Links (catchup) for 2023-11-24

[andrewducker]

1. Owners of empty Edinburgh shops to be hit with tax hike under new rules

(tags:edinburgh tax shops )

2. Edinburgh Council are running a survey on the proposed tourist tax

(tags:edinburgh tax tourism survey )

3. Bill & Ted's Napoleon on the freedom of playing the tiny emperor

(tags:movies acting viaJohnBobShaun )

Comments

[bens_dad]

Will running a business in these properties actually generate enough trade to pay the "rates" ?

I've heard that Sheffield (IIRC) has properties that are theoretically "to let" but potential business owners either cannot find the letting agent, or keep being refused a realistic lease. Is the same true in (parts of) Edinburgh ?

[andrewducker]

If not then they'll be redeveloped as hotels. So long as*something* is happening with them.

[hairyears]

Most commercial property developments are financed with bonds and loans which specify an upward-only rent review.

Taken in isolation, this sounds like a losing bet for a shop leased in a booming economy, because the rent will be unaffordable in a slump (and, eventually, even in a normal economy) and the premises will be left empty.

In a broader view, this is a smart business practice: a 'Ricardian' rent across the entire business sector that ensures an artificial shortage of available property even in a recession, thus keeping rents high and rising until the entire commercial property sector crashes and the bondholders are stiffed with the losses.

Bad news for pension funds!

But the property developers walk away from the bond defaults and bankruptcies, and start all over again, knowing that the same upward-only rent reviews will keep on grinding away at everyone else's business profits for yet another commercial property boom-and-bust cycle.

[channelpenguin]

It's a fair old bind for pension funds, who have seen their investment possibilities restricted by legislation to the "less risky" (at least as I recall happening when I worked in the IT for a big pension firm 20 years ago). I bet this boom-bust-bankrupt risk isn't priced in (or it's too hard to calculate). I think I'm for pension funds being allowed to invest more diversely. Of course the risks in that come if/when we finally have to admit that capitalism premised on eternal growth doesn't work...

[danieldwilliam]

Rent reviews, as I understand the term of an existing lease, are thing that happen during a lease. I don't think they would affect the initial rent for a new lease.