The scope of this Practice Note is solely to ensure a consistent valuation approach for this Property Class/ Sub Class/ Type for Non Domestic Revaluation 2023 and subsequent entry in the new Valuation List which becomes effective on 1 April 2023.
The basis of valuation for new entries in the Valuation List, and Rating Revision cases after 1 April 2023, is Schedule 12 (2)(1) of the Rates (NI) Order 1977.
This Practice Note refers to property classified as:
Class: Shops, Showrooms, Supermarkets etc
Sub Class: Shop
Type: Neighbourhood Shop
For the purpose of this Practice Note a ‘Neighbourhood Shop’ can be defined as either a convenience store, mini-market or small supermarket type shop located in suburban locations including NIHE estates, private residential areas or along main arterial routes.
The characteristics of neighbourhood shops vary between standalone shops or shops located in the larger units within small parades of shops. However they will generally have a car park or forecourt to the front and will not have street frontage but are more likely to be set back from the main road.
Neighbourhood shops will vary in size but are likely to be in the size range from 200m² up to 1,000m2.
Schedule 12 Part 1 Paragraph 1 of the Rates (NI) Order 1977 applies.
“Subject to the provisions of this Schedule, for the purpose of this Order, the net annual value of a hereditament shall be the rent for which, one year with another, the hereditament might, in its actual state, be reasonably expected to let from year to year, the probable average annual cost of repairs, insurance and other expenses (if any) necessary to maintain the hereditament in its actual state, and all rates, taxes or public charges (if any), being paid by the tenant”.
Valuation approach for 2023
The Comparative method of valuation is to be retained as the approach for this type of hereditament.
Analysis of local evidence will determine the application of a zoning or an overall approach to the valuation of neighbourhood shops in each locality. Both approaches will be considered to ensure relativity and consistency, however, it is anticipated in most cases an overall approach will be adopted.
If analysis indicates that a property should be zoned then the zoning approach will be acceptable.
If analysis points towards an overall basis of valuation, then the approach to valuation should be as follows: -
Primary Area (PM) - Main shop area (including storage areas if within the main structure).
Secondary Area (SE) - Areas behind structural walls likely to be mainly storage but could be ancillary shop use.
Tertiary Area (TE) - Areas to the rear which by location, access, construction or a combination of these factors are considered inferior to SE.
The appropriate adjustment in value between these areas and upper floors where present, is a matter of valuation judgement based on analysis of the rental evidence.
Rent and Lease Questionnaires
For this class of property Rent and Lease Questionnaires (RALQs) were issued centrally by LPS and analysed by the Practice Note author.
For advice on any aspect of this Practice Note contact LPS on 0300 200 7801.