We may once have been a ‘nation of shopkeepers’ but retail is not the easiest sell in the current climate. However, for those still determined to get behind the counter, WJM's Gillian Cowie, offers some handy advice
HARDLY a day goes by without another report on the dramatic decline of retail on the UK High Street. Against that backdrop it is more important than ever for anyone involved in the property industry, the landlords, tenants, investors or start-ups to be properly advised on all aspects of their business including location, rates, incentives, leases, and business structure before setting up shop.
Location
Whether you are a landlord, tenant, new start-up or well established business, location is key. As a result of the issues facing the High Street, there are various Government incentives to encourage town centre diversification.
For example, the stated aim of the Scottish Government’s Town Centre Fund is to enable Local Authorities to stimulate and support economic investments which encourage town centres to diversify creating footfall through local improvements and partnerships.
This includes repurposing buildings and improving access and infrastructure.
It involves initiatives such as encouraging more town centre living to increase town centre footfall, creating a requirement for retail presence.
There are also 37 Business Improvement Districts throughout Scotland. These are parts of a town, tourism or visitor area or commercial district where businesses work together to invest in local improvement. Start-up businesses should consider location carefully to see whether there are any local initiatives or assistance funding available.
Rates
There are rates reliefs available which can benefit both landlords of empty properties and also start-up businesses eg the Small Business Bonus Scheme.
All empty properties can get 50% relief from business rates for the first three months they are empty with a 10% discount thereafter. 100% relief is available for an unoccupied property if it is a listed building, if its rateable value is under a specific threshold, in the event of owner insolvency, or if subject to a CPO amongst other criteria.
Under the Fresh Start initiative, businesses occupying certain long term empty properties may be entitled to 100% business rates discount for the first year in those premises subject to compliance with specific eligibility criteria.
Businesses should contact their local authority to check eligibility criteria.
Incentives
As well as potential incentives from Government and Local Authority initiatives, certain financial incentives may be available for a start-up business looking to lease property.
Most landlords will agree to grant some form of rent free period or rent discount to enable an incoming tenant to recoup some of the capital outlay in terms of fitting out their property.
Landlords may also wish to consider more flexible occupancy agreements to encourage a tenant to sign up.
- Gillian Cowie is a specialist in commercial leasing at Wright, Johnston & Mackenzie wjm.co.uk
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