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Appeal No. VA11/1/019 & 020
AN BINSE LUACHÁLA Alan Condron t/a SuperValu & Alan Condron APPELLANTS RE: Property No. 2187881 (VA11/1/019), Supermarket 2 at Condrons Super Valu, Unit 4.5.6 Belgard Square, B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By Notices of Appeal dated the 21st day of February, 2011 the appellant appealed against the determinations of the Commissioner of Valuation in fixing valuations of €279,000 (VA11/1/019) and €170,200 (VA11/1/020) on the above described relevant properties. The grounds of appeal are set out in the Notices of Appeal, copies of which are attached at Appendix 1 to this judgment. The appeals proceeded by way of an oral hearing, held in the offices of the Valuation Tribunal, Ormond House, Ormond Quay, Dublin 7, on the 20th day of April, 2011. The appellant, Mr. Alan Condron, leaseholder of both properties and operator of the SuperValu business in Property No. 1 was present and represented by Mr. Eamonn Halpin, BSc (Surveying) ASCS, MSCSI, MRICS. The respondent was represented by Mr. Denis Maher, MRICS, a Valuer in the Valuation Office. In accordance with the rules of the Tribunal, the parties had exchanged their respective précis of evidence prior to the commencement of the hearing and submitted same to this Tribunal. At the oral hearing, both parties, having taken the oath, adopted their précis as being their evidence-in-chief. This evidence was supplemented by additional evidence given either directly or via cross-examination. From the evidence so tendered, the following emerged as being the facts relevant and material to this appeal. At issue Quantum The Properties At the commencement of the hearing the parties agreed to address the issues pertinent to both properties through the course of this hearing. Property No. 1 – VA11/1/019: This property comprises a supermarket t/a Condron’s SuperValu, much of which is set back from the street and located to the rear of street-side units. Access to the property is by way of a 4.5 metres’ deep and 9 metres’ wide fronted street-side lobby, which also provides access to the car park lifts and adjoining retail units. The subject relevant property is described as an open plan retail unit laid out to SuperValu retail requirements, and also includes ancillary stores, cold stores and freezers, offices, staff facilities, together with locker rooms, canteen and toilets, and plant and switch rooms. The property comprises c. 1,225.2 sq. metres, including a mezzanine store of c. 70 sq. metres. Property No. 2 – VA11/1/020: This property contains the vacated part of the former supermarket, which together with Property No. 1, was the subject of Valuation Tribunal decision VA08/5/120 - Condrons Supervalu. This Property No. 2 comprises c. 622.5 sq. metres with a street frontage of c. 18.2 metres onto Belgard Square West. Access to this property is currently available from the entrance lobby described in Property No. 1 above, and although open plan and vacant, has potential to be divided into at least two independent retail units with own access capabilities. Location Services Tenure Valuation History December 2008: The valuation was appealed to the Tribunal (VA08/05/120) and the value determined by the Commissioner of Valuation was upheld. 2010: Following a subdivision of the premises, the two properties were revised at the request of the occupier and proposed Valuation Certificates issued at €297,000 (occupied section) and €143,100 (vacant section). April 2010: Representations were submitted on behalf of the appellant to the Commissioner of Valuation seeking lower valuations. Following consideration of representations, the Commissioner adjusted the valuation of the occupied section and reduced it to €279,000, and adjusted the valuation of the vacant section, increasing it to €170,200. April 2010: The appellant appealed to the Commissioner of Valuation. January 2011: Following consideration of the appeals, the proposed valuations were affirmed by the Commissioner. February 2011: The appellant appealed those decisions to the Valuation Tribunal by Notices of Appeal dated 21st February, 2011. Floor Areas VA11/1/019 VA11/1/020 Appellant’s Case Mr. Halpin also advised that the floor areas on the respective properties were agreed with the Commissioner. He explained the location of the properties at Belgard Square, and in turn its proximity to the Tallaght Town Shopping Centre. He stated that since the subject properties were valued in accordance with the Revaluation exercise completed some time ago in the Rating Authority area of South Dublin County Council, there were only three commercial lettings on record at Belgard Square. He contended that there remains approximately 12,500 sq. metres of new office space developed and lying vacant in the area, as well as up to 1,000 apartment residential units built or partly completed and either unsold and/or vacant. He noted that the only two major branded facilities which have been occupied since his client commenced trading were Aldi at Tallaght Cross, and Captain America’s. He emphasised that the vacant units in Property no. 2 benefit from approximately twice the frontage of Property no. 1. He referred to Valuation Tribunal judgment VA08/5/219 - Marks & Spencer (Ireland) Ltd. (copy enclosed with his written submission) and cited from the findings therein which noted that the Tallaght Cross development occupies a vastly inferior location from a retailing point of view than the Tallaght Town Square Shopping Centre. Mr. Halpin noted that his client’s premises are located opposite the Tallaght Cross development and are similarly removed from the Town Square. He also stated that the aforementioned judgment reflected those observations by applying a rate of €185 per sq. metre on that particular Marks & Spencer property. Referring again to his submission and the six comparison properties contained therein, namely; 1. Tesco, Clondalkin he declared that, from his perspective, all of the foregoing units were superior to the subject. He advised that the supermarket areas of Comparisons Nos. 1 and 2 were agreed at €200 and €190 respectively, and as noted by him earlier, Comparison No. 3 was determined by the Tribunal at €185 per sq. metre. Referring to his Comparison No. 4, he drew attention to the very limited floor area calculated within Zone A, which was assessed at €850 per sq. metre in Valuation Tribunal Judgment VA08/5/216 – A.J. Clondalkin Ltd. and also that no additional sum was applied to the net annual value for the Off-Licence at that Clondalkin Village convenience store. Mr. Halpin considered the Zone A rate of €650 per sq. metre applied by the Commissioner on the subject Property No. 2, i.e. the vacant units, to be excessive when compared with the rate of €850 per sq. metre, Zone A, at the Clondalkin premises, having regard to the location and catchment area which the latter is serving. The agent’s Comparison No. 5 property details were considered as unreliable, as the NAV assessment on same is under appeal. The details contained in Comparison No. 6 of Mr. Halpin’s submission referred to various vacant units at Tallaght Cross, Village Green, Fortunestown Shopping Centre and Main Street, Tallaght, currently available to let. Mr. Halpin advised that retail units with floor areas in excess of 500 sq. metres are currently available to let at rental levels of €100 per sq. metre or less in the Tallaght Cross development. He added that Zone A rates in the other three noted developments range from €500 per sq. metre on the first two and €580 per sq. metre on Main Street, Tallaght, and contended accordingly, that the rate of €650 per sq. metre Zone A applied by the Commissioner on Property No. 2 herein, is excessive. Mr. Halpin adopted a Zoning approach to calculate the net annual values of both properties, namely the SuperValu supermarket and the vacant unit. By adopting the Zoning Method and a Zone A rate of €500 per sq. metre, he concluded that the valuation of VA11/1/019 should amount to €89,500 and the valuation on VA11/1/020 should amount to €130,000. In support of his calculations, Mr. Halpin argued that the vacant units, because of the benefits accruing to their available frontage, were more valuable in rental terms than the area demised to the supermarket. He explained that he followed the findings of the Valuation Tribunal on the aforementioned Marks & Spencer judgment with respect to the influence of location on the valuation of that department store premises with respect to its proximity to the Town Square, and added that, unlike Marks & Spencer, his client’s premises were not and never were intended to serve as anchor unit/s. He characterised the nature of the Belgard Square development as severely stressed and commercially untenable, and urged the Tribunal repeatedly to have particular regard to the peripheral location to the Square and lack of profile and frontage of Property No. 1, i.e. the subject SuperValu supermarket premises. He asked the Valuation Tribunal to support his calculations above which would reflect an overall rate of €77.50 per sq. metre on Property No. 1. He concluded his direct evidence by stating that, from his point of view, the development at Belgard Square West was an ill-conceived scheme. Cross-examination In response to queries then put by Mr. Maher, Mr. Halpin advised, as follows, that:-
Mr. Condron then took the oath and addressed the Tribunal. He provided details pertinent to the two premises, their locations, various influences on his business at Belgard Square, his experience trading there and elsewhere, his knowledge of the market in terms of rental conditions, competitive influences and trading performance statistics of his competitors in Tallaght. He contended that the publicity surrounding the launch of the development may have served the developer’s strategic goals, guided by the zoning designation established for the area by the Development Plan in 2005, and the aspirations contained therein, including proposed pedestrianised walkways, street barriers, and other proposed neighbourhood style promotional activities. He explained that the reality was and remains that expectations were not fulfilled and that the proposed urban scheme at Belgard Square West providing for extended trading hours, busy cafés, bars and hotels in the development and surrounding area among other things, did not occur as planned. He advised that as an experienced supermarket retailer, his turnover in Property No. 1, from the initial trading date, indicated that the location chosen for his business was ill-advised, and added that since SuperValu opened its premises there in mid 2006, the earlier-opened Sherry Fitzgerald and West Coast Coffee premises had since closed down. As a measure of how matters had either not happened or had gone wrong in Tallaght, he estimated that there are currently 900,000 sq. feet of empty space available and to let in the immediate development. Respondent’s Case Mr Maher contended for the following valuations: In support of the above assessments, he put forward 9 comparisons, details of which are attached at Appendix 3 to this judgment. Mr Maher requested the parties to accept his précis in full, without amendment (excepting only the exclusion noted earlier in the hearing with respect to the assessment of the mezzanine area), which in the usual manner had been exchanged and read by the appellant and his Agent, and the Tribunal members prior to hearing. Cross-examination
Summary Statements Mr. Maher asserted that he tried his very best to assist the tenant as much as possible by adjusting the rate per sq. metre down on Property No. 1, and increasing the RV of Property No. 2 by a similar amount. He felt that this reapportionment of values fully reflected the changed circumstances resulting from the sub-division of the initial property. He also expressed surprise that the matter had come back to the Tribunal for consideration for the second time in a little over two years. Findings
Determination and that the NAV on the relevant subject property of VA11/1/020 should be calculated as follows:- And the Tribunal so determines. |