Offices will shoulder the largest burden in making up the £2.17bn business rates shortfall created by Labour’s discounted multiplier for retail, hospitality and leisure (RHL), according to research from Cushman & Wakefield.

Some 20,000 properties in other sectors with a rateable value of £500,000 or above will be impacted by the RHL multiplier, set to take effect in April 2026, according to C&W.

Offices (accounting for 5,383 properties) will pay an additional combined £537.8m in annual liabilities due to the new multiplier.

The industrial sector, with 3,800 properties, will pay a combined extra £267m, while a further 2,000 logistics properties will pay an extra £260m.

Additional liability by sector. Credit: Cushman & Wakefield

Prime London offices with rateable values over £500,000 will be hit with increases of up to 53.5% in Kensington and 45.71% in Mayfair, St James’s, and the West End.

Outside London, the impact for lower- value office properties is relatively modest, offset by a lower standard multiplier.

The highest regional office increase will be 10.77% for properties in Reading while the lowest increase will be 2.48% for offices in Leeds.

According to Cushman & Wakefield’s calculations, total rateable values will also increase significantly across the UK due to the 2026 re-evaluation, with aggregate rateable values in England set to rise on average by 11.4% to £79.9bn.

The industrial and logistics sector will be hit with by far the largest increase in rateable value, at 28.64%, as well as liability. Those with a rateable value of over £500,000 will suffer a double hit of rising rateable values and the higher multiplier, the report warns.

Conversely, much of the retail sector will see a double benefit from the combination of lower average Zone A rental values and the discounted RHL, leading to significant liability falls in 2026-27.

This even applies to central London, where the smallest projected falls in liability, of 27.72% in Oxford St West and 27.82% in Regent Street, will still be significant, C&W said.

C&W head of rating UK Mike Flecknoe said: “Our analysis shows that while some occupiers will benefit from reductions, others – particularly in prime office and logistics locations – should prepare for substantial increases.”

“Where high streets are struggling, lower rates, while welcome, cannot in isolation revive them. For many retailers, business rates are just one part of a broader set of challenges that includes shifting consumer behaviour, other taxation, online competition and the need for urban regeneration.”