Firms demolish warehouses to avoid rate hike
November 25th 2008

Logistics firms have resorted to demolishing empty warehouses to avoid being stung by Empty Property Rate Rules, which came into force earlier this year, according to the UK Warehouse Association.

UKWA member company, East Coast Storage, has demolished an empty storage unit at its site in Kings Lynn to avoid the tax, while The Potter Group, which operates some 1.6 million square feet of covered warehousing at five sites throughout the UK, also recently knocked down an empty warehouse to save on rates. Furthermore the change in the rating system has forced The Potter Group to rethink plans to build a new store.

"The fact that this new legislation not only encourages the early demolition of older empty warehouse buildings but also discourages the construction of new speculative warehouses, means that when the market recovers there will be a shortage of available warehouse space and that will result in higher rents," says UKWA chief, Roger Williams. "It is, quite frankly, an absurd situation."

Full story in the forthcoming December print issue of HSS.

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