £18,000 on a permanent basis, we are confident that a new generation of business centres will emerge.
Not only will this create space for new entrants into the SME market, but some of these new businesses will graduate into larger space in the traditional property market.
This, in turn, will help the overall regeneration process – and create more rateable income.
