Rating Manual section 6 part 3: valuation of all property classes

Section 130: bowling alleys

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This instruction applies to all tenpin bowling alleys.

Ten-pin bowling was introduced into this country in 1960 and initially enjoyed increasing popularity until the late 1960s and 1970s, when the game’s popularity declined dramatically.

There was a resurgence of interest, coinciding with the economic boom of the late 1980s, and many new bowling alleys were built from 1989 until about 1993. With the economic slowdown, few new alleys were opened but as the economy recovered construction of new alleys of all types recommenced. The concept has however evolved, and bowling can now form part of much larger Family Entertainment Centres. The major operators have particularly sought new premises on Leisure Parks.

2. List description and special category code

Primary Description: LX List Description: Bowling Alley and Premises Scat Code: 028 Scat Suffix: S

3. Responsible teams

This is a specialist class of property, to be valued by Specialists in each Business Unit.

4. Co-ordination

The Class Co-Ordination Team has overall responsibility for the co-ordination of this class. Contact details are in P:\CEO1\Intranet\Reval 2017\VP & CCTs. The team is responsible for approach, accuracy and consistency of valuations. The team will deliver Practice Notes describing 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 depart from the guidance given on appeals or maintenance work without approval from the co-ordination team •seek advice from the co-ordination team before starting any new work

5.1. General

Other than planning and adherence to the provisions of the Licensing Act 2003 and the Gambling Act 2005, no specific legal framework is understood to exist for this class of property.

5.2. Rateable Elements

5.2.1. The Bowling Lanes

Essentially a bowling centre is a large box designed to contain the maximum number of bowling lanes, opening on one side to give easy access to ancillary areas.

The bowling lanes occupy most of a typical centre and these are considered to be rateable as part of the hereditament.

5.2.2. The Pin-Spotting Equipment

The costly automatic pin-spotting equipment in a ten-pin bowling alley is considered to be non-rateable and rents including such items must be adjusted. In a receipts and expenditure valuation such equipment will form an important item of tenant’s capital and costs of maintenance, and provision for renewal, will be considerable. Alternatively, pin-spotters are sometimes separately hired.

5.2.3. Fit Out

Nearly all new lettings for this use are as shells, with operators commonly spending substantial sums to fit out.

The walls, ceilings, flooring, bowling lanes and services are rateable, whilst the bowling machinery, video and electrical wiring for the machinery and loose equipment are not. It is estimated that around 50% of the total fit out cost relates to the rateable elements.

6. Survey Requirements

Bowling Alleys should be measured to gross internal area (GIA) in accordance with the VOA Code of Measuring Practice for Rating Purposes.

The survey should record the following information:

The type of premises, previous use where known, age, construction, services (including heating and/or air conditioning), the date when last refurbished, the number of lanes, the type extent and quality of ancillary facilities, the number and type of gaming machines, the availability of car parking, location, transport links, existing and proposed competition, competing or complementing leisure attractions in the area, etc.

The GIA of the ancillary facilities should be separately recorded

7. Survey Capture

Rating surveys should be captured on the Rating Support Application (RSA) and plans and surveys stored in the property folder of the Electronic Document Record Management System (EDRM).

8. Valuation Approach

8.1 Method of Valuation

8.1.1. Rental Method

A significant proportion of all bowling alleys are subject to arm’s length rents, and whilst, clearly the rental method is to be favoured, it should be borne in mind, that rents on new letting are often on a shell basis. In such cases, details of fit-out costs will be required for analysis; rents should be analysed at a price/m2 GIA .

Rents on review need to be treated with caution, as the rent review provisions under the lease may provide for the rent to be determined having regard to other uses; it will therefore be necessary to establish the precise rent review terms.

Adjustments may also need to be made to rents, in respect of rateable and non-rateable items (see paragraph 5.2 above).

The best method of achieving uniformity in assessments is by the application of a price/m2 to the GIA of the whole building. (See relevant Practice Note.)

8.1.2. Receipts Information

Whilst regard can be had to receipts information, it is only likely to assist in identifying the order of relativity of value between different properties. Such information must be treated with caution, as incomes have been found to vary far more than rents, and evidence shows that the letting market is not receipts driven.

8.2. Rental Analysis

Rents on bowling alleys are capable of analysis in a number of ways:

8.2.1. GIA

Given the increasing tendency for modern bowling alleys to include large areas of ancillary accommodation, analysis based on an overall price per m2 (GIA) basis is the best method of achieving uniformity in assessment.

8.2.2. Linage

Emphasis on this comparison factor has declined in importance, as the proportion of total income generated purely from bowling has reduced. As a result, it is not suitable as a reliable method of analysis. Linage is the average number of games played per lane per day. Information may be obtained as to linage when considering a rent or upon inspection. Statistics should include the number of days in each of the relevant years that the bowling alley was open.

8.2.3. Number of Lanes

For analysis purposes, this approach is straightforward, requiring merely a mathematical division.

It is, however, an unreliable method of comparison unless properties have the same number of lanes and very comparable areas of ancillary accommodation.

8.2.4. Percentage of Gross Receipts

It is not appropriate to use this as the primary method of comparison, since open market rents for bowling alleys are not determined having regard to receipts, either for a new letting or upon rent review. Evidence shows that receipts vary far more than rents.

Where receipts information is available, then revenue from all sources, e.g. advertising, gross sales of refreshments and car parking (unless separately assessed) should be included in any analysis.

8.3. Valuation Factors

8.3.1. Location

The prime location for a bowling alley is an out-of-town leisure park with complementary leisure uses, good road access and ample car parking. Operators will pay close attention to the demographics of the catchment population.

8.3.2. Age

Many of the older bowling alleys have undergone significant works of improvement since they were built / converted; such units should be valued having regard to the date these works were completed. An adjustment for quality may be required.

8.3.3. Construction

Alleys constructed from the late 1980s onwards are generally purpose-built, often on leisure parks; construction is usually a steel portal frame with profiled metal sheet cladding and roof, lined internally and insulated. Normally the main areas will have a suspended ceiling and a ducted warm and cool air circulation system. These alleys will have the highest values. Several alleys from this period were converted from ex-retail warehouses; these will be the next highest in the range of values.

Bowling alleys constructed in the 1960s were often in converted cinemas or purpose built in part of a building, often at first floor level. Many of these are in relatively poor locations and do not have sufficient space to adequately offer the range of ancillary facilities provided at most modern alleys. These will be lower down the range of values.

9. Valuation Support

Within RSA, analysis and valuation scales specifically for this class enable input of factual data to achieve valuations that follow the recommended approach.

Adjustment for fit-out should be made as a survey unit adjustment under code QAL e.g. + 1.2650 as adopted.

Additional support is available through:

*Survaid.

*Class Co-ordination Team for Leisure Attractions.

2017 Practice Note

1. Market Appraisal

The total number of tenpin bowling alleys has remained relatively static over the last seven years and the industry, which comprises a mix of chain, niche and independent operators, has remained very fragmented.

Since 2008, economic uncertainty, high operating costs and an inability to attract regular repeat business have combined to produce very difficult trading conditions. Rental levels have suffered as a result although the impact has varied across the sector dependent on location, customer base and the range of facilities on offer.

Operators have responded differently to the challenging circumstances they have faced; some have withdrawn from the market completely, some have undergone financial restructuring which resulted in Company Voluntary Arrangements, a number have chosen to reduce the size of their estate whilst others have actively expanded the size of their portfolio.

Pro-active management to control outgoings, re-branding, discounting prices, and improving the range, type and quality of the catering and non-bowling activities that are on offer, are all measures that have been widely adopted to help stabilise / improve viability and enhance general appeal.

Many operators are now reporting that they are starting to experience a growth in revenues; this growth has largely come from an increase in the income received from secondary spend (catering / bar / other entertainment). An improving economy allied to this trend suggests that the outlook for the tenpin bowling industry is one of cautious optimism; this optimism is likely to result in an improvement in rental levels.

2. Changes from the Last Practice Note

There are no changes from the approach that was adopted for the 2010 Rating Lists.

3. Ratepayer Discussions

There have been no 2017 List discussions on this class of property.

4. Valuation Scheme

The recommended valuation approach is to adopt an overall price per square metre GIA which reflects the location and physical characteristics of the property.

The value to be adopted should be derived from an analysis of the available rental evidence.

The value of the ancillary accommodation is deemed to be reflected in the price adopted.

An appropriate addition to reflect fit-out should be made in accordance with the guidance contained in Appendix 1.

An end allowance for divided or split accommodation (i.e. two floors) of up of 10% can be made in appropriate circumstances.

In the absence of direct evidence to the contrary, an allowance of up to 2.5% can be made on bowling alleys which comprise 30 or more lanes.

2017 Practice Note Appendix 1

The following scale of fit-out additions should be applied to the adopted shell rate.

These figures assume a standard of fit-out equivalent to that of a major operator. Judgement will be required for those properties with a lower standard of fit-out. Fit-out additions for converted and / or refurbished properties should reflect the date of conversion / refurbishment.

AGE % Addition
2015 26.5%
2014 25.5%
2013 24.5%
2012 24.0%
2011 23.5%
2010 23.0%
2009 22.5%
2008 22.0%
2007 21.5%
2006 21.0%
2005 20.5%
2004 20.0%
2003 19.5%
2002 19.0%
2001 18.5%
2000 15.0%
1999 15.0%
1998 15.0%
1997 15.0%
1996 15.0%
1995 15.0%
Pre 1995* 10.0%*
  • The addition for fit-out which pre-dates 1995 is to be fixed at 10% providing there has been no subsequent refurbishment or replacement.

Practice Note 1 : 2010 : Bowling Alleys

1. Co-ordination Arrangements

This is a Specialist Rating Unit (SRU) Class, responsibility for ensuring effective co-ordination lies with the SRUs. For further information see RM: Section 6: Part 1.

The R2010 Special Category Code 028 should be used. As an SRU Class the appropriate suffix letter should be S.

2. State of the Market at April 2008

Since 2003 the industry has been generally static. A number of older alleys have closed, with only a handful of new alleys opening, usually by smaller independent operators.

3. Analysis

3.1 The most consistent answers are produced by analysing rents in terms of GIA as was negotiated with the major agents on the 2000 and 2005 Rating Lists. This will continue to be the basis for 2010.

Age of shell

1989-1993

1994-1998

1999-2001

2002-2004

2005 +

Fit-out addition







(% of rent)

15%

17.5%

20%

25%

26.50%

These figures assume fit-out equivalent to that of a good major operator and would be at a higher level than many refurbishments or conversions of older premises.

Judgement will be needed on the addition for fit-out on older properties, where substantial refurbishment has taken place and those with a lower quality of fit-out.

4. Valuation

4.1 Following on from previous national negotiations, all properties should be valued for the 2010 Rating Lists on a £/m2 GIA basis to include ancillary accommodation such as bar, restaurant or games area. Levels of value will be based on the analysis of rents of bowling alleys within, and adjacent to, the SRU area in question, with adjustment to AVD, and an appropriate addition to reflect fit-out.

4.2 An end allowance for divided or split accommodation (i.e. two floors) of up of 10% can be made in appropriate circumstances.

4.3 Receipt information must be treated with caution. Analysis has shown incomes to vary far more than rents, as the letting market is not accounts driven. Receipts are one of a number of factors likely to assist in identifying the relativity of value between different properties when taking a “stand back and look” view of the property.

4.4 Converted units should be valued having regard to the date of conversion or improvement, and the quality of that conversion.

5. IT Support

The development within RSA of analysis and valuation scales specifically for this class should enable input of factual data to achieve valuations that follow the recommended approach.

Practice Note 1 : 2005 : Bowling Alleys

1. Co-ordination Arrangements

This is an SRU Class. Responsibility for ensuring effective co-ordination lies with the SRUs.

For further information see Rating Manual: section 6 part 1.

The R2000 Special Category Code 028 should be used. As an SRU Class the appropriate suffix letter should be S.

2. State of the Market at April 2003

Since 1998 the industry has generally consolidated whilst enjoying steady income growth. Only the medium operators have actively expanded. Over twenty new alleys have opened in England and Wales within the last five years.

3. Analysis

3.1 Negotiations on the 2000 Rating List with the major agents resulted in agreement that the most consistent answers are produced by analysing rents in terms of GIA. This will continue to be the basis for 2005.

3.2 Analysis of fit-out has resulted in the following scale of recommended fit-out additions in respect of the major operators for the 2005 Rating List: Interpolate between the years, as thought appropriate.

Age of shell

1984-1988

1989-1993

1994-1996

1997-1999

2000 +

Fit-out addition



(% of rent)

15%

17.5%

20%

25%

26.50%

These figures assume fit-out equivalent to that of a good major operator and would be at a higher level than many refurbishments or conversions of older premises.

Judgement will be needed on the addition for fit-out on older properties and those with a lower quality of fit-out.

4. Valuation

4.1 Following on from the 2000 national negotiations, all properties should be valued for the 2005 Rating List on a £/m2 GIA basis to include ancillary accommodation such as bar, restaurant or games area. Levels of value will be based on the analysis of rents of bowling alleys within, and adjacent to, the SRU area in question, with adjustment to AVD, and an appropriate addition to reflect fit-out.

4.2 An end allowance for upper floors of up to 10% per floor can be made in appropriate circumstances.

4.3 An end allowance for divided or split accommodation (i.e. two floors) of up of 10% can be made in appropriate circumstances.

4.4 Receipt information must be treated with caution. Analysis has shown incomes to vary far more than rents, as the letting market is not accounts driven. Receipts are one of a number of factors likely to assist in identifying the relativity of value between different properties when taking a “stand back and look” view of the property.

4.5 Converted units should be valued having regard to the date of conversion or improvement, and the quality of that conversion.