Petrol filling station — Future gallonage — Development potential of site — Combined site — Method of valuation and apportionment of values — Claim for £500,000 and award of £227,000
The claimant company owned a petrol filling station in Mayplace Road West, Bexleyheath. The site was included in a compulsory purchase order in respect of a local road scheme and entry was taken on April 1 1986, a date agreed as the valuation date. The claimants sought $stlb;500,000 as compensation based on an assumption agreed with the acquiring authority that, in the absence of compulsory purchase, the site could be redeveloped with an adjoining site as a new filling station. The freehold of the adjoining site was owned at the valuation date by Mr E Cutts, the managing director and controlling shareholder of the company.
The acquiring authority contended that the compensation should be £90,000 if any element of marriage value arising upon redevelopment with an adjacent site is ignored or £132,100 if the marriage value is included. The issues between the parties concerned the future gallonage, the capital value of the potential of the estimated gallonage, the redevelopment costs and the method of apportioning the value of the combined site.
Held A modern profitable station could be physically established on the combined site, but it would not automatically be of attraction to a major oil company. On the evidence, an appropriate estimate of future sales volume would be 750,000 gallons per annum, and a capital value of 75p per gallon would have been obtained. The capital value is determined by such factors as the demand at a given time for the estimated volume of sales and insulation of the estimated sales volume from future competition.
The estimated capital cost of providing a modern filling station on the site would be £200,000; when this figure is deducted from the product of the gallonage and the value per gallon, a capital value of the combined site of £362,500 is obtained. The adjoining site had already been acquired from Mr Cutts for an agreed sum of £135,671, this figure should be deducted from the combined site capital value to produce the award for the reference site of £227,000.
Kim Lewison (instructed by Russell-Cooke Potter & Chapman, of Farnham) appeared for the claimant and called PW Squire FRICS and JRE Sedgwick FRICS; and Patrick Surrey (instructed by the solicitor to Bexley London Borough Council) appeared for the respondent acquiring authority and called S J Kitchen ARICS ASVA, A J Newbolt FRICS and RG Ingram FRICS.
