Prime Minister-in-waiting Andy Burnham has indicated that large warehouses could face higher business rates under plans designed to fund relief for pubs and smaller high street businesses, adding a further potential cost pressure for logistics operators.
The proposal would form part of a wider reform of business rates, with Burnham drawing a distinction between town-centre businesses and major out-of-town developments. For the logistics sector, however, the key question is whether the measure would apply only to the largest warehouse assets or more broadly across distribution and industrial property. Details on the properties affected, the scale of any increase and the proposed implementation date have yet to be confirmed.
The potential rates increase comes after another challenging year for warehouse and logistics operators on energy costs. In our recent Logistics Business Conversations episode with Wattstor, we examined new energy base rates for medium- and high-energy users, which could also affect logistics warehouses and other energy-intensive facilities. Together, the two developments highlight how property and energy costs are becoming increasingly important considerations for warehouse occupiers.
Large distribution centres, automated facilities and temperature-controlled warehouses may be particularly focused on the outcome, given their significant property footprints and energy requirements. Any changes could influence operating costs, investment decisions and the economics of new logistics developments.
Warehouses remain central to retail, manufacturing, food distribution, healthcare supply chains and e-commerce. The sector will now be watching for clarity on whether proposed business-rates changes will be limited to the largest assets or extend more widely across logistics and industrial property.
