Section 250: civil airports
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
This instruction applies to all civil airports, airstrips, heliports and helipads.
Specific valuation guidance for civil airports is located in appendix 1, and specific valuation guidance for airstrips, heliports and helipads (including airstrips and Helicopter Landing Sites, forming part of a larger hereditament) is located in appendix 2.
2. List description and special category code
|Major International and Regional Airports||MX||Airport and premises||059||U|
|Minor Civil Airport||Airport and Premises||005||S|
|Airstrip – private and non-private||Airstrip and Premises||006||G|
|Heliports and helipads||Heliport and Premises Or Helipad and Premises||126||G|
3. Responsible teams
Civil Airports are grouped into 5 categories:
- A. Major International and Regional Airports
This category is valued by the Utilities and Transport (U&T) Team of the National Specialists’ Unit (NSU).
- B. Minor Civil Airports
This category comprises of all airports listed within Pooley’s Guide which while this is now historic still provides a useful form of categorisation. These have permanent surfaced runways, excluding those in Category A. For valuation purposes they are subdivided into:
- B1 Commercial, and
- B2 Other Airports.
The information on which this subdivision is made is derived from Pooley’s Guide and can be over-ridden by specific evidence of actual levels of commercial activity.
The NDR Unit Specialist is responsible for valuation and maintenance.
- C. Air Strips
This category comprises of all airports, airfields and airstrips which have grass runways, whether stabilised or not, which are not private airstrips.
These criteria have been adopted for simplicity of identification and ignores volume of business, although these will generally be the least busy of the 3 main categories.
Generalists within the NDR Unit are responsible for valuation and maintenance.
- C2 Heliports and Helipads
This category consists of stand-alone hereditaments which are not subordinate parts of a larger hereditaments, such as a race course or hotel, which are Category E.
Stand-alone Heliports and Helipads need to be identified from Pooley’s Guide and confirmed by site inspections as it by no means clear from the Guide which are Category C2 and which are Category E.
Once identified, the NDR Unit should notify the U&T Team of the NSU, of stand-alone Heliports and Helipads so they can be added to the list included in the Practice Note.
Generalists within the NDR Unit are responsible for valuation and maintenance.
- D. Private Airstrips
These are normally grass airstrips for which special prior permission is needed for landing. They frequently belong to clubs or companies, but also can belong to private individuals, often landowners or farmers.
Generalists within the NDR Unit are responsible for valuation and maintenance.
- E. Airstrips or Helicopter Landing Sites, forming part of a Larger Hereditament
These are not listed, as they will not normally be separately assessed.
Frequently they form part of racecourse or major hotel hereditaments and will normally be considered as subsidiary to the principal occupation.
Any queries of a complex nature arising from a particular case should be raised through the Airport CCT to be referred to the NSU Airport Class Facilitator.
The Airport Co-Ordination Team has overall responsibility for the co-ordination of this class. You can find the contact details here VP and CCT Members. The team are responsible for the approach to and accuracy and consistency of this class. 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
- seek advice from the co-ordination team before starting any new work
5. Legal framework
This class of property has been the subject of litigation largely in terms of the application of the contractor’s basis of valuation.
For guidance the following cases relate to airports.
Coppin (VO) v The East Midlands Airport Joint Committee LT 1970
An airport case with the hereditament valued on the contractor’s basis. The LT concluded that it could not be assumed that there was only one landlord of both the hereditament and the airport let outs. Consequently it could not be said that the hypothetical landlord of the appeal hereditament would necessarily desire the same kind of tenant as the actual landlord.
Assessor for Lothian Region v British Airports Authority 1981 S.C 141 - (Scottish case)
An airport case where the SC decided that in the light of the use and nature of the subject [hereditament] an end allowance should be applied of 50% together with the adoption of a lower decapitalisation rate for the fact that the airport was, in effect, a public building.
Civil Aviation Authority v Assessor for Strathclyde Region 1990 S.L.T 378 - (Scottish case)
A case concerning the value of an airport capable of use to only a fraction of its capacity. Such was the limitation that an end allowance of some 70 % was applied together with a further 10 % for the fact that the airport’s size and runway strength was excessive compared with what was needed to operate.
Bristol Airport PLC v (VO) Bristol 1993 - Decision of the Avon VT
A case concerning the valuation of an airport on the contractor’s basis and covering cost date issues, location factors, contract size, fees, site values, Ebdon and end allowances.
Robin Hood Airport, Doncaster Sheffield Airport - VT Decision 2008
A case concerning the assessment of Robin Hood Airport – a new venture developed from a former RAF aerodrome. The issues on the contractor’s basis concerned the excessive runway width [23% allowance given], airside roads costs and the end allowance for the new venture [35% given].
Oxford Airport - VT Decision 2009
A case concerning the assessment of Oxford Airport. An appeal against the 2005 compiled list figure of £330,000 rateable value effective from 1 April 2005 was dismissed. In addition, the appeal arising from a proposal dated 19 November 2008 against a Valuation Officer’s Notice dated 25 June 2007 to increase the assessment to £400,000 rateable value effective from 25th was confirmed. The issues concerned the valuation of certain buildings at stage 1 land values at stage 3 and the end allowance.
British Car Auctions Ltd (t/a Blackbushe Airport Ltd) v Hazell (VO) LT 2014
A case concerning the application of the contractor’s basis to a minor airport. In particular it provides guidance on the nature of the modern equivalent and its effect on costs and the level of allowances at stages 2 and 5.
Blackpool International Airport v Grace (VO) 2014 - VT Decision
This is an airport case valued on the contractor’s basis. The issues concerned the allowances at stage 2 and the end allowance at stage 5. These were to take account of falling passenger numbers and under utilisation of the accommodation. The VT adopted most of the VO’s figures and gave a 25% end allowance. No allowance was given for the piece meal development of the airport over the years.
Other relevant contractor’s basis case-law
In addition to the above authorities other relevant case law can be found in the Rating Manual. In brief these are as follows:
- Tomlinson v Plymouth Argyle Football Club (1960) 53 R & IT 297 - ability to pay
- Dawkins (VO) v Royal Leamington Spa Corporation (1961) 8 RRC 241 - Philosophy behind the contractors basis and Stage 3
- Gilmore (VO) v Baker-Carr and Others LT 1963 RA 458 - application of the 5 stages
- Cardiff City Council v Williams (VO) CA 1973 RA - factors reflected at Stage 4
- Imperial College of Science and Technology v Ebdon (VO) and Westminster CC LT 1984 RA 213 - application of the 5 stages
- Monsanto v Farris (VO) 1998 RA 107 - Age and Obsolescence allowances at stage 2
- Allen v English Sports Council 2009 LT - Stages 4/5 and Grant
- Westminster CC v Southern Railway Co , The Railway Assessment Authority and WH Smith & Son Ltd  AC 511 - Unit of Assessment
- Woolway (VO) v Mazars  Supreme Court - RA 373 - Unit of Assessment & Identification of the hereditament
- Newbigin (VO) v S J & J Monk (A Firm) CA 2015 – Repair
For guidance the identification of any relevant plant and machinery to be included in the valuation should be made by reference to the Valuation for Rating (Plant and Machinery) (England) Regulations 2000 SI 540, or Valuation for Rating (Plant and Machinery) (Wales) Regulations 2000 SI 1097 (W.75), as appropriate.
6. Survey requirements
Security at airports is extremely strict, therefore advance notice must be given, and contact should be made with the airport operator’s rating surveyor to agree mutually convenient arrangements.
For airside inspections valid passports will be required.
Inspection of airports is undertaken by specialist VOA referencers.
Airports should be measured gross internal area (GIA) in accordance with the VOA/RICS Codes of Measuring Practice.
The survey will include measurement, age and description of the following:
Terminals, Piers, Walkways, Offices, Visual Control Rooms, Fire Stations, Hangers, fuel farms and other ancillary buildings, Runways (m2 and Pavement Classification Number (PCN) rating), Aprons & Taxi-ways (m2 and PCN rating), car parking and any helipads associated with the airport.
There will also be extensive plant and machinery to include: Lighting, settings and supports, tanks, lagoons, barriers, bollards, fire protection, security, compressors, stand by generators etc. Rateability will be determined in-accordance with the relevant plant and machinery regulations.
Any under-utilised areas should also be noted for consideration at the valuation stage.
Airports change constantly. Either in respect of alterations, extensions and demolitions to the hereditament, or changes to the unit of occupation from lettings of part, or taking areas back into the airport for operational purposes. It is therefore crucial that good relationships are fostered with the airport in order to keep abreast of all changes.
It is equally important for the Major International and Regional Airports that good communication channels exist between the airport specialist valuer and Unit specialist referencers to ensure the rating list is correctly maintained.
Standalone airstrips and helipads and heliports
It is unlikely for airside inspections that valid passports will be required as the strips and most helipads are unlikely to be international and require passport control. Passports however are a very useful form of identification. Enquires should be made beforehand however as to the inspection arrangements and requirements.
Inspection of Airstrips & Helipads and Heliports is undertaken by NDR Unit referencers. Such hereditaments should be measured GIA in accordance with the VOA/RICS Codes of Measuring Practice. The survey will include measurement, age and description of the following:
Hangers if any and other ancillary buildings, Runways – surface details – grass and level of drainage (m2) and / or the Pavement Classification Number (PCN) if appropriate and Aprons and car parking.
For helipads the land surfaces can be either prepared grass or some form of hard standing.
It is unlikely that there will be significant plant and machinery but on inspection notes should taken of any lighting, settings and supports, tanks, lagoons, barriers, bollards and any form of fire protection and fighting arrangements. Note should also be taken of any security arrangements and any form of compressors or stand by generators etc.
Rateability will be determined in-accordance with the relevant plant and machinery regulations.
Any under-utilised areas should also be noted for consideration at the valuation stage.
7. Survey capture
Information gathered from inspection and/or research needs to be captured in a word document, and utilising generic electronic survey sheets where appropriate.
This documentation should be saved within the property folder on the VOA Electronic Document Record Management (EDRM) system.
The information should then be entered onto the Non-Bulk Server (NBS).
See appendix 1.
9. Valuation support
Valuation Approach for Categories A and B
The contractor’s basis is the accepted valuation basis for civil airports.
At the antecedent valuation date anything concerning the current market conditions that would have been in the knowledge of a potential bidder for an airport at that date can be had regard to, in as much as they would fall to be reflected in the valuation.
1. Unit of assessment
It is imperative when valuing an airport for rating purposes that facts regarding the unit of assessment are certain from the outset. The airport hereditament will comprise all those parts of the premises over which the airport operator has paramount control. The degree of control will vary from airport to airport, but in normal circumstances the following will usually be included: -
a) The runways, taxi-ways and aprons (the pavements).
b) The terminal or administration building and other buildings occupied by the operator.
c) The Visual Control Room (VCR) or Air-traffic Control Room (ATC) unless separately assessed to NATS.
d) The Fire Station or garaging for fire vehicles and equipment.
e) All those parts of the buildings and land occupied by other parties but under the paramount control of the airport operator such as retail or catering concessions. There must be sufficient control exercised by the airport operator over the concessionaires as to demonstrate de facto that the airport operator is in paramount occupation.
Three distinct types of retail occupation can be identified within airport terminals. These are Duty Free Shops, Retail Concessions and Catering Concessions. The terms of their occupations can be described as follows:
i) Duty Free Shops - these are often occupied under Management Agreements whereby the Airport operator stocks the shops at its own expense and pays a management company to operate the shop. The company is normally paid on a percentage of turnover basis but the receipts and outgoings will be included in the Airport operator accounts. Duty Free shops are sometimes part of the circulation space where passengers are required to go through in order to gain access to the departure lounge.
ii) Retail concessions - these agreements contain stringent conditions to the extent that the Airport Authority retains paramount occupation.
iii) Catering Concessions - these have similar conditions imposed to the retail concessions and consequently the airport authority will retain paramount control.
f) All land within the boundaries of the airport, including common user car parks and roads, both ‘landside’ and ‘airside’, other than separately assessed sites.
g) Advertising rights within the terminal footprint which let on a concession type agreement will be reflected in the main assessment.
The following will normally be excluded from the airport assessment and separately assessed:
a. Crown Occupation, for Customs or Immigration exclusive use. ‘Red’ and ‘green’ channels which are also used for passenger circulation should be included in the main airport assessment as Customs do not have exclusive occupation in these areas. b. Local Authority occupations, for instance, police units etc. c. Any offices, shops, checkouts, catering facilities etc. let out on normal tenancy agreements. d. Hangars together with their own roads or aprons, stores, offices, warehouses, workshops, open storage or parking areas etc., let out on normal tenancy agreements, the occupier having exclusive possession. e. Fuel farms operated by independent oil companies. f. NATS controlled and occupied ATC where occupied under a lease.
Changes of occupation within airports are frequent and will often involve amendment of the main airport assessment. Close liaison is therefore necessary between NDR Units and NSU in order to keep abreast of the changes. Personal contact channels should be established and fostered.
2. The contractor’s basis
Despite the move towards commercial viability the chosen basis of valuation for all civil airports remains the contractor’s basis. This is because these hereditaments are rarely, if ever, let and data for alternative valuation methodologies is unlikely to be forthcoming.
In all the airport cases listed above under paragraph 5 (Legal Framework) the contractor’s basis was adopted and was not in dispute.
However rental evidence may be available on categories B2, C and D and in these cases, comparative valuations should be prepared and liaison with the NSU should take place before an assessment is finalised.
Airports should not be valued on a Receipts and Expenditure basis, however at Stage V of the Contractor’s Basis reference could be made to comparable hereditaments in respect of business activity and comparisons made on the passenger numbers and cargo tonnage data available from CRI and other sources of airport data.
3. Consideration of the valuation stages
The principles of the contractor’s basis in Rating Manual section 4 part 3 are followed for Civil Airports and this forms the basis of the Memorandum of Agreement agreed with the User Group.
In turn the basis and the memorandum are used as a framework for the minor airports with appropriate adaptation. The elements that make up the contractor’s basis and their application to the different categories of airport are discussed below:
The basis will be the estimated replacement cost for the building, or a substitute building approach may be appropriate. Allowances should be made for any age related disabilities, if applicable. In addition if there is functional obsolescence or excessive accommodation it may also be appropriate to make allowances for such factors. However, any such allowances should take account of any refurbishment or updating that has taken place to the buildings. Should a modern equivalent basis be adopted, an allowance may be appropriate to reflect the size of the actual building.
For terminal buildings the costs to be adjusted will be based upon agreed costs for beacon terminals, which are shown in the Practice Note for the relevant rating list, together with costs for other airport facilities. Adjustments to these beacon costs may be necessary to reflect the actual circumstances at individual airports and the particular types of construction.
For most other buildings the Valuation Office Agency (VOA) cost guide will provide a basis, however, allowances in addition to the normally agreed generic allowances may be necessary at “Stage 1 or 2” for buildings on the following grounds: -
i) Listed buildings - development restrictions, higher upkeep costs etc.
ii) Accommodation problems/constraints caused by statutory or operational requirements.
iii) Physical constraints.
iv) Building in advance of requirements.
v) Additional development affecting utilisation of existing space.
vi) Functional Obsolescence
The basis to be adopted is estimated replacement cost as at the antecedent valuation date. The costs will require adjustment for any age related disability or functional disability. Any allowances should take account of any refurbishment or updating that has taken place.
The basis to be adopted is estimated replacement cost as at the antecedent valuation date as set out in the relevant Practice Note or where appropriate, the modern equivalent.
The cost to be adopted will be based upon the Pavement Classification Number (PCN) published in the edition of the Airpilot or Pooleys, as is appropriate, current at the valuation date. Alternatively consideration will be given to any documentary evidence produced on behalf of the occupier as to the actual specification or any modern equivalent but in this respect regard will also be had to the types of aircraft using the runway and their requirements as regards PCNs. Any modern equivalent must be able to embrace the existing functionality and the operational business model as at the AVD and it should not be seen as an opportunity to adopt a different model where it suits.
The costs should be adjusted to take account of any age related disabilities, however, regard should be had to the fact that licensed pavements are regularly resurfaced to Civil Aviation Authority (CAA) standards, therefore a maximum age related allowance of 6% is appropriate for such pavements. The scale is shown in the relevant Practice Note. Any problems associated with a failure by the operator to repair will be disregarded in accordance with the Rating (Valuation) Act 1999 provisions. Allowances may also be appropriate for excessive strength, widths and lengths caused by historic reasons or environmental or operational restraints.
Taxiways / Aprons
Similar levels of costing and allowances to runways will be applicable (unless evidence is adduced as to lower specifications for these items) but account should be taken of any disabilities arising because of shape/operational restrictions. It may be appropriate to make an addition to reflect blast screens or hydrants (where not separately assessed).
Multi storey car parks should be included in the airport assessment unless they are leased out. They should be included within the contractor’s basis valuation on their effective capital value.
Surface car parks should be included in the airport assessment where they are operated on behalf of the airport under a concession type agreement, but separately assessed if they are occupied under a lease or licence. Where car parking spaces are included in the lease of separately let accommodation then the spaces should be excluded from the airport valuation.
Should a car park be separated from the airport by a public highway and hence not contiguous it will be necessary to take guidance from the leading case Woolway (VO) v Mazars  Supreme Court - RA 373 – in establishing the unit of assessment and whether the car park is functionally essential to the airport.
Those roads which lie within the airport’s boundary, which are not public highways and the ownership of which is vested in the airport authority, are to be included in the contractor’s basis valuation at their estimated replacement cost. Estate roads wholly serving separately assessed hereditaments should be excluded.
Those advertising rights external to the terminals, which are not reflected in the site value of the terminal, should be valued separately and added onto the end of the valuation if not separately assessed.
Petrol filling stations, etc
These would normally fall to be separately assessed. However, if they are included in the main valuation their value should be calculated on a comparative basis with other similar separately assessed hereditaments and added on at the end of the valuation.
These would normally fall to be assessed as part of the main airport assessment. However some may be separately assessed. The tanks associated with this class of plant and machinery are rateable under Class 4 Table 4 if they are over the requisite size – 400 cu m – or if less than 400 cu m they may still be rateable if they are not readily capable of being moved without substantial demolition of the surrounding structure.
However the plant and machinery may also be rateable under the following classes:
Class 1 and Class 2 Accessories (1) storage of fuel for the generation of power [unlikely for an airport] and (2) (v) as an accessory to a Class 1 or 2 item such as pipes and controls.
Class 2 (f) Protection from hazards (normally for the storage of fire water).
Class 4 Table 4.
The tanks would normally take the form of horizontal cigar shape or a vertical cylinder. They can be found in a single location or in a tank farm above the ground. Usually the horizontal tanks would be fitted with metal supports [saddles] or in a frame of steel. The vertical tanks are similar to the horizontal tanks but whereas the horizontal tanks are laid on cradles or structural steelwork most vertical tanks sit on their own foundations. They may be found in a single location or on a tank farm. The tanks may be supported by a skirt and any catwalks platforms and foundations would be valued as an extra. The tanks are usually made of welded/bolted mild steel.
The VO Cost Guide should be consulted for details and guidance. See references 215G01 to 215G08; 215E01 to 215E08; 215G51 to 215G58; 215E010 to 215E012.
Fees and location factors
The costs to be adopted in the contractor’s basis valuation are exclusive of fees and adjusted to a location factor of 1. These costs will therefore need to be adjusted by the appropriate location factor and for fees, on the basis recommended in the VOA Cost Guide. The fee level to be adopted should be based upon the general level of fees. This reflects the fact that whilst higher fees would normally be expected on terminal buildings, concrete would normally have lower levels of fees.
Size of contract allowance
The VOA cost guide is based on a notional contract size and all airport costs will be similarly adjusted. Therefore it is appropriate that the costs adopted should have a size of contract allowance applied to them where they vary from this base. The adjustment will be based on the total estimated replacement cost for the airport.
Application of the contractors basis
Stage 1 - estimated replacement cost (ERC)
The basis of measurement will be GIA as defined by the VOA / RICS Code of Measuring Practice. The measured area will include areas of common use where parts are let out. All paved areas should be included separately, according to construction specification. Roads and fences should be recorded and valued as part of the setting. Lighting of pavements will normally be included in pavement costs and adjustments should be made where lighting does not exist.
As referred to above [see the paragraph on buildings] the modern equivalent may be considered rather than costing of the actual. It may be shown by evidence that certain buildings are either over-specified or too large for the number of AVD passengers and this surplus space or capacity is otherwise known as surplusage. However a facility should not be considered surplus simply because it is used relatively infrequently, if it is necessary for the business operated at the airport. It is the peak time capacity that must be valued otherwise the airport could not function at those peaks. Surplusage should also be resisted where the item to be costed could not be reduced in size, whether it is used once or a multitude of times – i.e. runways.
Also it is the actual AVD business that is too be costed - not a variation of the business that would require fewer facilities. In the decision of British Car Auctions Ltd t/a Blackbushe Airport Ltd v Hazel 2014, the Lands Chamber stated:
“It is important that the modern substitute chosen must reflect the use of the hereditament that has to be valued. The modern substitute chosen should be able to do the same basic job that the actual hereditament does. The choice of a modern substitute is not the opportunity to adopt a new business model”
For all costs guidance will be given in the Cost Guide. Costs of some specialist elements of airports, normally only applicable to Category A and the larger Category B airports are produced by the VOA Quantity Surveyors. These appear in the VOA Cost Guide and relevant Practice Note and relate to major terminal buildings, specialist fire stations, control towers and pavements used by heavy commercial aircraft.
Where there are rateable airport facilities not listed specifically in the Cost the nearest relevant item should be selected from the Cost Guide and adjusted as appropriate.
On minor airports, runways will vary in specification from flattened out areas of grassland - the grass of which is kept short by regular mowing - to specially prepared and stabilised strips, often with the inclusion of some aggregate to assist drainage and stability. The generic contractor’s spreadsheet should be used and adjustments will be made for location factor, contract size and the addition for fees automatically, once set.
Stage II – adjustments to ERC
Age and obsolescence allowances
Age related allowances are generally applicable and based upon those determined by the Lands Tribunal in the case of Monsanto v Farris (VO) 1998. These have been modified for each subsequent list and recent settlements following litigation. However the particular circumstances of civil airport maintenance, in order to preserve operational licences, means that the normal generic allowances are not applicable with regard to pavements including runways.
Allowances on runways and other pavements take into account the duty of airport operators imposed by the CAA as a condition of the licensing of the airport. This duty is to maintain the operational pavements (runways, taxi-ways and aprons) in a good state of repair, with regular resurfacing dependent on usage. Pavements, other than through fair wear and tear, do not deteriorate with age at the same rate as buildings. A maximum allowance of 6% should therefore be made for age/obsolescence in respect of operational pavements, unless the airport is unlicensed and used for private purposes only.
In the case of Orb Electrical Steels v Webb (VO) settled by consent, the Valuation Officer accepted that the allowances for age and obsolescence, underpinned by those formulated in Monsanto, could be extended. This was only within the restricted circumstances at Orb [or very similar hereditaments] to take into account the nature of some buildings which had not been refurbished since the 1930s. It is not considered that any general extension of the existing age and obsolescence scales should be considered for airport hereditaments as a direct result of this settlement.
Other disabilities, such as poor or inappropriate design which may be manifest in the form of impaired functionality or by being technologically outmoded, may be taken account of by an allowance for functional and or technical obsolescence as guided by Monsanto.
If a modern equivalent has been costed at Stage 1, care needs to be taken not to duplicate allowances at Stage 2.
Stage III - land cost
The objective is to include a land cost for the total land area of the airport and if evidence of site value for a new or extended airport exists, this should be used, analysed on an overall acreage basis. Evidence should be notified to the NSU Airport class facilitator
Normally such evidence does not exist and recourse must be had to local evidence of the nearest equivalent land use even though these may not be, strictly, within the same mode of category of use. For the Category A airports, a formula has been agreed in the past with the airport users to standardise the approach to site valuation, by dividing the airport into 4 separate site valuation zones. These are: -
1) The terminal building// site, measured as total floor area of the terminal building within the main airport assessment. The land value applied will depend on the commercial activity of the airport. The major airports fall into 3 groups:
Major Airports (over 10 m AVD passengers) - Value equates to appropriate peak commercial land value.
Regional Airports - (5-10m AVD passengers) - The value relates to those sites associated with food retail. (This includes small international airports).
Smaller Regional Airports (under 5m AVD passengers) - Non-food Retail land value or higher value industrial land.
The value adopted will be on a double footprint basis to reflect the multi-floor and high value nature of the building
The justification for adopting this high land value is that the Contractor’s Basis, should reflect the very high income capacity of retail and Duty Free outlets within terminal buildings. The terminal buildings function as an interface between the land and air sides of the airport and in both parts the passengers invariably have time on their hands and money to spend. Retail land values will therefore be appropriate where airports reflect the commercial value of the concession occupations. On the other hand retail values would be inappropriate in those rare instances where duty free and other shopping facilities do not exist.
2) Other buildings, including the terminals for smaller airports, at a site value for the double footprint of the buildings equivalent to warehouses/industrial land values. In judgement of these values the nearest appropriate comparables (in planning terms) to the airport will be chosen. Only buildings, or part buildings, within the occupation or control of the operator are included here.
1) Surfaced land areas, including runways (if surfaced), roads, car parks, aprons and taxi-ways, will be valued by reference to site values for open storage or car parking land in th vicinity. In default of evidence, normally 25% of the industrial/warehouse value is adopted for the major airports, and from 5% to 15% for minor airports.
4) All other land within the airport boundary, excluding let-out areas, should be valued at prevailing agricultural values. Remote or green-belt locations should not be taken at a lower site value on the assumption that planning consent would not be available for alternative user, because it is the value of the site for airport use for which consent exists or has been established, which is required for the valuation exercise. The comparison with other uses is merely a means to the end of arriving at the overall airport site value.
In view of the fact that a high proportion of airport land is unencumbered with buildings and consequently there is very low site coverage by the buildings, it is not appropriate for allowances derived from the Imperial College v Ebdon (VO) case to be applied. This approach was confirmed in the 1990 list decision by the Valuation Tribunal on Bristol Airport and also British Car Auctions Ltd (t/a Blackbushe Airport Ltd v Hazell (VO) UT(LT) 2014
As a cross check the overall price per hectare produced by the above should be considered.
Where agricultural land in the ownership of the Airport Operator lies outside the curtilage of the airport and is occupied exclusively or principally for agricultural purposes, consideration should be given to its exemption following normal rating principles.
In the case of many remote airfields, comparison should be made of the results following strictly the above approach with that of applying an overall ‘agricultural plus’ basis and make a judgement in the light of all the circumstances.
Stage IV – de-capitalisation
The statutorily determined rate should be applied here.
Stage V - end allowances or adjustments
At this stage, allowance should be made for disabilities affecting the rental value of the airport as a whole and not accounted for elsewhere.
It will be appropriate at this stage to make comparison with the RVs of similar airports. Airports can be compared on volume of business, turnover, passenger or aircraft movement numbers to assess the relationship between RV and value to the occupier. Any allowances given should however be related to identifiable disabilities which give rise to the under- performance. If such disabilities do not exist, the under- performance may be attributable to other factors, not related to the value of land and buildings for which an allowance would not be appropriate.
It should also be noted that Stage 5 should not be used to circumvent the fixed nature of the Stage 4 Statutory De-capitalisation Rate. In Allen v English Sports Council 2009 the Tribunal commented upon the factors in a contractor’s basis valuation that are to taken into account in the prescribed de-capitalisation rate. The Tribunal said it ‘was matters bearing on the amount that the tenant would be prepared to pay’. In the circumstances they rejected the appellant’s case on grant at this or at any other stage.
Work load units
A useful comparative tool is the use of work load units (WLU). These are arrived at by taking the passenger numbers and converting them to their equivalent freight tonnage and adding the actual freight tonnage to this figure. Workload units are calculated on the basis that 1 passenger plus baggage = 200lb. The passenger numbers are converted into freight tonnage by dividing the number by 11. The actual freight tonnage is then added to this figure. The use of WLUs as an industry indicator of performance appears to have lost favour in recent years, but it still remains a good method of testing airport performance for rating purposes in that it combines passenger and freight performance into a single figure.
Disabilities frequently encountered include:
Flying restrictions, limiting the duration of operational hours, or the nature of aircraft using the airport. This is frequently related to proximity of housing.
Remote location, or distance from population centres, reducing demand for passenger flights or club membership.
Access problems, including poor local road network, poor signage, distance from motorways etc.
Competition from larger local airports.
Generally poor layout, design etc, not reflected at stage II.
Abnormally high maintenance costs.
Infrastructure provided in advance of requirement
Infrastructure external to the hereditament not provided to service the airport
Valuation approach for categories C - E
This section arises out of past discussions between the VOA and representatives of the British Gliding Association (BGA) and will be of assistance when discussing proposals / appeals. This guidance includes reference to helipads and heliports
The key purpose of this review is to achieve consistency of approach to the valuation of these hereditaments. This note aims to guide the caseworker in establishing the facts and evidence to allow the right valuation judgements to be made. This hopefully will lead to a valuation which is not only realistic in terms of the level of activity at the hereditament, but is in line with the rateable values of similar hereditaments.
As described in Rating Manual section 6 part 3: Section 250, only those parts of the hereditament under the occupation or paramount control of the airstrip / helipad / heliport operator will be included in the assessment. Normal rating principles will be applied in determining paramount control.
The basis of valuation
Following discussions with industry representatives and further research, it has become apparent that the contractor’s basis of valuation will provide the most consistent outcomes. The rental evidence largely refers to the land only on which the airstrip sits and consequently it is necessary to value the land and buildings and other features by other means. Rather than having a complex hybrid valuation methodology for which there is little or no legal authority, it is considered the best method would be to use the contractor’s basis.
Adjustments and allowances for the contractor’s element
There are five principal ways in which the contractor’s basis of valuation can be adjusted to reflect the situations prevailing at airstrips, gliding clubs and similar hereditaments. They are:-
a. Value only those parts of the airfield / helipad / heliport appropriate to the operation being carried out;
b. Omit those parts totally redundant or surplus to requirements, or in excess of the required operations at the airstrip/ helipad / heliport;
c. At stage 2, reflect by allowances the disabilities which may exist in the items valued at stage 1;
d. Value an appropriate area of land at an appropriate value in the light of the facts;
e. Make allowance at stage 5 for those disabilities not taken account of in stages 1-4
These are to be added to the value of the land:
Surfaced runways / helipads and heliports
The runway, particularly if surfaced, is normally the most costly part of an airfield or strip, especially in the case of a small airfield. Careful consideration will need to be given in circumstances where, for historical reasons it may be that rural airfields have runways vastly in excess of what is now required (e.g. wartime and ex-MOD airfields). The value arising from such a runway may be substantial and it is for the valuer to consider whether the additional value is justifiable. In many cases VOs should consider the substitute approach, valuing what is reasonably required by the operator, rather than the actual runway. As a guide:
A runway of maximum 1000 x 30 m [30,000 sq m] should be considered to be the norm for a gliding site, but some are less, in which event the smaller area would be valued (reference to Pooley’s Flight Guide may be of assistance here and further advice may be sought from one of the specialist airport valuers ).
The minimum for a helipad is likely to be in the order of 38m x16 m and some may be significantly larger resembling short air strips [235m x 32m].
Helipads and heliports within this category consist of stand-alone hereditaments which are not subordinate parts of larger hereditaments, such as a race course or hotel, which are Category E. Stand-alone Heliports and Helipads should be identified from Pooley’s Guide and confirmed by site inspections.
Once identified, the NDR Unit should notify NSU, of stand-alone Heliports and Helipads so they can be added to the list included in the Practice Note.
The basis of valuation will be the contractor’s basis and the helipad will attract costs and allowances in line with those for concrete aprons and other similar features to be found on airports. See the tables of costs and allowances in the Practice Note for the appropriate list.
At some sites ground stabilisation and drainage will have taken place to improve the durability of the runway. This may take the form of tar-spraying or earth consolidation using a mixture with cement. A surface coating may then be applied. Drainage, if present, may either be by mole-drainage or trenched tile drainage, or ideally a combination of the two. The valuation of grass runways will therefore depend on the nature of the surface, and costs will vary from £0.72 p s m for simple levelling, rolling and mowing to £2.16 p s m for drained and stabilised runway surfaces.
As a guide, a runway of 1000 x 30 m [30,000 sq m] would be considered to be the maximum at a gliding site, but some are less, in which event the smaller area would be valued.
Where taxiways are valued or relevant to the airstrip in question, substitute widths of 10m - 15m will normally provide sufficient width. Costs will depend on the specification and will follow the guidance above or VOA Cost Guide rates. (Pooley’s flight guide may be of assistance here and further advice may be sought from one of the specialist airport valuers.)
Aprons should be included to the extent that they form an operational purpose and would be included in a substitute hereditament. Evidence of actual use should be sufficient. Costs will depend on the specification and will follow the guidance above or VOA Cost Guide rates. (Particular care should be taken when costing aprons and stands to adopt the correct PCN)
Roads, particularly airside, are often surplus to requirements. Actual use may only take place through convenience rather than necessity and consideration should be given to the minimum necessary layout to provide reasonable access to pavements, particularly for fire vehicles, without undue inconvenience. Costs will depend on specification - e.g. curbs, lighting etc, and will follow VOA Cost Guide rates.
Normally buildings forming part of the hereditament will be included in their entirety at stage I, although building that are totally disused or redundant at the AVD should be omitted. The nature of the airstrip operation and the likely provision in a substitute hereditament should be considered. Surpluses may occur in area, or height and where this is a factor in the costing or values used, appropriate allowances may be given. The general principle should however be observed that if a facility is essential for the operation, even only for a relatively small proportion of the time, it will probably not be surplus to any extent. This may well occur in buildings, which although of appropriate size, may have an outdated design or facilities not compatible with modern operations, warranting a separate allowance. Normally hangar type buildings will be valued having regard to the cost of equivalent agricultural buildings rather than the more sophisticated hangars found on commercial airfields
Fees to be adopted at a rate of 9%. It will be necessary to override the default % on the NBS spreadsheet and enter 9% manually. The RICS / BCIS Indices will be used for location factor adjustments.
The total area of the airstrip should exclude areas beyond what might be regarded as necessary for operational requirements and may be present only for historic reasons. A realistic approach should be taken based upon a ring fence around all facilities and including intervening grass areas which would normally be required in any substitute hereditament.
It is agreed with the BGA that the whole site will be valued on the basis of the land being at the prevailing bare agricultural land value in the locality but having regard to the circumstances and character of the particular site.
As a guide the site area of no more than 30 hectares would be appropriate. Guidance as to the agricultural value to be adopted can be obtained by reference the relevant Practice Note in respect of land values (hyperlink).
The lump sum cost additions for Septic Tank Drainage; Mains Electricity; Mains Water and any End Additions are to be found in the VO PN for these classes.
There may be other features on the airfield site which merit an addition. These are likely to be limited to such features as caravan pitches and in these circumstances it is agreed that an addition should be made having regard to the local tone.
Disabilities and end allowances
The purpose of occupation of the airstrip will be a relevant consideration, whether for club, private or social use. The end allowance will have regard to whether the actual occupiers are likely to be the only potential tenants, whether profitability would be the primary objective of the hypothetical tenant at a particular site It is not feasible to give guidance on individual allowances for all factors of stage 5 or other end allowances, since each will depend on it merits.
Consideration may also be given, to the possibility of agricultural exemption where the airstrip is occupied with an agricultural property, for which the normal principles of the exemption will apply.
It should be noted that, particularly in the case of minor and privately owned airports and airstrips, the Contractor’s Basis may produce an apparently high rateable value at Stage IV. There should be an objective review of Stage V allowances, requiring a knowledge of the circumstances of the operation of the airport, to ensure that the rateable value is compatible with the level of activity of which the airport is capable. Close co-ordination by NSU and NDR Unit Specialists is important at this stage.
The BGA has put forward the following grounds for Stage 5 Allowances. Any allowances under these heads have not been quantified but the totality of allowances should only exceed 10% in exceptional circumstances
The following list shows the end allowances that may be applicable at many gliding clubs, but this should not be considered as a comprehensive list:
a. Airspace Restrictions – Airspace restrictions are defined as statutory air space restrictions imposed by the CAA, restrictions arising from the Air Navigation Orders, restrictions arising from neighbours, and air safety requirements. At their most severe these restrictions will limit the times and duration of airfield operations, including limitations on the circuits that can be flown. A medium restriction would be where local air traffic routes limit operations in the immediate vicinity of the site (e.g. within 5 nautical miles), or where it is necessary to have a local operational agreement with a local airport/airfield operator. At the lower end of the scale would be airspace restricting area navigational access to a site or physical restrictions caused by objects such as wind turbines.
b. Access Restrictions – Gliding site are often remote to public access roads and/or have restrictions imposed by third parties. Gliding Clubs rely on adequate public access, so such restrictions can limit/restrict club viability. The severity of such restrictions is site specific and should not require any specialist knowledge to evaluate. At the severe level access might be over unmade roads owned by third parties with restrictions on access. Sites remote from public highways might be at a medium level.
c. Non Exclusive Site Use – Many if not most gliding sites have a shared use, most commonly a dual agricultural use. For example many clubs share their sites with grazing animals requiring the herding of animals prior to and post flying, with the attendant problems of animal faeces. This restricts hours of operation and increases costs. At its most severe the site is in effect in agricultural use with gliding being a secondary use. Here the hours of operation in each type of use may be the best indication of the severity of this restriction. The restrictions in this category are caused by consecutive use as distinguished from (d) below where the issue is concurrent use.
d. Multiple Site Use - Gliding Clubs rarely have sole use of an airfield and its environs and have to operate in parallel with other commercial/sports organisations. Adjacent land may have agricultural or commercial use that restricts gliding operations. For example farming on adjacent (and often open unfenced land), mean that winching operations have to be curtailed or cease; as the risk of dropping cables on farm machinery and personnel is too high. Such restrictions are usually periodic (harvesting etc.). Similarly many clubs have adjacent commercial operations and traffic which restrict operations. At its most severe a club might have to permanently limit the area useable for flying operations, or cease operations in certain wind directions. Again the degree and period of restriction should be used to categorise the severity of the restriction.
e. Public Rights of Way - Many gliding clubs are in National Parks, AONBs, or similar attractive areas desirable to tourists, ramblers etc. The statutory rights to roam and/or public footpaths adjacent to, or across an airfield cause significant operational restrictions. These may require the operation of safety procedures restricting frequency of flights and may vary according to wind direction. Such restrictions should be able to be measured subjectively in relation to the duration of restrictions, or the effect on flight frequency.
f. Planning Restrictions - Many gliding sites have planning restrictions that limit air navigational use. These restrictions may cover timing, frequency and/or the type of air navigational operations that are allowed.
g. Statutory Restrictions - Many gliding clubs occupy sites formally owned or partially owned by a statutory authority (usually the MOD). In most cases the authority limits the use of land that is in, or was in its ownership.
The effect of restrictions such as those above may have a parallel or cumulative effect on the operations of a club. While it is recognised that end allowances are by their nature subjective, there needs to be some form of objective framework that provides a consistency of approach and valuation. Typically we would suggest that a club that has multiple limitations of a medium to severe level be allocated the highest end allowances.
Practice note 1: revaluation 2017
1. Market appraisal
General aviation (GA)
GA is a diverse sector, at one end of the spectrum are high value business aircraft; at the other end paragliders and hang gliders. GA also serves many purposes, including business usage, sports and recreational activities, and as a means of personal transport.
Although often presented as a sector in decline, it is considered that many parts of GA are growing strongly, in particular the business aviation market and the smaller end of the market (such as microlights and helicopters). GA flying hours has probably reduced as fuel and other costs have increased but airfield income derives from estate income, fuel sales, parking, hangarage, and landing fees. In respect of landing fees, those for general light aviation remain modest, typically at around £15 - £20.
According to Wikipedia, of the 21,000 civil aircraft registered in the UK in 2010, 96 per cent are engaged in GA operations, and annually the GA fleet accounts for between 1.25 and 1.35 million hours flown. The single most common class of aircraft is the fixed-wing light aircraft associated with traditional GA, but the main area of growth over the last 20 years has been in the use of more affordable aircraft, such as microlights, and small helicopters. There are 28,000 Private Pilot License holders, and 10,000 certified glider pilots. Some of the 19,000 pilots who hold professional licences are also engaged in GA activities. Although GA operates from more than 1,800 aerodromes and landing sites, ranging in size from large regional airports to farm strips, over 80 per cent of GA activity is conducted at 134 of the larger aerodromes as identified on the website of NATS Aeronautical Information Service.
Overall, GA is facing increased difficulty in accessing infrastructure, both airspace and airfields. Increases in controlled airspace can limit the GA sector’s freedom to fly where it chooses. Some increase in controlled airspace is inevitable in order to accommodate a greater density of traffic safely within the airspace system, and the economic value of commercial air transport (CAT) and the associated public benefit make it desirable that CAT operations be facilitated.
At some airports the growth of CAT has reduced GAs access to both slots and parking facilities. At these airports GA has often been squeezed out through increases in the prices charged for landing, parking and handling. GA aircraft can generally still make use of these airports, but it is more expensive than in the past, and many airports may now find it less economically worthwhile for them to accommodate GA operations.
The operation of the planning regime also affects GA’s access to airfields, as decisions can lead to closures of airfields, or conditions being imposed on their operation. The closure of some airfields has resulted from the financial benefits of redeveloping substantial sites. The period 2010 - 2015 has seen the closure of both Plymouth City Airport and Manston Airport for potential redevelopment, whilst Bembridge Isle of Wight closed for personal reasons.
It is difficult to provide an accurate overall picture of GA movements. The CAA reports movements at about 60 airfields, and differentiates between GA and CAT movements. It has also recently started to collect data at a few of the smaller GA airfields. However, there is no comprehensive database of GA movements at other airfields.
The Civil Aviation Authority provides useful statistics regarding 60 of the UK’s busiest airports. These statistics show that from a high of 2.3 million aircraft movements in 2008, the movements fell to just over 2 million in 2009 but have since recovered to 2.1 million in 2014. Passenger numbers however have increased from 235 million in 2008 up to 241 million by 2014. In 2014 Blackpool Airport went into receivership and Manston airport was controversially closed and is now subject to a campaign to reopen it. Meanwhile both Newquay and Southend Airports have been subject to substantial infrastructural improvement. Lydd (London Ashford) Airport has obtained consent to redevelop its infrastructure including the lengthening of its single runway.
The ongoing discussions regarding the need to provide additional capacity in the South-East rumbles on, despite the recommendation by the airports commission for a third runway at Heathrow in July 2015, with both Gatwick and Heathrow vying for the opportunity to add a further runway to their infrastructure. All the more surprising therefore that Manston has been closed (although the circumstances of its closure suggest that this was more to do with the greater financial returns to be obtained from its redevelopment). The substantial increase in passenger numbers at both Luton and Stansted is due to the positioning of cheap airlines at each airport, particularly serving Eastern Europe from where passenger numbers have increased substantially [however figures at Stansted have fallen slightly in the most recent years] Southend’s redevelopment and its use as a base by Easyjet saw it achieve 1 million passengers in its first year of operation. Indications are that growth will continue helped by a favourable exchange rate making the UK a good value destination for tourists worldwide.
2. Changes from the last practice note
There are no major changes from the 2010 approach. However a new band has been added to the airport categories table shown below to take account of ‘International Small ‘airports.
3. Ratepayer discussions
Since 1990 there has been a major (Category A) airport user group. This includes NSU specialist valuers, representation from the Scottish Assessor Association (SAA), in-house airport surveyors and private practice surveyors. Though the agreement has no binding force, the agreement has been followed in almost all cases since 1990 and established a basis of valuation for this class. For 2017 the major airport user group has met on two occasions, and though no agreement has been reached to date, it is hoped agreement will be reached in the near future.
It is also hoped discussions can be widened to include separate talks with representatives of the Minor Airport operators if they so wish.
4. Valuation scheme
The valuation basis is that of the contractor’s basis and the rating manual entry should be consulted for guidance on this.
For the avoidance of doubt location factors and contract size adjustments are applicable in addition to the costs itemised in the tables below. Part 1 covers civil airports and Part 2 covers the valuation of airstrips gliding clubs and other similar hereditaments.
The costs shown in this section are for ease of reference. In all cases where a cost guide code is shown that must be input into the NBS template, not the costs shown here. Where the cost guide code shows options, the costs shown in this practice note should be used to aid selection. Should the cost guide show differing costs to those shown in a current version of this practice note, please refer to the CCT.
Practice note 1: revaluation 2017 cost guide
Category: Airports Item: Terminal Buildings: Variations: For all categories the costs below should be adjusted to reflect the variations in construction and finish.
Description notes: Due to the continual alterations, extensions, refitting and upgrading of facilities and services encountered in this class the properties listed in the bands are indicative only. Rates adopted should be interpolated, if necessary, between the bands according to service provision and the level and quality of finishes.
Airport terminal costs
|70500A||Band 1. Major Internationals Multi-storey buildings, steel/concrete clad frame, high standards of fittings and finishes, elaborate services for ventilation, heating, transportation, VIP and CIP suites etc||To be advised £/m2|
|70500F||Band 2. Internationals Modern steel/concrete frame, external cladding and glazing to high quality specification, good quality internal fittings and finishes, good quality ventilation, heating and some transportation, limited VIP and CIP suites etc.||To be advised £/m2|
|70500K||Band 3. Regional Large Modern steel/concrete frame, external cladding and glazing to high quality specification, good quality internal fittings and finishes, good quality ventilation, heating and some transportation, limited VIP and CIP suites etc and smaller than Band 2||To be advised £/m2|
|70500P||Band 4. Regional Medium Extended buildings over a long period. Continual improvements. Many differing types of constructions, less extensive provision of fittings and fixtures.||To be advised £/m2|
|70500U||Band 5 Regional Small Modern steel framed. Brickwork, glazing and insulated metal cladding roof and walls good quality but economical fittings and finishes.||To be advised £/m2|
Airport pavement costs
The costs include for excavations and disposal of surplus materials arising from the excavations being disposed on site. Pavement construction comprises imported limestone fill, lean mix concrete sub base and slip form paved pavement quality concrete and associated drainage and AGL ducting.
Airports - item: other buildings
|Cost guide code||PCN Rate||£ / m2||Cost guide Code||PCN||Rate £ / m2||Cost guide Code||PCN||Rate £ / m2|
|Fire Stations/Crash And Rescue|
|70500Z||Modern 1990s style buildings incorporating 4 bay tender/crash vehicle stands with front opening doors, vehicle exhaust system for engine warm up, stores, crew accommodation including offices, kitchen/mess rooms, locker rooms, showers and wash room, communications centre.|
|Visual Control Room|
|70510A||Modern 1990s style. Visual control room with 360 (vision), sloping windows, with small bars for maximum vision to all sides of the airport, balcony external and access by vertical ladder or stairs from fire station or other building below.|