The Upper Tribunal (Lands Chamber) has increased the rateable value of a Go Outdoors store in Stockton-on-Tees by almost £100,000, after both the retail chain and the valuation officer agreed it had been set too low.
In October 2013, the Valuation Tribunal for England (“VTE”) determined the rateable value of the premises at Portrack Lane, Stockton-on-Tees, Cleveland, at £180,000 with effect from 1 April 2010.
The valuation officer argued that the rateable value should be as high as £345,000, while Go Outdoors, which has traded there since 2009, submitted a proposed value of £226,000. Splitting the difference between those two figures, slightly in favour of the retailer, now the Upper Tribunal has raised the rateable value to £275,000.
P D McCrea FRICS said that the issues between the parties could be distilled into an examination of the evidence in the light of the propositions of the Tribunal in Lotus and Delta Limited v Culverwell (VO) and Leicester City Council [1976] RA 141: “In essence, should the agreed rent on the appeal property, with only a limited amount of other evidence, form the best guide to rateable value, as the respondent ratepayer maintains, or should other evidence of other assessments, and the tone of the list be preferred, as the appellant valuation officer suggests?”
The VTE had found that the rent of £300,000 per year agreed in 2008 had been established following negotiations close to the antecedent valuation date (AVD) of 1 April 2008 and as such provided strong evidence of value. Mr McCrea was also satisfied that the “key evidence” was the rent on the property itself, as well as the rental and assessment evidence of a small number of comparable properties in close proximity.
In relation to those, he said that the most reliable evidence was the two open market lettings to The Range and B&M, both at Holme House Road within a mile of the appeal property, and secondly the rent review and rating assessment of Matalan, on Bridge Road, Stockton.
But he said that the two lettings, in 2009 and 2010, both “occurred in a weaker market than that at the time of the letting of the appeal property” in January 2009, while the Matalan rent review in December 2006 was in a better market than at the AVD, as well as that store being in a better retail location.
He said: “The evidence, on any basis, provides a very mixed picture. In my opinion the evidence provided by lettings to The Range and B&M is to be preferred to that provided by the rent review of the Matalan unit, but must be subject to adjustment for the differing market conditions and location. Assuming there is no locational difference between The Range and B&M, taking the £50.27 per sq m in September 2010, and £56.23 per sq m in February 2010 and extrapolating backwards to April 2008, would put The Range/B&M at a shade under £75 per sq m at AVD. Based upon a straight line deterioration in market conditions and therefore rents, the appeal property should notionally be at something higher than that given its superior location. There was insufficient evidence from the valuers to allow me to safely make that assumption, however.”
“Doing the best I can from the evidence, in my judgement the correct rate to apply to the ground floor space of the appeal property, at the AVD, is £70.00 per sqm.”
Together with values for the mezzanine sales area and staff room of £25.00 per sqm, and for the stock room and warehouse areas of £15.00 per sqm, he arrived at a total rateable value of £275,000 with effect from 1 April 2010.
Lamb (Valuation Officer) v Go Outdoors Ltd Upper Tribunal (Lands Chamber) (P D McCrea FRICS) 16 July 2015
Cain Ormondroyd, instructed by HMRC solicitor, for the appellant
Daniel Kolinsky QC, instructed by Colliers International, for the respondent
