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

Section 550b: non-traditional shops

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

1. Scope

1.1 This section applies to large retail units such as those occupied by IKEA. These units are relatively few in number and will be co-ordinated by the specialist teams with reference to the CCT panels. This instruction has been prepared with a view of providing background information to staff in the network and those that may be involved with taking on any such stores.

2. List Description and Special Category Code

List description: Large Shop and Premises

SCAT code: 155

Suffix: S

Primary Description Code: CS

3. Responsible Teams

3.1 This is a Specialist class of property and responsibility for the survey and valuation of the class lies with the specialist referencers and valuers. It may be necessary to consult with an expert in another Unit if there is limited knowledge within the Unit.

4. Co-Ordination

4.1 The retail class co-ordination team (CCT) has overall responsibility for the co-ordination of this class. The team are responsible for the approach to and accuracy and consistency of these valuations. Given the small number of stores and their high values it is important that the CCT panels are made aware of any new stores or extensions to them to ensure a consistent approach.

4.2 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

5.1 None specific however planning policy in recent years has been against out of town development which is where traditionally these stores have been located. This has led to the appearance on more restricted sites in locations such as Coventry and Southampton.

6. Survey Requirements

6.1 Inspections should be carried out in accordance with the Valuation Office Agency Code of Practice.

6.2 These stores should be measured to Gross Internal Area (GIA) for rating purposes in accordance with the RICS Code of Measuring Practice 6th edition or its replacement. Gross Internal Area (GIA) - Measurement definitions - isurv

6.3 An inspection checklist is appended to the Practice Note (Appendix 1) and should be completed for all new properties and updated for maintenance work and stored in the property folder of the Electronic Document Records Management (EDRM) system.

6.4 The Survey Template can be found in EDRM. This will need to be completed as part of the inspection process. The checklist at Appendix 1 identifies the information that will need to be gathered in order to properly complete the survey.

6.5 The survey data should clearly indicate the floor level, use (showroom or sales), with an indication of where the travelator/ escalators/ lifts are situated. Floor to ceiling height should be recorded as should any height variation within these areas. The Showroom height will be lower than the stores/ self select areas, although there may be false ceilings.

6.6 Newer stores will have computer controlled dark stores which cannot normally be accessed by the public - these areas again need to be identified together with information of the racking/ tracking system and the capacity. 6.7 The provision of car parking/ vehicle collection points and movement around the sites should be noted.

6.8 Access to/ from the site and filtering of customer/ deliveries is an important consideration.

6.9 Accommodation Use, Other Addition and Adjustment Codes

The main codes to be used for these stores are summarised below:

TFA - Total Floor Area

In certain circumstances it may be appropriate to use

PLT - Plant room and

WHS - Warehouse

6.10 Air Conditioning

Air conditioning will be reflected in the main space rate applied.

6.11 Plant and Machinery

Details of any items of Plant and Machinery present should be noted and identified on the survey. Air Conditioning; CCTV cameras; fire protection systems; sprinklers etc found on inspection should be accurately recorded.

6.12 The value of these items will be reflected in the main rate per m² in a similar way to large shops.

6.13 In addition any Plant and Machinery in the dark stores should be recorded on the survey

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

6.15 Fitting out

Fitting out is reflected in the main space rate adopted. 6.16 No differentiation in value is made between levels of fit out within the property. One overall retail rate is applied throughout the store for all accommodation, be it retail, offices, stores or plant rooms, on the same floor level.

7. Survey Capture

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

8. Valuation Approach

8.1 The rental method is the principal method of valuation to be adopted and has been accepted previously. However, all the stores are believed to be owner occupied. Occasionally some ancillary accommodation close by may be rented but this is of limited weighting.

9. Valuation Support

  • Rating Support Application (RSA)
  • Class Coordination team for Large non-food shops
  • National Specialist Unit

Appendix 1 - non-traditional “IKEA” type shops Inspection Checklist

Non-traditional "IKEA" type shop INSPECTION CHECKLIST (GIA) Inspections should be carried out in accordance with the Valuation Office Agency Code of Practice.
Address
Location Identify type of locality and the access to the site and accessibility from the main road network
Size Identify separately: Size of the showrooms Size of the warehouse area (incl. checkouts and packing areas) Provision of car parking NB. For new build stores make reference to sizes in planning application. Unit of Assessment. ATM's will need to be identified and separately assessed if they comply fully with the types outlined in the ATM Rating Manual Section. The cafe/ shop/ soft play areas are in the paramount control of IKEA and will be included in the GIA and assessment. Hand Car Washes on site (car park) may be a separate assessment. Check with IKEA management.
Transport There will be significant delivery movements every day. Whether deliveries are shared with or segregated from the customer arrivals.
Car Parking Number of car spaces, collection bays/ points and clear detail about goods delivery, expect the car parking to be free but is there any monitoring. Is the car parking below building, in a multi storey or is it all flat?
Building External Built: No. of floors
Construction
Customer access to the main building - stairs/escalators/
Delivery and Loading
Other points EA are installing photovoltaic cells on the roof in some of their stores. Record power generating potential.

continued…

Building Internal Refurbished: Fit out:
Disabilities Cramped site Traffic circulation Sloping sites
Accommodation Access from loading Dark store (robotic)
Entrance Front/ side/ rear. Visibility of entrance Walls
Floors
Ceilings Floor to ceiling heights and variations
Shape
Extraordinary features Stilted store; Heat recovery; Green issues.
Customer WCs Identify but include in GIA areas.
Lifts & Escalators Lifts: Type manual/ automatic, goods, passenger, staff/ customers, capacity, floors served. Escalators and Travelator: number, up/down, between which floors, where sited. Record ease of pedestrian movement between the relevant parts of the building.
Customer restaurant Seating numbers, location in building.
Services. Fire Precautions. Security. CCTV. No. of cameras
Air Conditioning (age) Cassette or ducted. Extent of area covered. Heating. Fuel. System
General remarks
Date of survey Survey by:

Practice note 2017 - non-traditional shops

1. Market appraisal

1.1 The model is to purpose build units for owner occupation and consequently no rental information is available.

1.2 This type of store is expanding within the UK.

2. Changes from the last practice note

2.1 There was no Practice Note for the 2010 List

3. Ratepayer discussions

3.1 There have been no 2017 list discussions with ratepayer representatives on this class of property.

4. Valuation scheme

4.1 Background

A store will be typically arranged with a reception area at entrance level where children can be dropped off at a soft play area. This will connect through to the checkouts

4.2 From the reception area, the customer is led on a predetermined route starting with the sales floor(s) and ending up in the self service warehouse and checkout point. There will be at some point a customer restaurant.

4.3 Beyond the checkout area there will be a fast food outlet, food shop and a returns/ packing area.

4.4 The first generation of stores were one or two-storey and built on the edge of towns with large car parking areas. The later generation of stores have been built in town on smaller Brownfield sites, which has meant the stores have needed to use multi-floors.

4.5 These multi-floored stores create two problems:

  • Customer circulation. More space is dedicated to lifts/ travelator

  • Stock movement. Larger capacity lifts are required which have been known to break down

4.6 Valuation

The general approach is to value the GIA of the property applying an overall rate to the total main floor space, usually but not always the GF, with a factor applied to the ancillary floors to reflect quality. Generally, the principal ancillary floor is taken at 75% of the main rate. Ancillary floors may be valued at 50%. Some separate ancillary buildings may be valued at lower rates. The existing valuation scales have been set to floor factor 1.00 and it is necessary to overtype in RSA as a survey line adjustment.

4.7 The main rate is added to the appropriate address based matrix. It reflects the age, character and location of the particular store, and its trading potential. Quantum, layout disabilities (such as being stilted), and car parking are reflected in the overall rate adopted. There should be no need for an end allowance to reflect any perceived disadvantage.

4.8 This Practice Note has been written with the 2010 appeals still outstanding. Once the 2010 scheme is agreed this Practice Note may need to be reviewed.