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Appeal No. VA09/3/004
AN BINSE LUACHÁLA Mullaney Brothers APPELLANT RE: Property No. 2196632, Shop, Store at Lot No. Unit 4, floor 0 & 1, Johnston Court Shopping Centre, B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By Notice of Appeal dated the 7th day of July, 2009, the appellant appealed against the determination of the Commissioner of Valuation in fixing a valuation of €110.00 on the above-described relevant property. The Grounds of Appeal are set out in a letter attached to the Notice of Appeal, which is attached at Appendix 1 to this judgment. This appeal proceeded by the way of an oral hearing held in offices of the Valuation Tribunal, Ormond House, Ormond Quay Upper, Dublin 7 on the 30th day of October, 2009. At the oral hearing the appellant was represented by Mr. Patrick McCarroll, MRICS, ASCS, Chartered Valuation Surveyor. Mr. Brian Ó’Floinn, a District Valuer in the Valuation Office appeared on behalf of the respondent, the Commissioner of Valuation. The Property Concerned The property concerned in this appeal is a retail unit (No.4) in Johnston Court, Sligo. Johnston Court is an enclosed retail mall running from O’Connell Street to what is known as the Wine Street car-park. Johnston Court, which forms part of a mixed development with apartments at two levels overhead, provides a total of 28 retail units, 2 of which have frontage onto O’Connell Street. The mall is so designed as to provide accommodation at 2 levels. The accommodation on the upper level is not directly accessed from the mall, but in some instances occupiers have provided as part of the fit-out an internal staircase linking the two levels. The mall is well finished and by virtue of its two level design provides an attractive shopping environment with unit sizes ranging from circa 37 sq. metres to 334 sq. metres. The property concerned in this appeal is located approximately one third along the length of the mall from the O’Connell Street entrance and has an agreed internal area of circa 60.75 sq. metres at mall level and 45.91 sq. metres at the upper level. Unit 4, which trades as a ladies fashion outlet, is intercommunicating at the rear of the ground floor with other premises occupied by Mullaney Brothers which have frontage onto O’Connell Street. The agreed area measured on a net internal basis area basis as follows: Mall level (retail): 60.75 sq. metres Tenure The property concerned is occupied under a ground-lease type of arrangement from the 21st October, 2007 for a term of 500 years at an initial yearly rent of €1 per annum subject to be reviewed at 5-yearly intervals. Valuation History The property concerned, together with that of several other units in the mall, was first valued in 2008 and on the 8th September the Revision Officer issued a Valuation Certificate to the effect that it was proposed to value the property concerned at a rateable valuation of €110. Following representations by the appellant, a valuation certificate in final form was issued on the 6th November, 2008 confirming the rateable valuation at €110. The appellant lodged an appeal against this assessment under section 30 of the Valuation Act, 2001 and, having considered the grounds of appeal made by the appellant, the Commissioner of Valuation disallowed the appeal and affirmed the rateable valuation of €110, as determined by the Revision Officer. The appellant, being dissatisfied with the Commissioner’s decision, lodged a further appeal to this Tribunal under section 34 of the Act. The Appellant’s Evidence Mr. McCarroll, having taken the oath, adopted his detailed and well-presented précis, which had previously been received by the Tribunal and the respondent, as being his evidence-in-chief. In his evidence Mr. McCarroll contended for a rateable valuation of €79 calculated as set out below: Mall level retail space 60.75 sq. metres @ €220 per sq. metre = €13,365.00 Note: It should be noted that the above valuation of €79 is different from that contained in Mr. McCarroll’s original précis which indicated a figure of €70. The change in valuation was occasioned by an alteration of his area of the accommodation at ground floor level agreed during the course of the oral hearing. In support of his opinion of net annual value Mr. McCarroll introduced six comparisons, details of which are set out in Appendix 2 attached to this judgment. In his evidence Mr. McCarroll described the pedestrianised O’Connell Street as the premier retailing street in Sligo, the most convenient access for car-parking to it being the Wine Street car-park. Pedestrian access from O’Connell to the car-park is either through Johnston Court or the Tesco Mall. Mr. McCarroll said that Johnston Court was intended to be an integral part of a large-scale development scheme prepared for the area between O’Connell Street and Adelaide Street, as provided for under the National Building Agency’s Centre Block Masterplan for Sligo. At the relevant valuation date the rest of the proposed development was only at the planning stage and, as a consequence, Johnston Court will not achieve its full potential for several years. This fact, Mr. McCarroll said, was borne out by the absence of a key tenant, high level of vacant units, poor trading in the mall and low level of foot-fall. In recognition of these adverse factors the landlord had granted to the traders in the mall a 50% reduction in rent in order to encourage them to keep trading. All of this, Mr. McCarroll said, was in sharp contrast to the Quayside Shopping Centre development in Wine Street which was trading successfully with all units being occupied and with a very strong tenant mix. This centre, he said, benefited greatly from having parking for 375 cars in an enclosed multi-storey car-park which was an integral part of the Quayside development. Mr. McCarroll contended that when arriving at the net annual value of the property concerned, regard must be given to the fact that the development of Johnston Court was premature, to the lack of key tenant, high vacancy rate and the to lack of adequate car parking in the vicinity. In his opinion, Quayside was a much more successful retail development than Johnston Court and this should be reflected in the valuation of the property concerned. Under examination Mr. McCarroll said the prime retail street in Sligo was O’Connell Street, and that Wine Street was, at best, secondary. He further agreed that Wine Street was not a retailing location as such, and that several properties on both sides of the street were either in commercial/office use or, in many cases, residential use. When asked about the Tesco mall Mr. McCarroll agreed that Johnston Court was a more attractive development from a shopping point of view but argued that whilst this might be so, the Tesco mall was much better from a business point of view and the traders in this mall benefited greatly from the proximity to the supermarket. In regard to unit 7 (comparison No. 1 in his précis) Mr. McCarroll agreed that his devaluation was on an overall basis. He agreed that on a zoning basis this would equate to a Zone A rate of €316.44, but said he was of the view that units in Johnston Court and Tesco mall should not be valued on a zoning basis. The Respondent’s Evidence Mr. O’Floinn, having taken the oath, adopted his written précis and valuation which had previously been received by the Tribunal, as being his evidence-in-chief. In his evidence Mr. Ó’Floinn contended for a rateable valuation of €110 calculated as set out below: Ground Floor In support of his opinion for rateable valuation Mr. Ó’Floinn introduced four comparisons, details of which are set out in Appendix 3 attached to this judgment. In his evidence Mr. Ó’Floinn said that when arriving at his valuation of the property concerned, he had regard to the assessments of retail units on O’Connell Street at Quayside Shopping Centre. Mr. Ó’Floinn emphasised that O’Connell Street was the prime retail location in Sligo and the average prevailing Zone A rate on the street was €410 per sq. metre, although some individual units were assessed at levels in excess of this figure. Johnston Court, he said, was a well-designed and attractive mall development linking O’Connell Street and the Wine Street car-park, which serves Tesco, Pennys and Dunnes Stores. From a location point of view Johnston Court, he said, was similar to the Tesco arcade but other than that there was no similarity between the two in terms of scale, design specification and the range of retail units available. Having regard to the established Zone A levels on O’Connell Street and the Quayside Shopping Centre, Mr. Ó’Floinn said that he considered a Zone A rate of €340 per sq. metre was appropriate in the property concerned having regard to its size. Under examination Mr. Ó’Floinn said that his opinion of value fairly represented the location and nature of the Johnston Court development. He agreed that in describing the development he had used some of the phraseology contained in the developer’s advertising material but said that any material used by him was factual. In his opinion Johnston Court was a well designed and well-finished development and was much more attractive than the Tesco arcade, which was dated in appearance and contained a number of small, kiosk-type units. This was in sharp contrast to the number and size of the units available in the Johnston Court development. Findings
Determination Ground Floor retail (Zone A): 50.34 sq. metres @ €310 per sq. metre = €15,605 And the Tribunal so determines. |