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

Section 905: self storage hereditaments

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

New material added and existing material modified in April 06

1. Co-ordination

For 2005 this class has not been classified as requiring formal co-ordination. However caseworkers should be mindful of the precise valuation requirements explained below.

A Special Category Code for this class has been applied for.

2. Description

These instructions are concerned with the assessment of self storage hereditaments which will arise from modern warehouse conversions or to purpose built buildings designed to provide a wide range of secure self storage facilities.

Early self storage units were developed from standard warehouse units by the addition of extra floors and individual secure areas. Increasingly modern purpose-built centres are being constructed to a high standard with security features and strategically located. Typically, such buildings may be used for domestic and business storage both short term and for longer periods.

For the avoidance of doubt, ‘modern’ will typically be manifest as a good quality steel or reinforced concrete framed system built building with good eaves height and be less than 20 years old.

3. Survey Requirements

The basis of measurement for this class is Gross Internal Area ( GIA) as defined in the VOA Code of Measuring Practice. Where the local modern industrial tone is based on areas measured to Net Internal Area (NIA), self-storage warehouses should also be measured to NIA for valuation purposes but a GIA survey should also be prepared and retained on file.

4. Basis of Valuation

See the relevant Practice Note.

5. Valuation Considerations

These properties should properly be valued by reference to the appropriate local modern warehouse tone for their localities and basic accommodation with a variety of factors to reflect the specific nature of these hereditaments. This approach forms the basis as outlined in Practice Note 1: 2005 to this Section and the scale created specifically for this purpose.

Practice note 1: 2005 - Self storage hereditaments

1. Central Discussions

Limited central discussions with agents for the industry have taken place. Local Offices will be kept advised of developments.

It is also anticipated that for Revaluation 2005, this class is likely to be dealt with by a limited number of agents.

2. Nature of the hereditament and State of the Industry

The hereditament

The concept of self storage facilities comes largely from the USA where it has developed rapidly since the 1970s. It is lower key in this country with an estimated 350 units now in existence. However it is anticipated that this will expand as consumer awareness is increased and the market matures.

The main providers are:

Access; Big Yellow; Lok ’n’ Store; Shurgard Ltd.; Safestore Holdings Ltd. There are, however, many smaller players who may have only 1 store.

Each tend to have their own website but a better choice is probably http://www.ssauk.com/. This is the site of Self Storage Association and it includes a Site Finder facility that allows all the sites in a discrete location to be identified. However not all occupiers are members of the association. A lot of other occupiers rely on yellow pages or similar publications for ID/advertising.

The average size of the hereditament is in the order of 3000 - 3500 sq. m. and is multi floored - hence the nature of the scale. The average size of the lettable units is in the order of 7.7 sq m but sizes do vary. The average number of units per hereditament is in the order of 400-450. Some will have external units - more in the nature of lock up stores - but certainly not all.

The public awareness of these facilities is becoming more common and growth has been steady since about 1997.

Unit of assessment

The self storage provider ( Big Yellow, Shurgard and the like) is regarded as being in paramount control and consequently there will be only one unit of assessment.

The business

The expression ‘self –storage’ applies to the provision of facilities that offer DIY storage space of varying sizes to members of the public and businesses.

Rental is typically on a month by month basis for as long as is required.

Generally the customer is the only person that holds the key and can come and go as frequently as required during specified hours. Stored items are protected by a licence agreement that is provided by the Self Storage operator. Security is provided by the operator.

The majority of the purpose-built self-storage units are less than 5 years old.

The facilities usually take the form of large depots, normally prominently sited along major roads close to densely populated residential areas, retail warehousing and light industrial estates.

Flexibility is probably the key to success of the industry with contracts being as short or long as required. ( 1 month is usually the minimum ).

There is a rough 70/30 split between individuals and businesses in terms of usage.

The largest concentration of self storage units is within the M25 area but other large conurbations are picking up.

3. RSA Guidance

Survey Data - Capture

The following is intended as a best practice guide to data capture for self-storage hereditaments and follows the advice laid down in the VSA standards (3rd edn).

Code of Measuring Practice

Hereditaments should be measured to Gross Internal Area as defined in the VOA Code of Measuring Practice. Where the local modern industrial tone is based on areas measured to NIA, self-storage warehouses should also be measured to NIA for valuation purposes but a GIA survey should also be prepared and retained on file.

Warehouse units that are separate from the main building, with direct external access for customers, should be captured as main space WHS, as a separate line entry. Other types of accommodation such as reception and office areas should be captured as separate line entries using the appropriate accommodation use code, in accordance with the guidance in VSA standards. Where two or more areas of the same type of accommodation are physically contiguous, those areas should be recorded as a single line entry.

Code Default text Purpose
WHS Warehouse Main space in both main building and units with external access.
REC Reception / Entrance Reception, Entrance and Waiting areas
OFF Office Best quality office accommodation commensurate with the age and type of the hereditament, superior to ANO.
ANO Office Inferior to main office space (OFF), usually with direct access to warehouse space.
ASI Internal storage Store rooms which are not included in the main space area.
ASO External storage Store or stores with external access only. If there is internal access to main space, use ASI.
BAY Loading Bay Part of building(s) used for the transfer of goods and supplies but otherwise no different to main space. A construction allowance may be needed for an inferior open fronted loading bay or consider using CNP where it is in the nature of a canopy.
MSR Mess / Staff Room Eating area for staff use, equivalent to ANO quality.

Other accommodation use codes may be used, where the accommodation exists, provided they are not inconsistent with the type of hereditament or the floor level upon which the accommodation is situated. For full details of permitted use codes, please refer to the scale template in P:\CEO1\Standard Valuation Scales\Warehouses, and the data capture advice in Appendix 1 to VSA Standards.

Beacon characteristics

The scale assumes that the hereditament is fully heated and insulated but has neither air conditioning nor a fire protection system. Guidance on recording these characteristics can be found in the scale template referred to above. The eaves height of the hereditament should be recorded in the survey data. RSA will make no adjustment for headroom at beacon characteristic level and as the basis (arrived at following the process outlined in 4.0 below) reflects the limited headroom, no additional adjustments for headroom are required at survey unit or line entry level.

Bulk Class Indicator

All hereditaments should be captured as bulk class “W”, with the appropriate BUT code.

Sub-location code

The 2005 sub location SLFS must be created in RSA (System Support) for each Billing Authority. This code is the only sub-location that should appear in survey data for self storage warehouses. This is essential as these properties will be valued using a Type 2 (sub-location) access path to a national address matrix.

4. Valuation Guidance

Local Tone

It is imperative, for the correct functioning of the scheme, that the following is complied with.

The starting point should be the local tone, derived from rental evidence of a modern warehouse unit in a similar location with a good standard of eaves height, plot ratio etc. Having identified the valuation matrix that incorporates this tone, manually find the appropriate unit value, using the GIA of the Ground Floor of the hereditament, to determine the matrix entry point.

The resulting unit value should be discounted by 35% (Unit value from local tone x 0.65) and entered in the national address matrix along with the address of the hereditament.

The relativities within the scheme reflect the reduced potential of full occupation of the higher floors. These may remain unfitted pending increased demand.

For the avoidance of doubt, a change of use to a self-storage business within a redundant multi- floor production facility or purpose built office block will not fall to be valued under this scheme and will therefore be valued by reference to the actual rent or tone for similar buildings by reference to the scale and matrix applicable to the previous use. The appropriate local sub-location code should be used to ensure that this occurs.

Access Paths

A type 2 access path must be entered in bulk class “W”, for each BA in which a self-storage hereditament exists. Where the local modern industrial tone is based on areas measured to NIA, the path must be entered as follows:

BA Code
Subloc SLFS
Lower Age
Upper Age
Owning Site 501
Owning Site 501
Owning Site 501
Owning Site 501

Where the local modern industrial tone is based on areas measured to GIA, the path must be entered as follows:

Subloc SLFS
Lower Age Upper Age
Owning Site 501
Owning Site 501
Owning Site 501
Owning Site 501

Pattern Valuations

The first time a pattern valuation is run using either of the above scales, the pattern basis must be set to “S, S, S” to ensure that scale default factors for adjustments, other additions and car parking are used in the valuation.

Other Additions and Car Parking

Car parking is reflected in the unit value therefore the CP matrix “RCPREFLECT” will be used in all valuations. The OA table “ROASELFV1” is to be used exclusively for the valuation of this class of hereditament. As storage land is unlikely to be present, the values are set to £0.00 / m2 in the Other Additions table. Where a hereditament includes storage land that adds value, Groups should overtype the £0.00 with the local tone figure for ancillary storage land.

5.Plant and Machinery

There are no proposals for any changes to the existing regulations ( SI 2000/540 & SI 2001/ 846) and these should be used where appropriate.

6.Decapitalisation Rate

The 2005 prescribed rate of de-capitalisation should be applied where appropriate. This is 5% for this class.