“Dead duck” of business rates sees off pink flamingos at Kensington Roof Gardens

By James Buckley - Friday, January 05, 2018 9:57

Crippling rates bills helped pull the plug on Kensington Roof Gardens, one of London’s most glamorous party venues, according to Colliers International, the commercial real estate agency and consultancy, and could very well affect other top night spots in the capital too.

KRG, which hit the news this week when it announced it was closing its doors and making its 85 club and restaurant staff redundant, after 35 years of trading, had been hit by a 47% rise in its Rateable Value following the 2017 Rating Revaluation, making its total business operating costs totally untenable.

The club has seen a rise in Rateable Value from £402,500 in the 2010 list to £590,000 in 2017. In terms of actual rates paid this meant its rates bill would have been over £86,000 higher at £294,410 in 2017/2018 as opposed to £208,092.50 in 2016/17, a rise of over 41%. And these figures were on their way up further, given the Government’s 5 years transition scheme. By 2021/22 Kensington Roof Gardens would have been paying a crippling rates bill of £328,630 a year.  

2016/17 Rates Liability

2017/18 Rates Liability

2018/19 Rates Liability

2019/20 Rates Liability

2020/21 Rates Liability

2021/22 Rates Liability

£208,092.5

£294,410.00

£302,670.00

£310,930.00

£319,780.00

£328,630.00

“The dead duck of business rates is seeing off the pink flamingos at Kensington Roof Gardens, like so many other venues in the nightlife sector,” said John Webber Head of Business Rating at Colliers International, “creating an increasing drain on their operators.”

“Such businesses have been impacted by the rises in rents, by the rise in the NLW and rising prices linked to inflation and are feeling increasingly vulnerable as they struggle to gets costs under control.”

“There has been a lot of comment about how pubs and bars across the country are closing because of onerous business rate rises, but it’s interesting that the high-end London leisure scene is being affected too.”

Colliers assessed the business rates of other top London night spots and found clubs are needing to deal with some massive rises, particularly in NW1 and W1. For example:  KOKO in Camden High Street is saw a 236% rise in its rateable value in the 2017 listing, UnderSolo in Inverness Street NW1 a 151% rise and Dirty Bones Soho a 143% rise. Big names such as Café De Paris and Cirque Le Soir are seeing 60% and 50 % rises respectively. (See Appendix below).

In terms of actual rates paid this means KOKO for example will see its rates bill rise from £75,482 a year 2016/2017 to £272,930 a year by 2021/22, an over 260% increase!

“That’s a lot of dancing to cover.” says Webber. “That’s not to say these clubs won’t survive -but it does show what pressure the industry is in at the moment. The Government really must reform the business rates system further to make it fairer for businesses hit by such rises. Merely linking rate rises to CPI as opposed to RPI inflation figures is simply not doing enough. “

Colliers is still campaigning for genuine business rates reform including the need to offer more funding to the Valuation Office Agency (VOA) so it can deal with the estimated 200,000 outstanding business rates appeals in the system.

jbuckley@costar.co.uk

Get in Touch
+44 203 205 4600