Upper Tribunal clarifies rating valuation of buildings undergoing redevelopment

19 June 2019

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The Upper Tribunal (Lands Chamber) has recently issued its decision in the case of Jackson (VO) v Canary Wharf Limited (2019) UK UT136 (LC). This was an appeal made by the Valuation Officer which in effect sought to vary the definitive decision on redevelopment, created by the Supreme Court’s decision in SJ & J Monk v Newbigin (2017).

The Upper Tribunal (Lands Chamber) has recently issued its decision in the case of Jackson (VO)  v Canary Wharf Limited (2019) UK UT136 (LC). This was an appeal made by the Valuation Officer which in effect sought to vary the definitive decision on redevelopment, created by the Supreme Court’s decision in SJ & J Monk v Newbigin (2017).

The case involved an office building at Canary Wharf. When the tenant left the landlord immediately stripped back the office to a shell but the reconstruction wasn’t intended to take place until a new tenant was found.

The VO’s case was that the property should still attract a full value as there was no evidence of continuing the programme of works to refit the offices.

The crucial question was whether the office was capable of beneficial occupation which should properly be the starting point of all similar appeals.  

In the Canary Wharf appeal the offices weren’t capable of beneficial occupation at the material day so couldn’t be valued with the normal rating assumption of being in a reasonable state of repair, ie closely reflecting reality.

Interestingly, the Upper Tribunal did distinguish between deliberate disrepair created by redevelopment and disrepair caused by theft but the starting point remains whether the building in its actual state at the material day is capable of beneficial occupation.

As with Monk, it is reassuring to find the hypothetical world of rating closely reflecting real world situations.

Cooke & Arkwright have been providing rating valuation advice to The Welsh Rugby Union Limited (“WRU”) and Millennium Stadium plc for many years. They were recently successful in achieving substantial reductions in the assessments of the Millennium Stadium, covering both the 2005 and 2010 rating list. These negotiated reductions yielded savings of c.£3.5m which, crucially, allows the WRU to re-invest in rugby throughout Wales. They advise the WRU across the group portfolio including the National Centre of Excellence in the Vale of Glamorgan. The valuation issues across the WRU portfolio are complex requiring a high level of understanding of the funding and finances of professional sport in Wales. Cooke & Arkwright’s experience and understanding of these issues and application to the rating valuation have yielded these substantial negotiated reductions. The WRU and the Millennium Stadium entrust our work to organisations with the required levels in experience and expertise in dealing with these complex issues. I am glad to say we have this expertise in Wales. I would have no hesitation in recommending ratepayers making use of this Welsh based expertise.

The Welsh Rugby Union Limited, Welsh Rugby Union Group