Wholesale warehouses
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
1.1 This Rating Manual section deals with wholesale warehouses, also known as a “cash and carrys”.
1.2 This is a relatively small but diverse category of property that can be classified into two distinct groupings. The ‘Local Set’ comprising the small local/specialist wholesaler offering a limited range of products and the ‘National Set’ comprising the national operators commonly offering a full range of goods including food, electrical, clothing, sports equipment, automotive products, tobacco, alcohol, toys, DIY, garden and home furnishings. Users generally occupy traditional industrial type buildings in industrial locations and are rarely distinguishable from neighboring property other than by use.
1.3 The bulk class of this category of property should be W.
1.4 The term ‘national set’ will apply to those hereditaments that stand out from the norm for the locality. This may be by reason of size, amount of car parking, etc. There may be occasions where these national operators occupy hereditaments which are common to the locality and should be treated in accordance with the ‘Local Set’ approach.
1.5 The following characteristics are typical of a wholesale warehouse:
- sui generis planning consent for wholesale cash and carry warehouse use
- membership is required, restricted to trade only or selected employment groups (membership fee optional)
- excludes the general public
- open 7 days a week with early shopping hours
- large car park
This Rating Manual entry does not apply to the ‘warehouse clubs’ which are in essence large retail supermarkets for members only and can generally be found on retail warehouse sites.
2.1 Special category code: 301, suffix: G
2.2 Primary description and code should be standardised as:
Code: CW
Description (overtype): wholesale warehouse and premises (as per VSA standards document)
3.1 This class should be dealt with by caseworkers in Regional Valuation Units and National Valuation Unit Inner London who are responsible for the correct survey and valuation of the class. On occasions, due to size or co-location with large distribution warehouses dealt with by the National Valuation Unit, it may be appropriate for them to be dealt with by that Unit.
3.2 The class co-ordination team is available should advice be required.
4.1 The class co-ordination team has overall responsibility for the co-ordination of this class. The team is responsible for approach, accuracy and consistency of valuations and will check valuations to ensure they accord with the recommended valuation methodology The team will deliver practice notes prescribing the valuation basis for Revaluation and provide advice as necessary during the life of the rating lists.
Caseworkers and referencers have a responsibility:
- to follow the advice given at all times
- not to depart from the guidance given on appeals and CCA (Check Challenge Appeal) or maintenance work without approval from the co-ordination team
- to seek advice from the co-ordination team if there are any doubts or queries when starting new work
5.1 There are no particular legal issues relating to this class of property.
5.2 Planning permission usually contains conditions as described in 1.5 above.
(see Appendix 1 also)
6.1 Method of survey should be GIA in a accordance with VOA code of measuring practice.
6.2 Plant and machinery. In accordance with SI 2000 No 540 (The Valuation for Rating (Plant and Machinery) (England) Regulations 2000) Items may include: security cameras, lifts, travellators, sprinklers, air conditioning, and standby generators/compressors.
6.3 A national sub location code ‘WSWH’ should be used for the ‘National Set’ to improve co-ordination.
6.4 Accommodation use codes should be applied in accordance with the VSA Standards Guidance for Industrial premises.
6.5 Dedicated staff parking should be captured as “car parking” in RSA.
6.6 Industrial valuation schemes will typically state “car parking reflected” with the result that £0 rateable value is applied to “car parking”. This approach is not appropriate for customer car parking. This should be captured as an ‘Other Addition’ using the codes LFH, LFG, LFU, LOH, LOG or LOU as appropriate and following the local scheme for the treatment of ancillary storage land. If customer parking has been recorded as a number of car spaces, use the local car parking density (usually between 20m2 and 25m2 per space) to convert to an area (m2).
6.7 Any features or differences in quality or location which distinguish the wholesale warehouse from general local warehousing should be noted.
7.1 Surveys should be recorded in EDRM.
7.2 Survey details for valuation will be data captured in RSA.
8.1 ‘National Set’ wholesale warehouses should have their own valuation scheme rather than be included in general industrial schemes. ‘Local Set’ wholesale warehouses should continue to be valued in accordance with local valuation schemes.
8.2 Wholesale Warehouses should be valued using the national analysis and valuation scales listed in the practice note for each rating list.
8.3 The National Set should be included in the National Set address matrix for each rating list.
8.4 Regard should be had to both the local levels of industrial values and also to the overall cross Unit picture when adopting the headline price. Any increased prominence or accessibility compared to the local general industrials should be reflected in the valuation.
8.5 For the “National Set”, the case of Makro v Brennan [1996] LT RA 341 contains useful guidance.
8.6 In this case, the Lands Tribunal determined that the property should be valued on the following basis:
- the building should be valued in comparison with warehousing in the locality
- an addition should be made to reflect superior finishes compared to ordinary warehousing
- the customer car parking should be separately valued
8.7 Quotes from the decision which are relevant:
| Reference Quote | |
| P399 1st para | “The main issue in these appeals is whether the appeal hereditament should be valued by reference to the general level of warehouse values in Leeds…”[The LT approved this approach] |
| P403 2nd para | “The only physical characteristics which differentiate the appeal hereditament from a wholesale or distribution warehouse are certain superior finishes and the large car parking provision; these would be of little or no value to a tenant wishing to use the premises as a wholesale or distribution warehouse; the same may also be true of other cash and carry warehouse operators, whose operations, on the evidence, appear to require a lower level of car parking provision…” |
| P406 3rd para | “As to the value of car parking I agree with counsel for the ratepayers that it is preferable to value it separately…” |
| P407 | The valuation is displayed and it is clear that 789 car parking spaces have been valued at £35 per space. (1990 Rating List). |
Customer car parking – valuation consideration
8.8 Data capture should be as per 6.6 above.
8.9 In most circumstances, the local valuation scheme for the treatment of ancillary land with industrials should be followed.
8.10 Where it can be demonstrated by evidence that the customer car park provision is excessive for valuation date requirements consideration can be given to make an allowance in respect of the excess land.
8.11 Even if excess provision can be proved as per 8.10, no allowance should be made if it is evident that nearby “ordinary” warehouses have areas of land in valuation which are similar to that occupied at the wholesale warehouse.
- Rating Support Application (RSA)
- Survaid
- Class coordination team
- National Valuation Unit
1. Market appraisal
1.1 There is rental evidence for this property class. However, care must be taken to identify and discount those rents where reviews are based on fixed increases. some based on a set percentage increase at review, others having a rent at each review agreed at the start of the lease.
1.2 Merger activity in the last couple of years has been a factor driving a degree of consolidation within the sector.
1.3 Media comment indicates a recent change in the role of cash and carry operations, with research indicating that the percentage of trips to cash and carry outlets for the “main shopping mission” has declined due to increasing ‘delivered wholesale’ (i.e. wholesalers delivering to the customer), and that the majority of trips to cash and carry are now for “top up” reasons.
1.4 It is reported that grocery wholesaling continues to face “wholesale bypass” – that is where large retailers buy directly from manufacturers rather than through wholesalers. Other trends have benefitted the sector, such as rising health consciousness increasing demand for healthier products; and also increased demand for prepared meals due to busy lifestyles.
1.5 Online and digital services are a growing factor, with both “click and collect” and delivery of online orders being offered by some operators. ‘Delivered wholesale’ does have costs attached such as vehicles, drivers and credit.
2. Changes from the last practice note
2.1 Market appraisal of the sector.
2.2 Specific instructions as to analysis/valuation scales and address matrix to adopt have been included.
3. Ratepayer discussions
3.1 No discussions have been held with any ratepayer representatives or trade bodies. Values will be based on local and Unit-wide rental evidence.
4. Valuation scheme
4.1 Analysis and valuation scales should be R2023 A1FGIA1 and V1FGIA1 respectively.
4.2 National set matrix A1WWSWH1 should be used for valuation.
| Data capture and referencing guide: wholesale warehouses | |
| Background | Units should consider whether they have in place up-to-date rental information and accurate surveys to enable reliable analysis and valuation. |
| General |
These guidelines are for properties comprising the “National Set”. Any differential in respect to normal warehousing should be noted in respect of quality/finish/fit, etc. It is essential that the customer car parking is captured as “other addition” rather than as “car parking” and captured using the codes LFH, LFG, LFU, LOH, LOG or LOU as appropriate. The local approach to additional land with warehousing should then be adopted. Location should be noted to compare with general industrials in terms of whether situated in more prominent/accessible position. |
| Bulk class | W |
| Survey method | The survey method to be input on RSA is GIA. |
| Sub-location | The National Set should be sub-located as WSWH. |