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

Section 207: car supermarkets

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

Scope

1.1 This section applies to premises constructed or adapted for use as car supermarkets. A car supermarket is generally a large multi-brand dealer specialising in good second hand cars that are usually less than three or four years old. One of the most distinguishing features about a car supermarket is the volume of cars stocked on site. Typically the interior of a car supermarket tends to be quite basic by showroom standards and is often little more than an industrial shed with painted floors and minimal partitioning.

1.2This rating manual section does not apply to car lots, showrooms, garages or workshops or petrol filling stations with some ancillary space. Multi dealership car showrooms selling new cars should be differentiated from car supermarkets and these should be valued in accordance with car showrooms.

2. List Description and Special Category Code

2.0 Primary Description Code: CX List description: Car supermarket and premises SCAT code: 044 SCAT suffix: S

3. Responsible Teams

3.1 This is a Specialist class. Specialists within each Unit will be responsible for the survey and valuation of car supermarkets in the class.

3.2For Reval 2017, it is anticipated that each unit will have a named individual responsible for the class.

3.3It is also recommended that each Unit should allocate a named co-ordinator, or Lead Valuer, to act as a point of contact within the Unit. This Lead Valuer will be responsible for assisting in the delivery of the valuation scheme and also for liaising on value and technical issues with other Lead Valuers across adjoining Units.

4. Co-Ordination

The Car Supermarket Class Co-ordination Team has overall responsibility for the co-ordination of this class. Contact details are in the VPs & CCT folder here. The team are responsible for overseeing the approach to car super 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 have a responsibility to:

  • follow the advice given at all times – Practice Notes are mandatory

  • not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team

The use for planning purposes is usually sui generis.

6. Survey Requirements

Car Supermarkets should be measured to gross internal area (GIA). An inspection checklist is provided at Appendix 1.

6.1Internal and external photographs are mandatory and should include photographs of all main areas including show rooms, ancillary offices, workshops, and external car sales areas.

6.3 Air Conditioning The approach to air-conditioning remains unchanged for Reval 2017. Air-conditioned areas need to be identified separately on the survey. Details of Air Conditioning systems should also be noted. Air-conditioning to be added as a 5% addition to the appropriate line entry using the air plus adjustment code, the beacon characteristics for air conditioning set to partial if the whole property is not air conditioned.

6.4 Quality Adjustments should not be made for quality other than in exceptional circumstances, for instance where an old workshop is attached to a modern showroom. Generally quality should be reflected in the showroom price.

6.5 Office Area Offices will tend to fall into the following categories:

6.5.1 Sales offices and reception areas that face the showroom or are only partitioned from the showroom, should be captured as OFF. This will value at a relativity of 100%. These offices are often occupied by sales staff, the dealer principal, etc. The partitioning used is commonly glazed.

6.5.2 Ancillary offices usually form a defined block of offices used for administration, accounts, service administration, human resources and such like. These should be captured as ANO and achieve a relativity of 60%.

6.5.3 First floor offices All first floor offices should be classed as ANO unless sales areas or reception or where offices are of an exceptional standard when they should classed as SRM or OFF as appropriate. The floor level code should be 01 on the upper floor.

6.5.4 Offices located within the workshop are normally of a more basic quality and these should be captured as OWK which attracts a relativity of 50%.

6.7.1 Land The land element will vary depending upon the type of car supermarket. In many cases the land will be a significant item within any car supermarket valuation and the adoption of a uniform valuation method is recommended to ensure consistent valuations.

6.7.2Where car spaces are not marked, the measured gross area of the land, less essential access to the workshop only and any landscaped areas, should be used and divided by a notional car space of 20m2. This will reflect circulation. Areas used for vehicle access into the showroom should not be deducted from the area.

6.7.3Any areas of landscaping (flower beds, embankments etc.) or areas used for essential access into the site or to the workshop areas or to other separately assessed buildings should be excluded.

6.7.4Car spaces should be captures as Other Additions and valued adopting a price per space. Codes VS1-VS9 are available options in the Other Additions tables however the codes used should ideally be rationalised to VS1- VS3. VS1 and VS2 are intended for main display and customer parking areas. Spaces normally used for workshop parking and vehicle storage in areas not normally accessed by the public should be captured as VS3 and will attract a lower relativity to VS1 and VS2.

6.8 Storage Land and Compounds Storage yards if used solely for car storage (no access to the public) can be captured as line entries in the main survey or in Other Additions. In both cases, the land should be expressed in terms of an area per square metre. The use of codes LFH, LFG should be adopted.

6.9 Valet Bays located in workshop type buildings should be captured either as WKS or ASO. ASO should only be used where the valet bay is housed in an inferior building to the workshop space.

6.10 Plant and Machinery Details of any items of Plant and machinery present should be noted and identified on the survey in the usual way. Air conditioning see para 6.3. Car washes often have rateable elements such as settings and drainage. Rateable items such as CCTV cameras, fire protection systems, sprinklers, inspection pits and air compressors and receivers and CCTV may also be present. Details of all plant and machinery should be accurately recorded.

6.10.1 For rateability and valuation, reference should be made to the 2017 cost guide.

7. Survey Capture

Rating Surveys should be captured on RSA and plans and surveys stored in EDRM.

8. Valuation Approach

The rentals comparison method is the appropriate method to be adopted. There is rental evidence available and once adjusted such evidence can be analysed on a £/m2 basis. The relevant rental adjustment practice note in the Rating Manual, Section 4: Part 1 provides guidance on rental adjustment.

9. Valuation Support

9.1 All valuations for the 2017 Rating List should be made using the Rating Support Application (RSA).

Appendix 1

Inspection checklist

CAR SUPERMARKET  INSPECTION  CHECKLIST 

Occupier

    

 

Address

    

 

Location  main road frontage, adjoining other car showrooms etc

     

 

Rental details including basis of rental calculation OMV, % build costs etc

      

Car Supermarket Type  See PN  Rating Manual section 6 part 3 - section 207

Type1 Big Shed Big Land Old or New

Type 2 Big

Practice note 1: 2017: Car supermarkets

1. Market Appraisal 2008-2015

Sales of second hand cars were depressed during the downturn from 2008 but the market began to recover alongside the market for new cars from 2011 onwards. More detail can be found in the car showroom Practice Note. One effect of the recession was that the age of the average UK vehicle rose to reflect that people were changing their cars less frequently.

1.1Over the last three years Personal Contract Plans, whereby the purchaser pays an initial deposit on a new car coupled with relatively low fixed monthly payments over a pre-determined period and the option to make an end of term payment to buy it or use the residual value in the car to buy a new car, means that there is likely to be a ready supply of three to five year old cars in good condition available to the second hand market. This is the main profile of second hand vehicles usually sold in car supermarkets.

1.2 Car supermarkets in the past 3 years have been affected by an increase in Car Auction sites competing for trade cars and the improved offers made by car dealerships on used cars. The increase in the use of internet sites offering competitive car prices has also impacted on the car supermarkets.

1.3One of the largest car supermarkets, Car Craft, ceased trading on 30 April 2015 although this should not be seen as indicative of the state of the entire class.

Changes From Last Practice Note

2.1No previous Practice Note.

3. Ratepayer Discussions

3.1None yet undertaken.

4. Valuation Scheme

4.1 There is no agreed valuation scheme. Car supermarkets are valued in accordance with the main RM section at Rating Manual section 6 part 3 - section 207. The location and type of supermarket are important factors when valuing this type of property.

4.2 The prime locations are likely to provide access to large populations through the local main roads and motorway network. Good locations are often on the edges of larger towns and cities and often located adjoining other showroom premises.

4.3 Highly visible sites with good access, adequate customer parking in prime locations are the most desirable.

4.4.1 The following examples give guidance to the types of car supermarkets, but this is not an exhaustive list and a wide variety of car supermarket types exist. A pictorial guide is set out in Appendix 1.

Type 1 - “Big Shed - Big Land”. Modern purpose built car supermarket with a large showroom area displaying hundreds of cars inside, usually glass fronted. Extensive land area will surround the building which is mostly put to sales display spaces, but will also provide customer parking etc. There is likely to be ancillary accommodation including workshop accommodation and administration offices of a respectable standard.

Type 1b - As Type 1 but older premises, with less glazing and often in a more industrial location, but similar big shed with big land area.

Type 2 - “Big Shed - Small Land”. Modern purpose build car supermarket with a big showroom area and modest land area. Often glass fronted, the accommodation will resemble type 1 but simply without the same extent of land, often the outside space is limited to mostly customer parking and a modest display. Hundreds of vehicles will be on display inside.

Type 2b - As Type 2 but older premises, usually converted from an industrial use. Typically less glazing and often in a more industrial location or one which is less prominent.

Type 3 - “Small Shed - Big Land”. Modern purpose built supermarket but often with a modest showroom area of between 500 - 2500m2. Looking like a modern warehouse unit with additional glazing, the accommodation will otherwise resemble Type 1, but without the same extent of ancillary space e.g. no workshop space. Externally there is an extensive area of vehicle display typically for at least 500 units, plus customer parking facilities.

Type 3b - As Type 3 but older premises, usually converted from an industrial use. Typically less glazing and often in a more industrial location or one that is less prominent.

4.4.2 These types will vary in scale but whatever the type they will be generally be larger than a car showroom.

4.5Units should review scat code 042 to identify any sites which appear to be larger than would normally be expected for a car showroom to check whether they are more appropriately coded and valued as a car supermarket.