The UK commercial property sector, a crucial component of the nation’s economy, has experienced notable shifts in recent years. As we move into the latter part of 2023 and into 2024, its important to consider some of the key factors that are impacting these
Our team have provided a comprehensive analysis of this ever-changing landscape, emphasising the importance of specialised tax strategies in today’s market, especially for commercial property owners.
Decline in Key Players’ Share Values
A significant trend in the sector is the decline in share values of major companies. British Land, for example, saw its shares plummet from 870p in 2015 to about 340p, while Land Securities’ shares dropped from over £14 to approximately £6.
This downward trajectory is more than just numbers; it reflects deeper market challenges, including rising interest rates and changes in work patterns, especially in office spaces.
We’ve also seen urban dynamics change, with a noticeable shift in how commercial properties are used (and valued). This shift is drawing investment away from traditional office-centric developments, impacting the valuation of properties focused solely on office spaces.
Capital Allowance Claims
In this fluctuating market, the role of Capital Allowances claims has gains prominence.
For HMA Tax, identifying and claiming allowances on embedded items in commercial properties is key. This not only enhances tax efficiency but also offers a counterbalance to the financial impacts of the market downturn.
Sector-Wide Value Decreases
The portfolios of British Land and Land Securities, including London offices, warehouses, and shopping centres, have seen value decreases of 2.5% and 3.6%, respectively.
When property investors are seeing decreased return on investment,
figures highlight the potential benefits of Capital Allowance claims, where HMA Tax can provide significant support and unlock substantial tax savings for property owners.
Opportunities Amidst Challenges
Despite these challenges, the investment landscape presents opportunities for recovery and growth. Firms like HMA Tax play a crucial role in this, enhancing the appeal of investments through improved tax efficiency via capital allowance claims.
The Need for Specialised Tax Services
The UK commercial property market, exemplified by companies like British Land and Land Securities, underscores the necessity for specialised tax services offered by firms like HMA Tax.
Focusing on Capital Allowances claims, property owners can mitigate the impacts of market downturns while enhancing the tax effectiveness of their investments.
James Telling
Head of Developments & Acquisitions
If you own a commercial property and would like to find out more about how your business could improve its tax situation, please call James on 01384 904090 or email james@hma.tax for more information.
