Tyre and exhaust centres; vehicle repair workshops and garages
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
1.1 This guidance applies to all tyre and exhaust centres.
Bulk Class: F
Primary Description: CG1 (overwrite to tyre and exhaust centre and premises)
Scat Code: 095 suffix letter G
3.1 This is a business unit class.
3.2 It is also recommended that each Unit should allocate a named co-ordinator (member of the Class Co-ordination team), to act as a point of contact within the Unit. This Lead Valuer will assisting in the delivery of the Unit’s valuation scheme and also for liaising on value and technical issues with other Lead Valuers across adjoining Units.
The tyre and exhaust Class Co-ordination Team (CCT) has overall responsibility for the co-ordination of this class. The team are responsible for the approach to and the accuracy and consistency of properties within this class.
Caseworkers have a responsibility to:
- follow the advice contained within the Rating Manual and relevant Practice Note
- seek advice from the co-ordination team before starting on any new work
- not to depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team
There is no specific legal framework for this class.
Tyre and Exhaust Centres should be measured and valued to Gross Internal Area (GIA) having regard to the definitions contained in the VOA Code of Measuring Practice for Rating Purposes.
7.1 Five fundamental types of hereditament have been identified:-
Type A
Similar to a retail warehouse and often located amongst similar buildings on a retail park or development. Frequently involve a significant element of retail space selling general motor or allied trade accessories. Within this type might be operators such as Charlie Brown’s and Halfords who may also be found off retail parks in former showrooms with a large element of retail sales. Because these units are suitable for a wider range of potential occupiers the specification is likely to reflect those competing uses. The start point for survey and valuation should be that adopted for retail warehouses where values may be higher than for Type B.
Type B
Purpose built modern (post late 1980s). This type is considered most likely to meet the ideal characteristics, specifications and location requirements. Valuation will be driven by rental evidence and the location.
Survey requirements are to Gross Internal Area (GIA). Land required used for customer and staff parking and delivery bay will be reflected in the main space value but land in excess of what would reasonably be expected should normally be valued at the appropriate prevailing rate.
Type C
Older purpose built or converted from retail or industrial building. The better and more valuable hereditaments of this type will enjoy many of the benefits of Type B. This is especially the case with location since Type C hereditaments are frequently situated on main arterial and similar busy roads. Those considerations, together with the level and suitability of the adaptation works, will determine the appropriate level of value.
Type C hereditaments encompass a wide range of premises and consequently will have a value range from the Type B level to Type D (see below). It is therefore necessary when dealing with Type C hereditaments for the valuer to exercise judgement most subjectively. Local knowledge and site appraisal will play a major role in determining the relative position within this wide band of values. It is expected that the rental evidence and survey details will be examined critically. In arriving at rateable value appropriate adjustments to passing rents so as to properly reflect tenants improvements and the effects of any conversion from a former use will be necessary where these are not reflected in the rent.
Survey requirements are the same as for Type B hereditaments. Again, extra land should be valued at the appropriate prevailing rate.
It is not uncommon for such units to be in former showroom accommodation and rental evidence for that class may also prove to be a useful cross reference.
Type D
Hereditaments located on industrial estates. Value will be determined by the prevailing industrial values within the locality. Survey requirements should follow those for industrial hereditaments.
In some circumstances value will derive from that appropriate to Type C hereditaments where locational aspects or adaptation effectively mean that a Type C categorisation is more appropriate. For example, if a unit fronts a good road and there is access from it and good visibility limitation of value to that of an industrial estate will result in an undervalue of the hereditament.
Type E
Back street type garage/workshop. Often located in tertiary positions among other mixed age hereditaments or adapted from other uses that use are no longer competitive. Value will be determined by prevailing industrial values within the locality. Survey requirements should follow those for industrial hereditaments.
Type S
Centres located within supermarket car parks. Normally internet driven “time slot” facilities, with minimal on site storage.
7.2 Method of Measurement
For the 2017 rating list all properties are to be measured to GIA.
7.3 SCAT coding
All properties used as exhaust and tyre centres are to be identified and SCAT coded 095. At present these properties are not consistently identified by SCAT code – many are identified by SCAT code 289 [Vehicle repair workshop], or by SCAT code 096 [factory, workshops and warehouses], and even as shops.
7.4 BCI coding
BCI to be F
There are instances where these properties are recorded as BCI = S(hop). This is not appropriate, but see paragraph 8.9.below.
7.5 BUT coding
All tyre and exhaust centres are to be Building Use Type coded TEC.
BUT code TEC exists to identify tyre and exhaust centres and should be used.
At present these properties are not consistently identified by BUT code.
7.6 Primary description code
The primary description code is CG1, but this defaults to ‘Vehicle Repair Workshop and Premises’. The CCT recommends that the default description is over-written to give ‘Tyre and Exhaust Centre and Premises’.
7.7 Sub Location Codes
At present a variety of sublocation codes are in use, but to achieve national conformity it is recommended that the following codes be adopted. The codes derive from the beacon properties identified above within para 7.1
| Beacon | Code | Comment | Remarks | |
| A | TECA or the local retail warehouse sublocation code | Retail warehouse park | Since value is determined by the prevailing retail warehouse tone it is anticipated that these properties may be sublocated as retail warehouses | |
| B | TECB | Purpose built post 1989 | Since these are purpose built properties it is anticipated that they will have the best locations. | |
| C | TECC | Purpose built pre 1990 and conversions | This will encompass a wide range of building types / ages with value dependent on position | |
| D | The local industrial sublocation code. *See remarks | Properties on industrial estates. | Since value is determined by prevailing industrial values, it is anticipated that these properties will have a unit price £/m2 in line with the equivalent size / age units on the industrial estate. These properties should be coded with the sublocation of the industrial estate / industrial location.* | |
| E | The local industrial sublocation code. *See remarks | Backstreet garage / workshop | Since value is determined by prevailing industrial values, it is anticipated that these properties will have a unit price £/m2 in line with the equivalent size / age units in the industrial locality. These properties should be coded with the sublocation of the industrial locality. * | |
| S | TECS | Purpose built at superstores/supermarkets | * these properties will be SCAT coded 095 and a search for properties in use as tyre and exhaust centres using the SCAT code will enable them to be identified. Located at superstores/supermarkets. |
7.8 Accommodation Use Codes
The existing accommodation use codes are appropriate for tyre and exhaust centres.
The following relativities are given in order to provide a consistent approach to devaluation and valuation. As in all cases, each hereditament should be looked at on its own merits. Advantages and disadvantages should be weighted as they would be within the context of local industrial hereditaments and if appropriate, relativity varied accordingly.
| Accommodation Use Code | Description | Comment |
| WKS = factor 1.0 | Workshop or Exhaust Bay or Tyre Bay | 100 % |
| REC = factor 1.2 OFF = factor 1.2 ANO = factor 1.1 WCE = factor 1.2 | Reception and waiting areas - including public lavatories. | Up to 120% of main space value depending on quality and access. If public WCs are off the Reception then code as REC and overwrite as Customer Toilets. |
| OWK = factor 1.0 | Works Office | 100%. Where office accommodation is no better than workshop quality. |
| MSR = factor 1.1 LOK = factor 1.1 | Workshop mess rooms, locker rooms etc. | |
| ASI = factor 1.0 | Storage areas lacking some of the characteristics of the main building. Typically found to the rear of the workshop, isolated in nature and lacking natural light and/or headroom. | 100%. Vary according to disadvantages and quality (if any). |
| AUS = factor 0.7 | Area under supported first floors (mezzanine) | Record in accordance with RAT IA 070307. |
| ASI = factor 0.5 | Supported first floors (mezzanine) as a tenant fit | Record in accordance with RAT IA 070307. |
| ASI = factor 0.65 (unlifted) | First floors constructed as part of the original building. | Valued at the normal Industrial relativity dependant on quality, use, location, access, usable height etc |
| BAY = NOT TO BE USED | NOT TO BE USED | While workshop areas are referred to as bays .e.g. tyre bay, these areas are within the building and should be treated as full value areas as set out in this table. |
While workshop areas are referred to as bays .e.g. tyre bay, these areas are within the building and should be treated as full value areas as set out in this table.
7.9 Ancillary land and parking
Types A, B and C reflect operational need for land and this amount to should be reflected, with any additional land added at the prevailing local basis having regard to its position.
Types D and E follow industrial or prevailing local basis for both typical operational requirement for land and any additional land.
It is recognised that local custom and practice has dictated whether or not land and parking are recorded as separate items for valuation, or treated as items reflected in the unit price adopted on the main building.
This guidance is not prescriptive about this recognising that provided devaluation (of rent) and subsequent valuation are consistent a defendable assessment is the result. However, details of parking and land must be noted for the survey record.
7.10 It is recognised that the market tends to value exhaust and tyre centres on an overall basis. However, the VOA is faced with the problem of making direct comparison between properties when challenged, e.g. that one property lacks a feature that another property has. Using the RSA accommodation use codes makes the thinking behind valuations explicit and can remove the problem of an overall valuation being reduced because of an alleged problem.
Further, where properties are rented, in many cases it is a basic property which is rented and features such as a reception area are tenant’s improvements. Hence the market may be right in saying it values overall, but it is not valuing the property Rebus.
7.11 Survey Units
In some areas of the country these properties are to be found on or immediately behind shopping streets. In the past these have been recorded as shops and “tweaking” of the survey accommodation use codes has taken place to arrive at the desired level of value. E.g. The part of the property fronting the street has been zoned while the workshop at the rear has been captured as a factor of the shop value.
This is not desirable, and no longer necessary with the ability of RSA to support survey units with different BCIs.
The adoption of two survey units is recommended in these circumstances.
If it is considered necessary for part of the hereditament to pick up a level of value derived from adjacent shops then the workshop part should be captured as survey unit one with BCI = F (picking up value and scheme description from the tyre and exhaust matrix), while the “retail” area can be captured as a second survey unit with BCI = S(shop) and pick up an appropriate level of value from its valuation matrix. This avoids the need to value the workshop as a factor of the local shop value.
7.12 Plant and Machinery
Details of rateable plant and machinery are to be recorded
At present this is not consistently carried out. With the publication of summary valuations on the internet there is a need to demonstrate to ratepayers that they have each been treated in the same fashion.
Most units will contain air compressors and pipework to distribute the air to power pneumatic tools. These are rateable under Class 1 Table 1(i) - power. An air receiver may also be found nearby and this should also be identified - rateable under Class 1 List of Accessories - 2(ii) storage cylinders and vessels.
CCTV security equipment, rateable under Class 2 Table 2 (f) PROTECTION FROM HAZARDS, includes “ security and alarm systems “. Class 2 states an item under this heading must be “used or intended to be used in connection with services to the hereditament or part of it “. A “security system” is not defined in the Regulations but it is generally accepted that the use of 4 or more cameras on one hereditament for Class 2 purposes constitutes a “ security system
It is unlikely that any further plant and machinery, other than normal heating and electrical installation, will be identified but caseworkers should look for any steelwork, supports, gantries etc which may be present and may be rateable under List of Accessories 2(i).
In the absence of any actual evidence of costs of the particular P&M at the hereditament a nominal fixed sum (see appropriate Practice Note for details) is to be added to the rateable value to reflect rateable P&M in the hereditament. This figure has been arrived at from a consideration of costings of air compressors, air receivers and pipe work.
Where actual rateable P&M is significantly different, variation from this sum is appropriate.
8.1 Previous lists adopted a variety of valuation approaches and most commonly related the valuation to the prevailing industrial use tones in the location. Where specific schemes or scales were adopted it was generally found that there was sufficient rental evidence to support the stance that this class can be separately identified and valued accordingly.
One summary in use by the trade is VAPs and BAPs.
V(isibility)
Is the site easily visible from the road ?
A(ccess)
The property may be visible, but can the driver get to it ?
P(arking)
Does the site have adequate parking ? Current industry ratios are approx 1 car space to 500ft2 / 46m2 of building.
B(ays)
Layout. Preferably a building running along the road with an arrangement of exhaust bay / reception / tyre bays, and storage at the rear or around the back of the building.
A(daptability)
Can the existing building be adapted ? A fragmented layout is little use.
P(rominence)
The property may be visible from the road, but is it a prominent ( busy ) main road ?
8.2 The most important factor is always location. These centres offer distress goods and it is the industry’s view that people will be unwilling to travel a long way for something they would rather not have to buy at all. The desired catchment offers a population of 40,000 within half an hours drive time. Ideally, drive times should never exceed 15 minutes and in major urban centres even less. It is however admitted that in remote rural locations up to a one hour drive time may be necessary. Other ideal characteristics are; clear visibility, which is always of prime importance, access and sufficient car parking. Fast flowing traffic or lane restrictions and barriers are a disadvantage; whereas a busy open commuter route subject to speed limits but without too many traffic lights or other restrictions to impede the ability to turn in safely are preferred. Access for bulk delivery is also useful.
8.3 Generally, property specification is fairly flexible. Main requirements for a good modern unit are typically; a site area of third of an acre (1350m2) with clear trading space of 350-500m2, eaves height 4.5 metres and external parking for 6-12 car spaces. However, these requirements may be compromised in order to secure a site that is very well located and hence likely to generate high turnover. There may also be strong local factors which overcome what may appear to be an impaired trading position. For example Kwik Fit trade very successfully from an underground site in Chelsea where the catchment is high, competition is thin and sites are very hard to find.
8.4 The appropriate level of value, survey requirement and the treatment of land will depend upon the type and style of property.
8.5 Valuation relativities
The following relativities are given in order to provide a consistent approach to devaluation and valuation. As in all cases, each hereditament should be looked at on it’s own merits. Advantages and disadvantages should be weighed as they would be within the context of local industrial hereditaments and if appropriate, relativity varied accordingly.
| Exhaust and tyre bay. | 100%. |
| Reception and waiting areas - including public lavatories. | Up to 120% of main space value depending on quality and access. |
| Storage areas lacking some of the characteristics of the main building. Typically found to the rear of the workshop, isolated in nature and lacking natural light and/or headroom. | Vary according to disadvantages and quality. |
| Workshop messrooms etc. | As for Reception. |
| Supported first floors (mezzanine) as a tenant fit. | Value at 50% of main space price with the area below at 70% of main space price to reflect loss of height. |
| First floors constructed as part of the original building. | Valued at the normal industrial relativity dependant on quality, use, location, access, useable height etc. |
| Land. | Types A, B and C reflect operational need for land and this amount to be reflected. Additional land added at the prevailing local basis having regard to its position. Types D and E follow industrial or prevailing local basis for both typical operational requirement for land and any additional land. |
8.6 Plant and Machinery
All rateable P&M should be valued in accordance with the list appropriate VO cost guide.
In the absence of any actual evidence of costs of the particular P&M at the hereditament a nominal fixed sum ( Practice Note for details) should be added to the rateable value to reflect rateable P&M in the hereditament. This figure has been arrived at from a consideration of costings of air compressors, air receivers and pipework. Where actual rateable P&M is significantly different variation from this sum is appropriate.
In the first instance further guidance should be sought from the Unit’s designated Class Co-ordination Team member.
1. Market appraisal
1.1 Vehicles are becoming ever more reliable. The overall number of tyre and exhaust centre branches controlled by the top 20 retail chains continues to grow.
1.2 Although a growth area, the penetration of internet traders remains small - here customers book and pay for their tyres online, before having them fitted at one of the network of independent garages or franchised fitting centres. However, all the major operators have an online platform and is seen as a growing source of revenue, reflecting changing consumer habits and the way they source their replacement tyres. The on-line part of the business, complements the traditional bricks and mortar operator sites, allowing customers to order on-line and then arrange an appointment to have the tyres fitted at one of the operator’s local sites.
1.3 This on-line growth and associated customer habits, apply not only to tyres, but also to MOTs and other servicing needs.
1.4 Alongside e-shops, use has been made of pay-per-click and social media advertising, which has led to a significant increase in driving consumers to their relevant e-shop.
1.5 The evidence to date shows that tyre and exhaust centres, MOT centres and vehicle repair operators, continue to pay higher rents compared to general industrial or warehousing. That differential is more marked for prominent sites, in highly visible locations with good access and favourable catchments.
1.6 The impact of the Covid pandemic on the automotive industry was marked by considerable variation between sectors – in the tyre and exhaust centre, MOT garage and vehicle repair sector, media comment around the Antecedent Valuation Date focused on the fact that a large number of vehicles benefitting from pandemic-driven MOT extensions are now overdue for re-test; and that the easing of restrictions has seen traffic rapidly returning to pre-pandemic levels.
2. Changes from the last practice note
Data capture/valuation
2.1 Beacons should be refined as follows. Previously adopted sublocations of TECD (properties on industrial estates) and TECE (back street type garages/workshops), should be merged into category D, with those sublocations being replaced by the local vehicle repair workshop or industrial sublocation. At present, both are identified with Building Use Type (BUT) code TEC and Special Category (SCAT) code 095. These should remain unchanged and continue to be valued on the prevailing local industrial tone. Their separate identification needs to continue, so that an overview is maintained of the number of sites nationally. This will also allow future consideration of the categorisation for these sites, should the need arise.
2.2 This practice note now extends to MOT garages, vehicle repair workshops and main road garages. Where sites have physical advantages, such as enhanced visibility or structural adaptations, the rental value will increase above local industrial levels. Those that are purpose-built properties and constructed after the late 1980s, are most likely to meet the ideal specification and location requirements. These properties should be data captured as TECB sublocation. Older or converted/adapted repair workshops in prominent locations, where the prevailing industrial tone of the location would result in valuations below the levels evidenced by rents, should be data captured as TECC.
2.3 The industrial analysis scale A1VFGIA1 and valuation scale V1VFGIA1, should be adopted in analysis and valuation access paths respectively for all tyre and exhaust centres, MOT centres and vehicle repair workshops.
2.4 It is recommended that identified tyre and exhaust centres, MOT centres and vehicle repair workshops within beacons A, B and C, are valued on an address-based matrix, accessed via the sublocation code. This will “ring fence” the properties within a scheme, and enable comparison of values between properties, within the scheme. These matrices generally mirror locations covered by former Groups, care should be taken when valuing sites close to or adjacent boundaries to ensure consistency with properties close by.
2.5 To achieve consistency the following codes should be adopted. These codes are included with the Rating Manual, but for assistance are also set out below -
| Beacon | Sublocation | Comment | Remarks |
|---|---|---|---|
| A | TECA or the local retail warehouse sublocation code | Retail warehouse park | Since value is determined by the prevailing retail warehouse tone it is anticipated that these properties may be sublocated as retail warehouses. |
| B | TECB | Purpose built 1990 onwards | Since these are purpose-built properties it is anticipated that they will have the best locations. |
| C | TECC | Purpose built pre 1990 and conversions | This will encompass a wide range of building types / ages with value dependent on position. |
| D | The local industrial sublocation code. | Properties on industrial estates, non-industrial estate locations, back-streets. | Since value is determined by prevailing industrial values, it is anticipated that these properties will have a unit price £/m2 in line with the equivalent size / age units on the industrial estate. These properties should be coded with the sublocation of the industrial estate / industrial location. |
| S | TECS | Purpose built at superstores/supermarkets | Located at superstores/supermarkets. |
2.6 Plant and machinery
In the absence of any actual evidence of costs of the Plant and Machinery, the practice of adding a default addition for air compressors, air receivers and associated equipment should continue, however, the amount of that uplift has been revised to reflect the increase in costs since the last revaluation. A sum of £330 RV is to be added – this has been arrived at using costs of typical items found, including air compressors, air receivers and pipework.
A breakdown of the figure is as follows:
| Compressor | £ [Cost Guide] |
|---|---|
| Air receiver/ associated pipework | £ [Cost Guide] |
| Total capital cost | £7,556 |
| Decapitalise @ [prescribed rate] | £332 |
| Say RV 330 |
Any additional CCTV equipment should be noted and valued in accordance with the 2023 VO Cost Guide.
Where actual rateable plant and machinery is significantly different from this, variation from this sum is appropriate.
3. Ratepayer discussions
3.1 Meetings have not been held with representatives of occupiers in this class.
4. Valuation scheme
4.1 There is no agreed national scheme for this class.
4.2 Market knowledge reports will be produced for each unit.
1. Market appraisal
1.1 The market is showing strong signs of recovery with most of the main operators seeking to expand or improve their portfolios. Evidence indicates that between 2008 and mid 2013 rents had generally not increased, with most reviews at nil increases. From mid 2013 onwards, the market is showing strong economic growth.
1.2 This is in part attributable to the recent strong performance in the Commercial Vehicle and Truck sectors where increasing “internet shopping” demand is a major factor. The maintenance of the increased amount of commercial vehicles has had a positive impact on Tyre and Exhaust Centres. During the first quarter of 2015 it is reported that 108,456 commercial vehicles were registered which represents the best quarter on record. Sales of new registered domestic vehicles were reported to have increased by 6.7% in January 2015 the strongest (month on month) growth since 2007. Notwithstanding the high number of new vehicle sales, the state of Britain’s roads results in a high rate of vehicle wear & tear, thus increasing demand.
1.3 Much business is now done online with parts ordered and booking made for fitting at a local branch, this transparency has led to an increase of “price comparison” websites. Black Circles are a key player in this sector and are affiliated to a network of over 1200 sites. They are currently developing a network in partnership with Tesco (Tesco Pit Stops).
1.4 Major players within this sector are actively seeking to expand their market presence, by opening new sites. Further investment is evident with wide scale refurbishment of existing branches, this is in part driven by diversification into other services such as MOT centres. It should be noted, the MOT industry is regulated and start-up costs for providing necessary accommodation and equipment is significant, equally some properties are not suitable for adaptation to meet industry requirements.
1.5 Industry consolidation is taking place, the major deal being Itochu (the conglomerate behind Stapleton’s Tyre Service) buying out Kwik Fit in 2011.
1.6 It has been widely publicised within the press that Kwik Fit suffered post-recession losses but improving vehicle sales coupled with continued expansion into the light commercial vehicle sector and general improvement in economy has seen profits on the rise again. Equally the media stated that following a companywide programme of refurbishments and upgrades, ATS Euromaster announced a return to profitability at start of 2015 after a challenging few years in the red and after a five year turnaround plan.
1.7 It is clear that many of the major operators are willing to buy out small independent chains to secure a market presence in a particular location. It should be noted that the demand for properties occupied by Tyre and Exhaust centre’s is not restricted to this class. Rental levels are also influenced by competing users such as tile, bathroom and carpet showrooms in addition to low cost “wine & beer” retailers.
1.8 Rental levels for prominent sites such as found within categories B and C will generally be higher than for general industrial or warehousing within the locality. Evidence shows that operators are willing to pay a premium for enhanced visibility and ease of access.
1.9 As well as a complex market place the picture is further complicated by the large number of operators, with only a few firms able to claim a presence across the country. See below -
| Rank | Business | Sites |
| 1 | Kwik Fit Group Ltd | 600 + |
| 2 | Associated Tyre Services / Euromaster | 340 |
| 3 | Halfords Autocentres | 300 |
| 4 | National Tyres & Autocare | 216 |
| 5 | Hi-Q | 170 |
| 6 | Central Tyres | 100 |
| 7 | STS Tyre and Exhausts [Stapletons Tyre Services] | 100 |
| 8 | Formula One Autocentres | 76 |
| 9 | Wilco and Motosave (Fast Fit Exhausts) | 38 |
| 10 | Mr Clutch Autocentres | 49 |
| 11 | Mr Tyre Ltd | 33 |
| 12 | Merityre Specialists Ltd | 23 |
| 13 | Bathwick Tyres | 31 |
| 14 | Universal Tyre and Autocentres | 14 |
| 15 | Watling Tyres | 16 |
| 15 | Exhaust tyres and Batteries (Worcestershire) Ltd | 21 |
| 17 | Setyres (Southern Tyres Co) | 20 |
| 17 | Malvern Tyres / Malvern Tyres [wholesale] | 55 |
| 19 | Dexel Tyre Company | 12 |
| 20 | Micheldever Tyre Services | 61 |
| 21 | Selecta Tyre | 15 |
As a result operators in this sphere can be found in a wide variety of buildings, and in a wide variety of locations.
2. Changes from the last practice note
Data capture/ valuation
2.1 The existing industrial scales can be adopted for exhaust and tyre centres. These are AVFGIA1 (analysis) and VVFGIA1 (valuation).
2.2 It is recommended that identified tyre and exhaust centres within Beacons A, B and C are valued on an address based matrix accessed via the sublocation code. This will “ring fence” the properties within a scheme and enable / lead to comparison of values between properties within the scheme. These matrices generally mirror locations covered by former Groups, care should be taken when valuing sites close to or adjacent boundaries to ensure consistency with properties close by.
2.3 At present a variety of sublocation codes are in use, but to achieve national conformity the following codes be adopted. These codes are included with the Rating Manual, but for assistance are also set out below -
| Beacon | Code | Comment | Remarks |
| A | TECA or the local retail warehouse sublocation code | Retail warehouse park | Since value is determined by the prevailing retail warehouse tone it is anticipated that these properties may be sublocated as retail warehouses |
| B | TECB | Purpose built post 1989 | Since these are purpose built properties it is anticipated that they will have the best locations. |
| C | TECC | Purpose built pre 1990 and conversions | This will encompass a wide range of building types / ages with value dependent on position |
| D | The local industrial sublocation code. *See remarks | Properties on industrial estates. | Since value is determined by prevailing industrial values, it is anticipated that these properties will have a unit price £/m2 in line with the equivalent size / age units on the industrial estate. These properties should be coded with the sublocation of the industrial estate / industrial location.* |
| E | The local industrial sublocation code. *See remarks | Backstreet garage / workshop | Since value is determined by prevailing industrial values, it is anticipated that these properties will have a unit price £/m2 in line with the equivalent size / age units in the industrial locality. These properties should be coded with the sublocation of the industrial locality. * |
| S | TECS | Purpose built at superstores/supermarkets | * these properties will be SCAT coded 095 and a search for properties in use as tyre and exhaust centres using the SCAT code will enable them to be identified. Located at superstores/supermarkets. |
2.4 Since values of Beacon types D and E are determined by prevailing industrial values, it is anticipated that these properties will have a unit price £/m2 in line with the equivalent size / age units in the industrial locality. Where sites have physical advantages such as enhanced visibility or structural adaptations have been made likely to increase rental value, it may be appropriate to sub locate as Beacon C.
2.5 Plant & Machinery
In the absence of any actual evidence of costs of the particular P&M at the property a sum of £300 RV is to be added to the rateable value to reflect rateable plant. This figure has been arrived at using costs of typical items found within tyre and exhaust centres, including air compressors, air receivers and pipework.
A breakdown of the figure is as follows:
| Compressor | £4,050 |
| Air receiver/ associated pipework | £2,450 |
| Total capital cost | £6,500 |
| Decapitalise @ say 4.5 % | £292 |
| Say RV 300 |
Any additional CCTV equipment should be noted and valued in accordance with the 2017 VO Cost Guide.
Where actual rateable P&M is significantly different variation from this sum is appropriate.
3. Ratepayer discussions
3.1 Meetings have been held with some of the representatives of occupiers in this class, response awaited from the remainder.
4. Valuation scheme
4.1 There is no agreed national scheme for this class.
4.2 Market knowledge reports including key rents for each Unit are filed within (add link).
1.0 Introduction
1.1 Exhaust and tyre centres form a category of property which may attract a higher level of value than properties in typical industrial use. Consequently it is recommended that exhaust and tyre centres should have their own valuation schemes for R2010.
2.0 Identification and Character
2.1 Five fundamental types of hereditament have been identified :-
The appropriate level of value will depend upon the type and style of property.
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Type A: Similar to a retail warehouse and often located amongst similar buildings on a retail park or development. These frequently involve a significant element of retail space selling general motor or allied trade accessories. Within this type might be operators such as Nationwide Autocentre. Since these units are suitable for a wider range of potential occupiers the specification is likely to reflect those competing uses. The starting point for survey and valuation should be that adopted for retail warehouses where values may be higher than for type B
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Type B: Purpose built modern ( post late 1980s ). This type is considered most likely to meet the ideal characteristics, specifications and location requirements. Valuation will be driven by rental evidence and location
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Type C: Older purpose built or converted from retail or industrial building. The better and more valuable hereditaments of this type will enjoy many of the benefits of Type B. This is especially the case with location since Type C hereditaments are frequently situated on main arterial and similar busy roads. These considerations, together with the level and suitability of the adaption works, will determine the appropriate level of value.
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Type C hereditaments encompass a wide range of premises and consequently will have a value range from the Type B level to Type D ( see below ). It is therefore necessary when dealing with Type C hereditaments for the valuer to exercise judgment most subjectively. Local knowledge and site appraisal will play a major role in determining the relative position of this wide band of values. It is expected that the rental evidence and survey details will be examined critically. In arriving at rateable value appropriate adjustments to passing rents so as to properly reflect tenants improvements and the effects of conversion from a former use will be necessary where these are not reflected in the rent.
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It is not uncommon for such units to be in former showroom accommodation and rental evidence for that class may also prove to be a useful cross reference.
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Type D: Hereditaments located on industrial estates. Values will be determined by the prevailing industrial values within the locality. In some circumstances value will derive from that appropriate to Type C hereditaments where locational aspects or adaptation effectively mean that a Type C categorisation is more appropriate. For example, if a unit fronts a good road and there is access from it and good visibility limitation of value to that of an industrial estate will result in an undervalue of the hereditament.
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Type E: Back street garage / workshop. Often located in tertiary positions among other mixed age hereditaments or adapted from other uses where that use is no longer competitive. Value will be determined by prevailing industrial values within the locality.
3.0 Valuation Considerations
3.1 Location
The most important factor is always location. These centres offer distress goods and it is the industry’s view that people will be unwilling to travel a long way for something they would rather not have to but at all. The desired catchment offers a population of 40,000 within half an hour’s drive time. Ideally, drive times should never exceed 15 minutes and in major urban centres even less. It is however admitted that in remote rural locations up to a one hour drive time may be necessary. Other ideal characteristics are ; clear visibility, which is always of prime importance, access and sufficient car parking. Fast flowing traffic or lane restrictions and barriers are a disadvantage; whereas a busy open commuter route subject to speed limits but without too many traffic lights or other restrictions to impede the ability to turn in safely are preferred. Access for bulk delivery is also useful.
3.2 Specification
Generally, property specification is fairly flexible. Main requirements for a good modern unit are typically; a site area of a third of an acre [ 1350m2 ] with clear trading space of 350 – 500m2, eaves height 4 – 5 metres and external parking for 10 – 12 car spaces. However, these requirements may be compromised in order to secure a site that is very well located and hence likely to generate high turnover. There may also be strong local factors which overcome what may appear to be an impaired trading position. For example, Kwik Fit has traded very successfully from an underground site in Chelsea where the catchment is high, competition is thin and sites are hard to find.
3.3 Summary
One summary in use by the trade is VAPs and BAPs.
| V(isibility) | Is the site easily visible from the road? |
| A(ccess) | The property may be visible, but can the driver get to it? |
| P(arking) | Does the site have adequate parking ? Current industry ratios are approx 1 car space to 500ft2 / 46m2 of building. |
| B(ays) | Layout. Preferably a building running along the road with an arrangement of exhaust bay / reception / tyre bays, and storage at the rear or around the back of the building. |
| A(daptability) | Can the existing building be adapted ? A fragmented layout is little use. |
| P(rominence) | The property may be visible from the road, but is it a prominent ( busy ) main road ? |
4.0 Referencing and Data Capture
4.1 Method of Measurement
For the 2010 rating list all properties are to be measured to GIA. This will take place as part of the network’s survey data improvement whereby all industrial / quasi-industrial properties are measured to GIA.
4.2 SCAT coding
All properties used as exhaust and tyre centres are to be identified and SCAT coded 095. [R2005 IA 020604 Appendix A]. At present these properties are not consistently identified by SCAT code – many are identified by SCAT code 289 [Vehicle repair workshop], or by SCAT code 096 [factory, workshops and warehouses], and even as shops.
4.3 BCI coding
BCI to be F There are instances where these properties are recorded as BCI = S(hop). This is not appropriate, but see 4.7.below.
4.4 BUT coding
All tyre and exhaust centres are to be Building Use Type coded TEC. BUT code TEC exists to identify tyre and exhaust centres and should be used. At present these properties are not consistently identified by BUT code.
4.5 Primary Description Code
The primary description code is CG1, but this defaults to ‘Vehicle Repair Workshop and Premises’. The CCT recommends that the default description is over-written to give ‘Tyre and Exhaust Centre and Premises’.
4.6 Accommodation Use Codes
The existing accommodation use codes are appropriate for tyre and exhaust centres.
The following relativities are given in order to provide a consistent approach to devaluation and valuation. As in all cases, each hereditament should be looked at on its own merits. Advantages and disadvantages should be weighed as they would be within the context of local industrial hereditaments and if appropriate, relativity varied accordingly.
| Accommodation Use Code | Description | Comment |
|---|---|---|
| WKS = factor 1.0 | Workshop or Exhaust Bay or Tyre Bay | 100 % |
| REC = factor 1.2 | Reception and waiting areas - including public lavatories. | Up to 120% of main space value depending on quality and access. If public WCs are off the Reception then code as REC and overwrite as Customer Toilets. |
| OFF = factor 1.2 | ||
| ANO = factor 1.1 | ||
| WCE = factor 1.2 | ||
| OWK = factor 1.0 | Works Office | 100%. Where office accommodation is no better than workshop quality. |
| MSR = factor 1.1 | Workshop mess rooms, locker rooms etc. | |
| LOK = factor 1.1 | ||
| ASI = factor 1.0 | Storage areas lacking some of the characteristics of the main building. Typically found to the rear of the workshop, isolated in nature and lacking natural light and/or headroom. | 100%. Vary according to disadvantages and quality (if any). |
| ASU = factor 0.7 | Area under supported first floors (mezzanine) | Record in accordance with RAT IA 070307. |
| ASI = factor 0.5 | Supported first floors (mezzanine) as a tenant fit | Record in accordance with RAT IA 070307. |
| ASI = factor 0.65 (unlifted) | First floors constructed as part of the original building. | Valued at the normal Industrial relativity dependant on quality, use, location, access, usable height etc |
| BAY = NOT TO BE USED | NOT TO BE USED | While workshop areas are referred to as bays .e.g tyre bay, these areas are within the building and should be treated as full value areas as set out in this table. |
4.7 Ancillary land and parking
It is recognised that local custom and practice has dictated whether or not land and parking are recorded as separate items for valuation, or treated as items reflected in the unit price adopted on the main building. This practice note is not prescriptive about this recognising that provided devaluation (of rent) and subsequent valuation are consistent a defendable assessment is the result. However, details of parking and land must be noted for the survey record.
4.8 It is recognised that the market tends to value exhaust and tyre centres on an overall basis. However, the VOA is faced with the problem of making direct comparison between properties when challenged, e.g. that one property lacks a feature that another property has. Using the RSA accommodation use codes makes the thinking behind valuations explicit and can remove the problem of an overall valuation being reduced because of an alleged problem. Further, where properties are rented, in many cases it is a basic property which is rented and features such as a reception area are tenant’s improvements. Hence the market may be right in saying it values overall, but it is not valuing the property Rebus.
4.9 Survey Units
In some areas of the country these properties are to be found on or immediately behind shopping streets. In the past these have been recorded as shops and “tweaking” of the survey accommodation use codes has taken place to arrive at the desired level of value. E.g. The part of the property fronting the street has been zoned while the workshop at the rear has been captured as a factor of the shop value.
This is not desirable, and no longer necessary with the ability of RSA to support survey units with different BCIs.
The adoption of two survey units is recommended in these circumstances. If it is considered necessary for part of the hereditament to pick up a level of value derived from adjacent shops then the workshop part should be captured as survey unit one with BCI = F (picking up value and scheme description from the tyre and exhaust matrix), while the “retail” area can be captured as a second survey unit with BCI = S(hop) and pick up an appropriate level of value from its valuation matrix. This avoids the need to value the workshop as a factor of the local shop value.
4.10 Plant and Machinery
Details of rateable plant and machinery are to be recorded
At present this is not consistently carried out. With the publication of summary valuations on the internet there is a need to demonstrate to ratepayers that they have each been treated in the same fashion.
Most units will contain air compressors and pipework to distribute the air to power pneumatic tools. These are rateable under Class 1 Table 1(i) - power. An air receiver may also be found nearby and this should also be identified - rateable under Class 1 List of Accessories - 2(ii) storage cylinders and vessels.
It is unlikely that any further plant and machinery, other than normal heating and electrical installation, will be identified but caseworkers should look for any steelwork, supports, gantries etc which may be present and may be rateable under List of Accessories 2(i).
In the absence of any actual evidence of costs of the particular P&M at the hereditament a sum of £300 RV is to be added to the rateable value to reflect rateable P&M in the hereditament. This figure has been arrived at from a consideration of costings of air compressors, air receivers and pipework. Make up of the figure is as follows:
| Compressor | £4,500 |
| Air receiver | £710 |
| Pipework (say 65mm x 40m @ £45) | £1,800 |
| Total capital cost | £7,010 |
| Decapitalise @ say 4.4 % | £308 |
| say £300 RV |
Where actual rateable P&M is significantly different variation from this sum is appropriate
5.0 Valuation
5.1 The existing industrial scales can be adopted for exhaust and tyre centres. These are AXFGIA1 (analysis) and VXFGIA1 (valuation).
5.2 It is recommended that identified exhaust and tyre centres are valued on an address based matrix accessed via the sublocation code. This will “ring fence” the properties within a scheme and enable / lead to comparison of values between properties within the scheme.
5.3 Location is of prime importance in the value of these properties, tempered by the characteristics of the building /site.
5.4 At present a variety of sublocation codes are in use, but to achieve national conformity it is recommended that the following codes be adopted. The codes derive from the beacon properties identified above.
| Beacon | Code | Comment | Remarks |
|---|---|---|---|
| A | TECA or the local retail warehouse sublocation code | Retail warehouse park | Since value is determined by the prevailing retail warehouse tone it is anticipated that these properties may be sublocated as retail warehouses |
| B | TECB | Purpose built post 1989 | Since these are purpose built properties it is anticipated that they will have the best locations. |
| C | TECC | Purpose built pre 1990 and conversions | This will encompass a wide range of building types / ages with value dependent on position |
| D | TECD or the local industrial sublocation code. See remarks | Properties on industrial estates. | Since value is determined by prevailing industrial values, it is anticipated that these properties will have a unit price £/m2 in line with the equivalent size / age units on the industrial estate. These properties may be coded with the sublocation of the industrial estate / industrial location.* |
| E | TECE or the local industrial sublocation code. See remarks | Backstreet garage / workshop | Since value is determined by prevailing industrial values, it is anticipated that these properties will have a unit price £/m2 in line with the equivalent size / age units in the industrial locality. These properties may be coded with the sublocation of the industrial locality. * |
| * these properties will be SCAT coded 095 and a search for properties in use as tyre and exhaust centres using the SCAT code will enable them to be identified. |
6.0 The Market
6.1 Current industry estimates are that there are around 18,000 independent garage and fast-fit outlets in operation.
6.2 Within this market even specialists are unable, with any degree of accuracy, to provide a definitive figure on the size of the UK tyre and exhaust / “fast fit” market. This is complicated by links between firms and tyre manufacturers, marketing / branding links between companies, and franchise operations. Within this market are groups which have made their brand image that of tyre or exhaust replacement, e.g. Kwik Fit, and also groups which have evolved from a more comprehensive car servicing / repair background, e.g. Nationwide Autocentres.
6.3 An increasing role is being played by the fast fit operations, who no longer just offer rapid turnaround replacement tyre or exhaust services, but have, for example, moved into MOTs and vehicle servicing.
6.4 At the same time, the rest of the independent garage sector – and most franchised dealer workshops – have begun to encroach on the fast-fit preserve of tyre supply, and most outlets are now able to match fast-fits for price on this staple commodity.
6.5 As well as a complex marketplace the picture is further complicated by the large number of operators, with only a few firms able to claim a presence across the country. See table:
| Rank | Business | Sites |
|---|---|---|
| 1 | Kwik Fit Group Ltd | 570 + |
| 2 | Associated Tyre Services / Euromaster | 527 |
| 3 | Nationwide Autocentres | 208 |
| 4 | National Tyres & Autocare | 200 |
| 5 | Hi-Q | 142 |
| 6 | Central Tyres | 63 |
| 7 | STS Tyre and Exhausts [Stapletons Tyre Services] | 53 |
| 8 | Formula One Autocentres | 48 |
| 9 | Wilco and Motosave (Fast Fit Exhausts) | 30 |
| 10 | Mr Clutch Autocentres | 28 |
| 11 | Mr Tyre Ltd | 20 |
| 12 | Merityre Specialists Ltd | 19 |
| 13 | Bathwick Tyres | 17 |
| 14 | Universal Tyre and Autocentres | 16 |
| 15 | Watling Tyres | 15 |
| 15 | Exhaust tyres and Batteries (Worcestershire) Ltd | 15 |
| 17 | Setyres (Southern Tyres Co) | 14 |
| 17 | Malvern Tyres / Malvern Tyres [wholesale] | 14 |
| 19 | Dexel Tyre Company | 13 |
| 19 | Grays Tyre and Exhaust Centre | 13 |
| 20 | Micheldever Tyre Services | 12 |
| 20 | Selecta Tyre | 12 |
6.6 As a result operators in this sphere can be found in a wide variety of buildings, and in a wide variety of locations.
7.0 State of the market
7.1 The situation can best be described as uncertain. In January 2008 Kwik Fit advertised nationally that it was looking for new locations, while in April 2008 National Tyres and Autocare announced that it was looking for an additional 100 sites across the country. Indeed economic trends may assist the fast fit industry in that with fewer new cars being sold a larger number of existing cars will require replacement tyres, exhausts, and servicing. Moreover, these cars will fall out of manufacturer warranty schemes and their owners will no longer be tied to the workshops of the car sales franchises.
Against this will be the inclination of car owners to try and delay the replacement of parts / servicing of their vehicles. Having said that there is little option if a tyre needs replacing. What can be anticipated is that there will be considerable pressure on pricing of products and services.
8.0 Rental Information
8.1 Rental information is available in respect of this category of property, but it needs careful consideration.
8.2 It is apparent that some firms have a policy of occupying freehold or long leasehold property, while other firms are will to occupy under conventional leases. E.g. ATS Euromaster are a firm which prefers owner occupation to renting.
8.3 Other firms have regarded their estate as a means of raising capital through sale-and-leaseback arrangements. E.g. Kwik Fit have made extensive use of sale-and-leasebacks offering their properties at auction.
8.4 Kwik Fit rents.
As a result of sale-and-leaseback deals Kwik Fit frequently occupy properties under leases which provide for minimum fixed rent uplifts at the first two or three reviews. These leases should not be disregarded as sources of rental information.
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a) The review clause is to provide a minimum uplift at review, while the actual review rent may be higher than this minimum figure ( to open market value ). The rental history of Kwik Fit leases should be examined to establish whether or not the current rent stated is a product of the fixed uplift provision, or is actually to open market levels.
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b) Kwik Fit introduced these leases some time ago, and it is not impossible for properties to no longer be subject to the fixed uplift review provisions.
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c) Kwik Fit leases may in fact have expired, but Kwik Fit remain in the same property under new leases possibly with standard open market review provisions.
9.0 Prior Agreement
9.1 Due to the fragmented market it is not believed it will be possible to prior agree this class of property.