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    • square bear
    • By square bear 9th Feb 18, 10:00 AM
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    square bear
    Empty commercial property benefits?
    • #1
    • 9th Feb 18, 10:00 AM
    Empty commercial property benefits? 9th Feb 18 at 10:00 AM
    I hope this is a suitable place to ask this question because I can't see a section for commercial property on here.

    I just want to understand a bit more about how commercial property rules benefit the owner, especially when it's empty.

    I will add that I don't own one.

    In most places I visit there are many small and large former shops, offices or workshops which are empty. Often with a To Let sign or no sign at all. Not many showing 'For sale'. Some of these look as though they've been empty for years, one near where I work has been empty for at least 30 years and it's on a main road.

    There must be a benefit to some landlords allowing a place to lie empty for years (tax relief, subsidies etc) and just watching the price of the property rise without actually doing anything to it? Otherwise, they would be just draining money, surely?

    Also, often the first floor of a commercial can often be an active shop with many customers but when you look at the floors above it shows empty, dilapidated rooms which could be renovated to be let out for housing.

    Is there a method in the madness or is there business sense in what some owners are doing?
Page 1
    • davidmcn
    • By davidmcn 9th Feb 18, 10:09 AM
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    davidmcn
    • #2
    • 9th Feb 18, 10:09 AM
    • #2
    • 9th Feb 18, 10:09 AM
    The upper floors bit is partly a planning issue and partly because if you wanted to make it into separately-occupied housing etc you'd need to build new stairs / lifts / entrance doors, which would mean removing much of the (valuable) ground floor space.

    Also not all commercial occupiers want to have new upstairs neighbours moaning about noise/smell etc, and there's the potential that they may in the future want to add it back into the ground floor commercial space.
    • square bear
    • By square bear 9th Feb 18, 10:52 AM
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    square bear
    • #3
    • 9th Feb 18, 10:52 AM
    • #3
    • 9th Feb 18, 10:52 AM
    The upper part on some of these buildings can be 2-3 levels and if money was spent on renovations then surely it would be returned once let for 2-3 years.
    I get what you mean about smell/noise for the upper tenants if above a take-away or taxi office. But in some cases it may only be a newspaper shop or standard office on the ground floor.

    Mostly though, if the whole building was empty what benefits are there to leaving it that way?
    • eddddy
    • By eddddy 9th Feb 18, 10:58 AM
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    eddddy
    • #4
    • 9th Feb 18, 10:58 AM
    • #4
    • 9th Feb 18, 10:58 AM
    There's no real benefit to keeping commercial property empty. In fact, it costs money - business rates are still payable, insurance premiums are increased and perhaps there are added security costs.

    It's just down to low demand, due to business factors.

    The growth of online sales and custom-built 'out-of-town' shopping areas, custom-built 'out-of-town' office parks with flexible space, hot-desking, good road connections etc, means that a lot of older commercial property has become redundant.

    Sometimes property can sit empty for a year or two, whilst the owners try to get planning consent for redevelopment.


    There's an 'edge-case' where building owners can't get consent to redevelop - so they try to keep a building un-let / un-sold for a few years to try to prove to planners that it's not a viable building in it's current state. But that's rare - and it tends to relate to 'important' buildings.
    • davidmcn
    • By davidmcn 9th Feb 18, 11:08 AM
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    davidmcn
    • #5
    • 9th Feb 18, 11:08 AM
    • #5
    • 9th Feb 18, 11:08 AM
    Mostly though, if the whole building was empty what benefits are there to leaving it that way?
    Originally posted by square bear
    There aren't any secret "benefits", if it's empty it's costing the landlord money. Commercial properties often have lower demand and tend to require more money sunk into them to change use or occupier. If there's the prospect of redevelopment on the horizon then you may as well sit and wait, even if that means the place being unoccupied for several years.
    • Doozergirl
    • By Doozergirl 9th Feb 18, 11:24 AM
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    Doozergirl
    • #6
    • 9th Feb 18, 11:24 AM
    • #6
    • 9th Feb 18, 11:24 AM
    In our High Street a lot of the property is owned by bug investment companies, pension funds etc. They advertise them with ridiculous rents - there doesn!!!8217;t seem to be much impetus to make things work on a local level.
    Everything that is supposed to be in heaven is already here on earth.
    • G_M
    • By G_M 9th Feb 18, 11:32 AM
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    G_M
    • #7
    • 9th Feb 18, 11:32 AM
    • #7
    • 9th Feb 18, 11:32 AM
    It's down to Tesco and the like taking business away from High streets. Fewer & fewer businesses can make money in the High street

    You'll also have seen the large number of charity shops in these areas. The charity ays the insurance, rates etc but gets the shop (usually) free, which is better than it being left empty and costing the owner mone.

    I've also come across examples where a supermarket opened a new, bigger, store but deliberately left their older smaller one empty. This is to prevent a rival supermarket using it and increasing local competition.
    • Thrugelmir
    • By Thrugelmir 9th Feb 18, 11:37 AM
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    Thrugelmir
    • #8
    • 9th Feb 18, 11:37 AM
    • #8
    • 9th Feb 18, 11:37 AM
    It's down to Tesco and the like taking business away from High streets. Fewer & fewer businesses can make money in the High street
    Originally posted by G_M
    Now Amazon and online shopping. Tesco is utilising it's floor space in different ways, such as sub letting.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • davidmcn
    • By davidmcn 9th Feb 18, 12:34 PM
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    davidmcn
    • #9
    • 9th Feb 18, 12:34 PM
    • #9
    • 9th Feb 18, 12:34 PM
    You'll also have seen the large number of charity shops in these areas. The charity pays the insurance, rates etc but gets the shop (usually) free, which is better than it being left empty and costing the owner money.
    Originally posted by G_M
    And a lot of the commercial occupiers are similarly allowed to stay on rent-free deals after the end of their lease, until such time as the landlord finds a better offer.
    • knightstyle
    • By knightstyle 9th Feb 18, 1:46 PM
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    knightstyle
    There are a couple of shops I know of with two stories above that have been empty for over 12 years, No for sale or to let signs and the upper windows are starting to rot badly.
    So do the owners still pay business rates etc? Is it a tax relief scam or perhaps money laundering?
    • davidmcn
    • By davidmcn 9th Feb 18, 1:55 PM
    • 7,837 Posts
    • 8,019 Thanks
    davidmcn
    There are a couple of shops I know of with two stories above that have been empty for over 12 years, No for sale or to let signs and the upper windows are starting to rot badly.
    So do the owners still pay business rates etc? Is it a tax relief scam or perhaps money laundering?
    Originally posted by knightstyle
    Rates are payable, but based on whatever the rentable value of some knackered old storage space etc would be. Not sure how any tax relief or money laundering would work? The spaces simply aren't worthwhile doing anything else with.

    In ye olden days, shops would typically have needed more space for stock rooms, but nowadays they're more likely to have everything delivered just-in-time from big warehouses elsewhere.
    • lincroft1710
    • By lincroft1710 9th Feb 18, 2:25 PM
    • 10,729 Posts
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    lincroft1710
    There are a couple of shops I know of with two stories above that have been empty for over 12 years, No for sale or to let signs and the upper windows are starting to rot badly.
    So do the owners still pay business rates etc? Is it a tax relief scam or perhaps money laundering?
    Originally posted by knightstyle
    If the lease includes the upper floors then the rating assessment will reflect the whole premises. With shops the price per sq m is highest for the shop part, in larger shops the price decreases in stages as you work back ("zoning"). Upper floors are assessed at a fraction of the ground floor, so costs of the empty floors are proportionately minimal.
    • cloo
    • By cloo 9th Feb 18, 3:36 PM
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    cloo
    There used to be some, if not benefits, at least some help with empty shops with business rates relief, but that has been cut back. The fact is, I'm not sure why anyone would want to open a shop in a local high street these days, it's nigh on impossible to make any money as an independent local shop. People use chain shops/supermarkets for essentials, online or shops in malls/town centres for clothes and gifts and they're just not around during the daytime when these shops tend to be open, certainly in big city suburbs. I often think local shops in commuter areas would do better to be open 12-8 every day, with maybe a day off during the week and then open on Sundays, unlike the current usual opening of 10-5 Monday to Saturday.
    • jamesperrett
    • By jamesperrett 9th Feb 18, 10:54 PM
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    jamesperrett
    Often with a To Let sign or no sign at all. Not many showing 'For sale'.
    Originally posted by square bear
    You may see a sign saying 'All Enquiries' - this often means that the landlord would consider selling the lease.
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