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Colliers warns of warehouse demolition in Scotland

Colliers warns of warehouse demolition in Scotland

Dozens of older warehouse buildings in Scotland could be demolished within weeks unless the Scottish Government revisits its plans to slash the rates relief available on empty properties, experts at Colliers International have warned.

From 1 April onwards, owners of industrial properties will be liable for 90% of their usual rates after three months, where previously they enjoyed full relief. For those owning older units that are unlikely to find an occupier soon, the only option is likely to be demolition.

 Colliers says many are already seeking quotes from demolition experts, but it isn't too late for the government to find a compromise that could encourage some landlords to redevelop their dilapidated units into much-needed modern industrial space.

The move could be a massive blow to an industrial market dominated by older, smaller units – the kind most likely to be affected by the rates rules.

Data from Savills shows that in the UK as a whole most units are small, and poor quality. Savills classify 72% of the sq ft on the market to be grade B in quality and below, also just 16% of the units on the market are over 300,000 sq ft.

Peter Muir, a director and head of rating for Colliers International in Scotland, said: “Not only will many older buildings be demolished, but developers are being put off from building industrial units on a speculative basis as they will be hit with a hefty bill should they fail to find a tenant immediately.

The changes to rates relief were expected to produce windfall of tens of millions of pounds for the Scottish Government, but Colliers believes the total could be considerably lower as many landlords will opt to demolish their properties, as happened when similar changes were introduced south of the Border.

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