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It is now more than a year since changes were made to the Empty Property Rate that resulted in the rates for empty warehouses becoming the same as those of occupied buildings. The new scheme which was introduced in 2008 on the 1st of April caused a lot of concerns to UKWA. This is because it implied that the new rule would have a huge impact on third-party and logistic storage industries.

Roger Williams, CEO of UKWA said that the decision of the Government to charge empty industrial property with scrap rate relief has led to many landlords demolishing sound warehouse property. This is because they obviously do not want to pay the significant amounts of tax that have been levied on unoccupied facilities.

In addition to this, the cost of EPR has proved to greatly restrict speculative warehouse construction. He added that by discouraging development of new warehouses and encouraging early demolishing of useful ones due to imposition of EPR will result in a shortage of warehouse space when the recession ends. This will result in the significant rise in rents, causing inflation again.

Combating the shortage of storage problem will be possible only in those warehouses that implement racking systems. Besides racking systems, there are also other storage systems that will help solve the problem. Regardless of this, there will still be the need to develop more warehouses to replace the ones that have been demolished.