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

Section 281: computer centres

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

1. Scope

This section gives guidance on the approach to this class. For specific valuation guidance see the current practice note.

2. List description and special category code

List description : CO1, Computer Centre and Premises (although NOTE - some occupiers prefer a more “general” description that doesn’t specifically identify the property as a Computer Centre)

SCAT code : 068 (Non Purpose Built Computer Centres) and

069 (Purpose Built Computer Centres)

SCAT Suffix S.

3. Responsible teams

The valuation and referencing of this class is the responsibility of the Specialist Team within the NDR Unit

4. Co-ordination

The Specialist Industrial classes Co-ordination Team and the Industrial Valuation Panel have responsibility for this class ensuring effective co-ordination across the business units. The team are responsible for the approach to and accuracy and consistency of computer centre valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating list. Caseworkers 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

Useful to refer to the computer centre case of Leda Properties v Howells, especially when valuing a vacated data centre site.

6. Survey requirements

The basis of measurement for this class is Gross Internal Area (GIA). Reference should be made to the Code of Measuring Practice for Rating Purposes in England and Wales.

7. Survey capture

Rating surveys should be captured on the Rating Support Application (RSA). Plans and surveys should be stored in appropriate folder within the Electronic Document Records Management (EDRM) system.

8. Valuation approach

1st generation data centres may still be tied to office levels of value, but it is clear that the modern trend is to look towards industrial type construction (Large Distribution Warehouse) with significant internal adaptation / fit out to data hall requirements and standards.

The recommended approach here is to employ a “Rentals Plus” basis, taken from the prevailing Distribution Warehouse (DW) £/sqm in the locality and uplifting it. In the 2010 List (where this approach was first used), the accepted increase nationally (apart from the London / South East area) was +50% on the DW basis for the fully fitted out Data Halls. In the London / South east area (where the prevailing DW basis was higher) the accepted norm was to add a total of £20/sqm to the DW basis for fully fitted out Data Halls. This has been retained for 2017.

Fallow areas (areas within the hereditament designated for future use / expansion) should be valued appropriately, reflecting the standard of completion, fit out and demand for such accommodation with this type of hereditament.

There will be significant additions for rateable Plant and Machinery, especially within the modern Distribution Warehouse type buildings. These will include stand by generators, UPS systems, battery sets, compressors / driers / receivers, transformers (and associated electrics), tanks / bund walls and CCTV plus associated security systems.

9. Valuation support

  • Rating Support Application (RSA)

  • Survaid

  • Class Coordination Teams (CCT)

Practice note 1: 2017 - computer centres

1. Market appraisal

1st generation Computer / data centres still exist, but once they become vacant they tend to remain unoccupied and are not readily adaptable for other uses. Some sites have the appearance of office type buildings, others more industrial in appearance. The modern trend (from late 2000’s onwards) has been to acquire a Distribution Warehouse (without the usual number of loading doors) and then significantly adapt internally through fit out.

Modern Data Centre occupiers (within these adapted Distribution Warehouse buildings)also seem to want to plan for future growth and expansion, with (often significant) internal fallow areas awaiting fit out. New sites also tend to phase occupation in, sometimes over a number of years as they relocate to a purpose built facility from two or possibly three existing older locations.

All will have significant plant (both rateable and non rateable) with the modern Distribution Warehouse type facilities likely to have well secured data halls within the shell building, and often displaying an additional floor which will usually be a tenants improvement.

There are currently over 300 Computer Centres in the Rating List.

2. Changes from the last practice note

There was no 2010 list practice note for this class of property.

3. Ratepayer discussions

There have been no discussions with ratepayers.

4 . Valuation scheme

Given the diversity now in age / construction over time, it is not possible to adopt a single basis of valuation appropriate to the class as a whole. Careful consideration of the physical characteristics of the property is required in order to determine the most appropriate valuation approach.

Older / 1st generation Computer Centres should be valued in line with their previous List approach. These are likely to be adapted warehouses or offices, capable of an alternative use within rebus. The preferred method here will be a rentals approach based on the local tone appropriate to the alternative use.

Modern Computer Centres are most likely to be the significantly adapted Distribution warehouses. The preferred method here is a “rentals plus” approach. In all areas other than the South East, the approach should be +50% on the prevailing Distribution Warehouse tone for the locality on the fully fitted Data Halls. In the higher value South East areas, the approach should be to add a total of £20/sqm to the Distribution Warehouse tone for the locality on the fully fitted Data Halls. This mirrors the approach taken in the 2010 List.

Fallow areas (areas within the hereditament designed for future use / expansion) should be valued appropriately reflecting the standard of completion, fit out and demand for such accommodation with this type of hereditament.

The 2010 List approach in respect of air conditioning, car parking and additional land should be adopted for the 2017 List.

Rateable Plant and Machinery should be valued in accordance with the Rating Cost Guide. The addition for P/M is likely to be significant, particularly in the modern adapted Distribution warehouse type hereditaments.