TOWN Centre Securities is warning that the Government’s new Community Infrastructive Levy could “kill off” new property developments.
The Leeds-based listed developer and investor, led by Edward Ziff, described the levy as “another impediment to a very fragile recovery” in the commercial property market.
Mr Ziff, who was at last week’s Mipim international real estate fair in the South of France, said market sentiment is improving, but the levy will pose difficulties, particularly in the provinces as the UK tries to rebalance its economy away from the South East.
Leeds and Sheffield are among the local authorities that plan to introduce the charge next year for developers to help pay for new infrastructure.
Richard Lewis, development director at Town Centre Securities, said the levy could “kill any development off”.
Mr Ziff is concerned about the impact this will have on the UK’s “two-speed economy”.
Describing the national market, he said: “Everybody knows expects London to be the power that it is, but then the rest of us are all fighting over what’s left and it’s tough.
“The underlying dynamics of the economy in this part of the world is tough. The further you go away from London the colder it gets, literally. So when you get up to Scotland - and we own quite a lot of property in Scotland - it is double tough.
“It will be a good while before any feeling of emotional or psychological change that we are feeling in London spreads out not only as Leeds but also heads its way up and covers the whole of the UK. There’s a lot of catching up to do.”
Town Centre Securities, founded by Mr Ziff’s late father Arnold in 1959, counted properties worth £287m at the end of 2012. Its portfolio is concentrated in Leeds, Manchester, Edinburgh and Glasgow.
Mr Ziff said: “Our sense of what’s going on in the property market is that things is not getting worse. We are seeing more interest.
“But that isn’t showing itself yet in terms of deals done. I can’t happily say I get my morning post and a deal comes across my desk and I want to rush out and do it in this part of the world.”