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Appeal No. VA05/3/050 AN BINSE LUACHÁLA Xtra-vision Limited APPELLANT RE: Shop at Lot No. Unit 7, Owenabue Mall, Carrigaline
Middle, Carrigaline, Cork Lower, County Cork B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By Notice of Appeal dated the 20th July, 2005 the appellant appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation of €190.00 on the above described relevant property. The Grounds of Appeal as set out in the Notice of Appeal are: At issue The appeal proceeded by way of an oral hearing, which took place in the
offices of the Valuation Tribunal, Ormond House, Ormond Quay, Dublin,
on the 7th October, 2005. The appellant was represented by Mr. Joseph
Bardon, FSCS., FRICS., Dip. Environmental Economics, and the respondent
by Mr. Terence Dineen, B.Agr.Sc., District Valuer with the Valuation Office.
The Property The building was recently constructed to a modern standard with concrete floors, smooth rendered concrete walls, PVC framed windows, a flat roof to its single storey section and pitch roof to its two storey section. Internally, the subject floors are carpeted, ceilings are fitted with acoustic tiles and walls are smooth plastered and timber panelled. Owenabue Mall comprises five ground floor units (one incorporating a basement), three first floor units and one second floor unit. The main frontage of the subject retail unit, incorporating a set of double doors, being the ground floor of the two storey block, measures circa 10.8 metres with circa 9.1 metres within the timber shopfront. The front elevation extends by a further circa 6 metres within the single storey extension to the north. These two elevations feature overhead timber fascias incorporating signage to the style of Xtra-vision, and fenestration below. The remaining elevation, which does not contain a window or other forms of relief or decoration and is essentially on the gable side of the two storey structure, faces south and measures circa 4 metres. Tenure Valuation History Appellant's Case Mr. Bardon explained that in early January 2005 his firm, representing the appellant, had made representations to the Valuation Office but failed to persuade the Revision Officer to reduce the RV determined at that time at €205. Following the submission of a formal Appeal on 14th January, 2005 further discussions took place between the parties, including both the Revision Officer and the Appeal Officer, which resulted in a reduced RV of €190. On 20th July, 2005, Bardon & Co. filed this Appeal with the Valuation Tribunal. Mr. Bardon summarised the contents of his written submission and essentially focused on two net points for consideration, as follows: 1. The property, he contended, should have been valued on a zoned basis in common with many other Main Street retail units, revised in Carriagline in recent years. He referred to a Valuation Report, which was apparently prepared by Mr. Terry Dineen, as Revision Officer, on 30th October, 2004, which contained just one comparison property, namely Boylesports, being a Bookmaker's Shop, on a corner of Main Street, in Carriagline, which was valued on a zoned basis. 2. If the zoning approach were to be adopted in this case, how was the floor area to be measured, as the footprint of the building is of such an irregular shape? Mr. Bardon stated that he argued at First Appeal stage that the combined external measurements of the two frontages facing Main Street should be adopted to determine Zone A, whereas the COV was also apparently including the windowless frontage on the south side of the building. Mr. Bardon expressed the view that it was erroneous for the Valuation Office to include the latter frontage. He stressed that the correct basis to calculate frontage was to include the full width of circa 10.8 metres of the primary frontage of the building, which faces west and is located within the two storey structure. He explained to the Tribunal that he came to this revised conclusion post previous discussions with the Valuation Office upon reviewing the contents of the Valuation Office Code of Measuring Practice (the Code) which, he informed the Tribunal, contained a distinction to be made between shop frontage and overall frontage of a unit. Mr. Bardon included a one page extract from the Code within his précis of evidence, attached as Appendix 1 hereto. While acknowledging that the profile of the subject relevant property was good from the south due to the absence of any obstructions or vertical development in its immediate environs, he stated that conversely the profile viewed from the north was quite poor primarily because much of the unit was set back from Main Street and was somewhat hidden from view by the buildings adjoining it to its north side. However, Mr. Bardon also acknowledged that the considerable frontage of the building would, in his view, merit a premium of 5% on the calculation of its value. Mr. Bardon provided valuation analysis on two comparison properties (see Appendix 2 hereto), namely Boylesports, which contained Zone A, Zone B and Zone C analysis, at €218.66 per sq. metre, €109.33 per sq. metre and €54.66 per sq. metre respectively over its total Ground Floor area of 121.62 sq. metres. His second comparison, which was also a Ground Floor unit on the Main Street, was Zoned A and B for Valuation purposes, at €218.66 and €109.33 per sq. metre respectively. His written submission also contained reference to an earlier structure on Main Street, which was previously zoned for Valuation purposes and which contained the former Xtra-vision Ltd., but informed the Tribunal that this building had since been demolished. In accordance with the foregoing, Mr. Bardon sought a reduction in the RV of the subject property, to a figure of €150, which he analysed as follows:- Zone A 65.88 sq. metres. @ €218.66 per sq. metre €14,383 NAV €29,800 @ 0.5% = €149.00 Say €150.00 Mr. Bardon concluded his direct evidence by highlighting the reduced
visibility of the frontage of the subject property when approaching it
from the north; he acknowledged that the Passing Rent was lower than all
of the other five units leased within Owenabue Mall, and suggested this
might be a reflection of the trading strength, profile and covenant of
Xtra-vision as a national trading brand. He expressed a strong view that
the property should be valued on a zoned basis and that the aforementioned
Code required thought to be given to the "timber shop front"
only to establish frontage. By contrast, he cited O'Riordan's Toymaster
store at the rear of Owenabue Mall, which arguably had two large shop
fronts on opposite elevations of their unit which could not all be taken
together as frontage for the purpose of determining the value of the floor
areas within on a zoned basis. He explained that he followed the Code
by adopting a frontage of 10.8 metres in width, returning a distance of
6.1 metres in depth to establish a Zone A area of 65.88 sq. metres, and
then took a further floor area of 65.88 sq. metres and designated it as
Zone B and, consistent with practice, he claimed to apply a Zone C value
on all of the remainder floor area of the subject shop. He employed the
"halving back" approach to the € Rate per sq. metre. He
then applied a 5% uplift in values to represent a premium, which he felt
was attributable to the generous frontage available to this property and
its enhanced elevation when viewed from the south. Respondent's Case Mr. Dineen contended that the subject property in general, and the south elevation of Owenabue Mall in particular, enjoyed a very good profile and this accordingly might explain in part why the Passing Rents were as good as they were for the retail units therein. Mr. Dineen then explained in summary form how the RV of €190 could be calculated. He indicated that by adopting Mr. Bardon's earlier approach incorporating all of the circa 15 metre frontage, the RV would calculate to a sum equivalent to €172.50. Mr. Dineen then suggested that this figure should be raised by a value of 10% to reflect the benefit of the free, on site, public parking facility. Accordingly the RV would increase in total to €190, being the sum currently determined by the COV. He commented that there were four additional retail units within the Owenabue Mall and just two units associated with the anchor, in the Carrigaline Shopping Centre across the street and in close proximity to the subject. Mr. Dineen also expressed the view that the first floor office units above might be considered as comparison properties. He argued that the subject property could be not be valued on a zoned basis as it was attached to the other units at the rear, but that if it were to be zoned, the valuation practice would require the adoption of all of the frontage facing Main Street or circa 15.3 metres, together with 50% of the south elevation return, which as noted previously, measured circa 4.3 metres in total and by his calculations a similar RV would result, i.e. at or about €190. Mr. Dineen explained that at First Appeal the decision was taken not to value the property on a zoned basis, primarily as the Owenabue Mall was a stand-alone development with its own address; no other properties on the street had the same propinquity to the large public car park; the rents of the units facing south were apparently more valuable than that of the unit fronting Main Street; and the approach to valuation was consistent with the manner in which the units adjoining the anchor in the nearby Carrigaline Shopping Centre were treated for the purpose of Valuation. Mr. Dineen said that the issues raised by the appellant at First Appeal, namely: 1. Zoning of the subject unit to reflect its unusual shape; did not merit support in his view. Mr. Dineen's précis contained reference information on all of the units trading and occupied on the Ground and First Floor of Owenabue Mall. It contained details of Passing Rent, analysed Net Annual Values per square metre, as initially determined by the Valuation Office, and where applicable, later adjusted following representations made on same. In the case of the subject the initial NAV was reduced, following Appeal, by 7.5% to acknowledge shape and size considerations specific to it. Mr. Dineen also provided the Tribunal with details of the manner in which Unit 1 -3, being Toymaster, had an initial NAV per square metre calculated and later adjusted to €136.67 per sq. metre following First Appeal. He suggested that the reduction in the RV of €19 per sq. metre on Toymaster resulted from a combination of the following factors: its location at the rear of the Mall as opposed to the location on Main Street enjoyed by the subject; the apparent excessive Passing Rent; the alleged over-selling of the Centre by the developer; and the alleged poor trading performance of that particular toy store. Mr. Dineen's précis also contained reference details on Units No. 7 and 12 in the Carrigaline Shopping Centre, being a fashion retail unit and restaurant respectively. Mr. Dineen's comparisons are at Appendix 4 hereto. Cross-examination In response, Mr. Dineen stated that the Valuation Report should not be seen as an exhaustive analysis of the recommendation made by the Revision Officer. He explained that the Staff Valuer within the Valuation Office was provided with a Schedule of the Passing Rents on all of the occupied units within Owenabue Mall, which Mr. Dineen considered useful in assisting with the determination of a fair Rateable Valuation on the subject. Mr. Bardon expressed concern as to how information was shared and exchanged between the relevant parties within the Valuation Office on such an exercise commencing from the initial Revision and proceeding through the Representation stage, First Appeal and finally Appeal to the Tribunal. Mr. Bardon contended that the Carrigaline Shopping Centre, with its anchor and two units, differed substantially from the Owenabue Mall, but acknowledged that, in his view, the parking facility at the latter was superior to the Shopping Centre across the street. Mr. Bardon also put it to Mr. Dineen that the visibility of the subject was poor when approaching from the north, and that its southern elevation did not display signage to identify Xtra-vision trading within the subject. Mr. Bardon did acknowledge that the unit was easily seen from the bridge over the Crosshaven River, which is in close proximity to the subject, but in reply to the foregoing, Mr. Dineen contended that he did not primarily rely upon profile to the south in determining the RV on the subject. In a further response, Mr. Dineen indicated that, in his view, Passing Rent of itself should not be totally relied upon, but that a pattern of Passing Rents could be useful to the exercise of Rating Valuation. He additionally stated his belief that the lower rent apparently being paid on the subject reflected the unusual shape and floor plan, and would not acknowledge or accept Mr. Bardon's view that the Passing Rent on the other retail units in Owenabue Mall might be too high. To support his opinion on the earlier view on the use of Passing Rents, he provided the Tribunal with a copy of the Lands Tribunal for Scotland case, being WH Smith PLC v Glasgow Assessor and Renfrewshire Joint Board Assessor (2004) RA 197-219. Mr. Bardon challenged Mr. Dineen's approach of introducing contemporary
valuations as comparisons from the Valuation Office, all derived on the
same day, in the Owenabue Mall, as appropriate or reliable evidence. Mr.
Dineen responded that he could not see a reason why they could not be
used as suitable comparisons and introduced into evidence, at which Mr.
Bardon expressed the concern that such a procedure could lead to a disregard
for the "tone of the list", and he referred to the findings
of the Tribunal in VA04/1/028 - Careworks Ltd., and in particular to paragraph
3 of the Findings therein, which states: Mr. Bardon, while arguing that the Owenabue Mall, unlike the Carrigaline Shopping Centre across the road, is not a shopping centre, questioned why Mr. Dineen used the two unzoned units in that Centre as comparative evidence in his written submission. Mr. Dineen again stated that they were not zoned, were located in a shopping centre and were actually inferior in his mind to the subject. Referring to the definitions of "shop front" and "building front" and their respective differences based on whether the building was a shop only or mixed, sharing a front serving offices for example, Mr. Dineen argued that it was proper to include both western elevations of the subject in determining the shop frontage in this case. Findings & Conclusion 1. The Gross Internal area of the subject unit is agreed between the
parties at 256.3 sq. metres. Accordingly, the Tribunal hereby adopts the following approach to valuation and determines the net annual value and the rateable valuation of the subject properties as follows: Zone A: 15.3 metres x 6.1 metres = 93.33 sq. metres @ €218.66 per
sq. metre = €20,408 NAV: €30,916 @ 0.5% = €154.58 And the Tribunal so determines.
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