Pressure on retail
St James boss wants online tax and longer rates freeze
St James: opens in the summer
Martin Perry, who is spearheading the new St James Quarter shopping development in Edinburgh, has joined calls for an online retail tax.
He has also demanded a suspension of business rates for as long as it takes for a full recovery of bricks and mortar retail.
Mr Perry, real estate director of development at Nuveen Real Estate, said government needed to act “urgently” to the crisis facing the sector.
Chancellor Rishi Sunak was expected to announce an online tax in his Budget last month but is thought to have delayed his plans until the autumn to discuss what is a global issue with other governments.
Mr Perry’s comments came in an update on the property market by Lismore Real Estate Advisors which spells out the impact of online retailing on physical shops.
It reveals that shopping centre owners in Scotland looking to sell schemes with limited alternative uses are having to accept reductions in value of up to 75%.
James Craig Walk at St James
The update is published three months before the scheduled opening of the delayed £1 billion St James Quarter, with 85 retail units accounting for more than 20% of the city’s retail offering.
Mr Perry said: “The challenge over the next five years is that the cost/value relationship has been substantially altered by digital progress [online shopping] and the property industry needs to respond faster to this and modernise practices in all areas including governance, investment, leasing and operation.
“There are significant challenges ahead but with the right changes, approach and investment, good returns for all participants can still be achieved.”
He added: “There are two key measures that the Government should be urgently enacting. The first is the suspension of business rates for the entire period to allow for full recovery of physical retail.
“Secondly, the need to level the playing field between physical retailers and online retailers by introducing online sales taxes and allowing the revenue generated to be put back into the upgrading of physical retail environments, such as town centres, before these options cease to become viable.”
The Lismore research found that 75% of respondents expect to either decrease or maintain their exposure to the retail sector, with a quarter seeking to increase their exposure, albeit this is predominantly through an increase in exposure to retail warehousing and food stores.