When valuing a self-storage site, the whole site must be valued, not simply the area not occupied by the containers.
The Valuation Office has succeeded in appealing a decision of the Valuation Tribunal for England concerning land and premises used for container storage in Dal Virk (Valuation Officer) v Moor Lane Self-Storage Ltd [2023] UKUT 93 (LC).
The property comprised a yard in an industrial area on Moor Lane, Birmingham, with a sloping concrete surface. It commenced trading as a self-storage business in 2017. The site was arranged on two tiers with a retaining wall between them and slopes at either end provided vehicular access. The site held the equivalent of 49 standard 20 ft containers in total.
There was no consensus between the parties about valuation methodology for container self-storage sites. The property was valued for the 2017 rating list by applying a rate of £10 per sq m to a site area of 1,500 sq m and adding 48 containers at £150 each. The VTE decision was £12,250 adopting the same values, but based on the smaller area of just under 555 sq m not covered by the containers, and allowing a 5% discount for the sloping site. The VO appealed, seeking a rateable value of £17,500.
The fundamental dispute between the parties was whether the whole site area should be valued or just the area not under the containers. It was agreed the land should be valued at £10 per sq m on a ground rent basis. Excluding the value of the land under the containers would mean the site was worth substantially less with the containers in place than without. This made little sense to the Tribunal, which decided the correct methodology was to value the whole site with an addition for the containers.
This approach was endorsed in Storehouse (UK) Ltd v Wojcik (VO) [1991] LT RA 39 concerning a containerised storage yard at Stansted Airport. The Tribunal concluded the containers were chattels whose purpose was to provide storage space for more than a transient period, their use was essential to the ratepayer’s business and essentially with the land on which they sat.
The site area was fixed at 1,453.75 sq m – splitting the small difference between the submissions. In the absence of any rental evidence, the Tribunal adopted a cost-based approach to the value of each container which produced an annual value per container of £71.90. A 5% allowance was adopted for the sloping nature of the site. The rateable value was £17,100 with effect from 8 April 2017.
Louise Clark is a property law consultant and mediator
