Businesses occupying top-grade office space in the central business districts of Birmingham, Leeds and Manchester are set for significant increases in their business rates bills from April 2026, according to analysis by Colliers’ Business Rates team.
Colliers estimates that occupiers of prime Grade A office space in Birmingham could see their rates bills rise by as much as 26% next year. In Manchester, bills are expected to increase by 25%, and in Leeds, the increase could be as high as 44%.
The increases are attributed to strong rental growth for best-in-class office space, which has remained in short supply and high demand in all three cities.
Analysis of rental values at the Valuation date of 1 April 2024 indicates that rateable values have surged since the previous rating list, with Birmingham’s rateable values (RVs) rising by 45%, Manchester’s by 44%, and Leeds’ by 67% over the past three years.
Colliers expects these changes, combined with an anticipated Uniform Business Rate (UBR) of £0.48 for 2026, to result in substantial increases in rates liabilities for prime office occupiers.
For 2026/27, business rates bills per square foot in Birmingham are forecast to rise from £15.98 to £22.15, in Leeds from £12.37 to £19.69, and in Manchester from £15.21 to £20.90.
John Webber, head of business rates at Colliers, said: “Of course we are talking about the best office space in these regional centres – in the CBDs – and there will be poorer stock elsewhere not seeing such a high growth in rental values and therefore in liability.
“Similarly, even with these hikes, the rents and rates bills in these business areas will still be significantly more attractive than in London. Our recent London office research estimated that 13 out of 27 London business areas will have business rates bills based at over £40 per square foot after the Revaluation. These regional centres are generally about half of that.
“Even so, in the local regional market these rises will be significant – and all point to the increasing burden that business rates bring onto businesses, at a time when they are facing other rising costs elsewhere. This may curb further investment and expansion.
Webber added: “Finance directors and CEOs of businesses in prime regional office space will need to be budgeting and planning for increased office occupancy costs within their property strategy, and using really robust local market expertise to challenge any inappropriate increases published in the Draft List later this year.”
The 2026 Revaluation, set to come into effect from next April, is expected to impact business planning for many office occupiers in regional city centres as they assess future occupancy costs.
Read the orginal article: https://propertyindustryeye.com/prime-office-occupiers-in-regional-cities-face-rate-hikes-of-up-to-44/
