Appeal No. VA96/4/023
AN BINSE LUACHÁLA Marina Joinery Limited APPELLANT RE: Factory at Map Ref: 2P, Townland: Ballytrasna,
ED: Caherlag, RD: Cork Upper, Co. Cork B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By Notice of Appeal dated the 26th August, 1996 the Appellant appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation of £840 on the above described hereditament. The grounds of appeal as set out in the Notice of Appeal are that "the valuation is excessive and inequitable having regard to the provisions of the Valuation Acts and other matters". The appeal proceeded by way of an oral hearing which took place in the District Courthouse, Anglesea Street, Cork on the 6th day of May, 1997. The Appellant was represented by Mr. Peter Deller, FSCS FRICS FIAVI of Hamilton Osborne King. The Respondent was represented by Mr. Terry Dineen, B.Ag.Sc., District Valuer in the Valuation Office. Having taken the oath each Valuer adopted as their evidence in chief their respective written submissions which had previously been exchanged by them and submitted to the Tribunal. Agreed Facts: Two elements of the rateable valuation were not in dispute between the parties, namely miscellaneous items at £20 and the office content comprising 4,250 sq.ft. at £3 psf giving an NAV of £12,750. Oral Hearing: Factory 78,634 sq.ft. @ £1.86 psf He stated that: Mr. Deller gave five comparisons in support of his estimate of NAV and thus rateable valuation:- 1. Hendrickson (Europe) Limited, Courtstown Industrial Est., Little Island,
Cork 2. Simon Eurolift, Courtstown Industrial Estate, Little Island, Cork 3. Showerlux, Castle Road, Little Island, Cork 4. Cantrell & Cochrane, Courtstown Industrial Estate, Little Island,
Cork 5. Beamish & Crawford Limited, Marina Commercial Park, Centre Park
Rd, Cork Factory 78,634 sq.ft. @ £1.20 psf = £ 94,361 He stated that £1.20 psf reflected a quantum reduction for the size of the premises. Under cross examination he accepted that the site coverage was less than
50% but stated that because of the shape of the building and of the site,
circulation was difficult. He accepted that the overall rate per square
foot in Beamish & Crawford was £1.66 but stated that the breakdown
as given was as Lisney's had agreed on review. He had made no rates correction
factor alteration in his assessment of the NAV of the premises because
he felt simply that the rates were too high. He commented that in his
opinion the tunnel under the Lee had little or no effect on rental values.
In response to a question that as this was a 1996 valuation, the impact
of the economic boom at the time should be referred back to 1988, he said
that he had not dealt with the matter on this basis and did not think
it appropriate. In reply to questions on the Henkel case he said that
the Tribunal had stated that in that case there were no comparable properties
to the subject of that appeal as it was a very specialised premises. He
stated that there was no evidence of a rental value of £2.25 psf
in the market. His reduction in rent from an average of £1.72 psf
to £1.20/£1.18 psf (a difference of 54p psf) reflected his
professional judgement on the basis of comparisons and quantum. Put to
him that the lowest level for factory space in Little Island was £1.75
psf, he replied that C. & C. was not at £1.75 psf and that the
subject was twice the size of C. & C.. He stated that the bottling
hall in C. & C. has 30 foot eaves height and therefore it was appropriately
set at a higher rate per square foot then normal space. Factory 83,874 sq.ft. @ £1.80 psf = £150,923 He stated that the original rateable valuation of £1,035 represented 12.06p psm and his figure represents 10.2p psm, a reduction of 20%. The Appellants figure of £580 represents a figure of 7p psm, a reduction of 50%. He considered his estimate of rateable valuation reasonable because the
NAV is at the £2.25 level approved by the Tribunal in Henkel (VA93/3/004
- Henkel Ireland Limited v. Commissioner of Valuation) paragraph 4 page
5 of that judgement in which the Tribunal states:- In support of his valuation he cited the comparisons set out below, the improved roads including the new tunnel, the three types of rateable valuations on Little Island, namely those made pre-1989 pre-NAV methods, those made from 1989 with a reducing factor of 0.63% and later NAVs at 0.5%. He listed five premises on Little Island with the rate of 15p psm and stated that the rates correction factor would add approximately 10p psf to rental levels. Mr. Dineen stated that since 1974 rental levels have not justified construction and recent rents being quoted are in the range of £3 psf to £3.25 psf. The reason is improved roads and the tunnel and the improved economy. In his view the Tribunal stated £2.25 psf in the Henkel case because of lack of evidence and/or uneven market at the time. Mr. Dineen listed three comparisons as follows:- 1. Showerlux, Castle Road, Little Island, Cork 2. Cantrell & Cochrane, Courtstown Industrial Estate, Little Island,
Cork 3. Sea Ray Boats, IDA Industrial Estate, Little Island, Cork In support of his rate of £1.80 psf v. £1.75 psf on some comparisons, he stated that all of the comparisons were struck and agreed when the reducing factor was 0.63%. He stated that the NAV must reflect the physical and economic conditions at the valuation date (1996) as if it existed in 1988. Under cross examination Mr. Dineen stated that he could drive a car around the perimeter of the site but was unaware if an articulated truck could travel to all areas of the site. He accepted that it was a factory type premises rather than a warehouse, that it had been built for a particular purpose and was still in a similar use. He stated that he was aware that the private sewerage scheme was not working properly but had no knowledge of the estimate to repair it. He accepted that part of the premises was sub-let at £18,000 pa. He accepted that there was no evidence of rents in 1988 at £2.25 psf in Little Island and accepted the figures in Mr. Deller's comparisons. In relation to quantum he stated that Showerlux although in the comparisons at 45,000 sq.ft. is in fact 90,000 sq.ft. because is was agreed at £1.75 psf in the knowledge that a further 45,000 sq.ft. was coming on stream the following year and would be agreed at the same level. He accepted that there were certain special features in Sea Ray Boats including air conditioning and a special water tank. In relation to the sale price of £560,000 for the subject premises he stated that he would use a figure of five years purchase to devalue this to rental levels. He accepted that the market was better in 1994 then in 1988 but still felt that a similar price would have been achieved for the property. He stated that passing rent was not necessarily the NAV although it is a strong indicator. Determination: The Tribunal is not bound by the figure of £2.25 psf mentioned in the Henkel case (VA93/3/004) as the circumstances of that case are not relevant to the subject. In the view of the Tribunal passing rent on the subject premises in or about 1988 is the best evidence and passing rents on comparable properties are also good evidence. NAVs derived from rateable valuations where there is no passing rent are secondary evidence. Although no rent was passing for the subject premises, evidence of market rents for similar premises range from £1.40 psf to £1.75 psf. There is no market evidence at either levels sought by the relevant valuers, that is, £1.20 psf and £1.80 psf. NAVs derived from rateable valuations indicate rents in the range of £1.50 psf to £1.90 psf depending on the method of analysis. Beamish & Crawford at Marina Commercial Park appears to the Tribunal to be the most relevant comparison put before it in this case. Having regard to the foregoing and the evidence adduced by the parties the Tribunal determines the rateable valuation at £720 calculated as follows:- Factory 7,792 sq.m. @ £16.15 psm = Offices 394.8 sq.m. @ £32.30 psm
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