Outlet Centres (Non Domestic Valuation practice notes)
These Practice Notes were developed for the purpose of revaluing non domestic property in Northern Ireland as part of Reval2023. They were produced primarily as guidance for LPS Valuers to ensure, amongst other things, consistency of approach and practice in rating valuations.
Scope
The scope of this Practice Note is solely to ensure a consistent valuation approach for this property Class / Sub Class / Type for Non-Domestic Revaluation 2023 and subsequent entry in the new Valuation List which becomes effective on 1 April 2023.
The basis of valuation for new entries in the Valuation List and Rating Revision cases after 1 April 2023, is Schedule 12 (2)(1) of the Rates (NI) Order 1977
Description
This practice note refers to property classified as:
Class: Shops, Showrooms, Supermarkets etc.
Sub Class: Retail Outlet Unit
Type: Not Applicable
There are two outlet centres in Northern Ireland.
- The Junction, Antrim
- The Boulevard, Banbridge
Planning Policy Statement 5, paragraph 46 states:
“Factory outlet centres proposals will be acceptable in town centres and the Department will encourage such proposals. Proposals for factory outlet centres, of an appropriate scale, in out-of-centre locations may be acceptable provided that the proposal satisfies all the criteria set out at paragraph 39”.
Paragraph 39 states:
“Major proposals for comparison shopping or mixed retailing will only be permitted in out of centre locations where the Department is satisfied that suitable town centre sites are not available and where the development satisfies all the following criteria:
- complements or meets existing deficiencies in the overall shopping provision;
- is unlikely to lead to a significant loss of investment in existing centres;
- will not lead to an unreasonable or detrimental impact on amenity, traffic movements or road safety;
- will be accessible by a choice of means of transport;
- will provide adequate car parking, cycle parking and facilities for other transport modes, where appropriate;
- is to a standard of design, of both the buildings and the spaces around the buildings, which contributes positively to townscape and is sensitive to the surrounding area;
- provides suitable access for the disabled;
- is unlikely to have an adverse impact on the vitality or viability of an existing centre or undermine its convenience or comparison shopping function;
- will be unlikely to add to the overall number and length of car trips and should, preferably, contribute to a decrease; and
- will be unlikely to prejudice the implementation of development plan policies and proposals.
Where a proposed out-of-centre development satisfies the above criteria the Department will favour an edge-of-centre location over a location elsewhere out-of-centre.
The planning conditions attached to outlet centres are as follows:
“The retail floor space hereby approved as a factory outlet centre shall be used only for the retail sale and ancillary storage of discounted goods as described hereunder and no other purposes, including any other purpose in Class A of the Schedule of the Planning (Use Classes) Order Northern Ireland (2015):
For the purposes of this condition, factory outlet centre means clearance stores operated by:
(a) Manufacturers
(b) Retailers who do not directly manufacture their own brand or
(c) The franchisees or licensees of such manufacture or retailer
With regards to The Boulevard, Condition 11 of the planning permission has been modified to allow for 1,240m2 of floor space to be used for sale of food or drink for consumption on the premises. Initial approvals did not allow for restaurant or leisure uses.
Legislative background
Schedule 12 Part 1 paragraph 1 of the Rates (NI) Order 1977 applies:
“Subject to the provisions of this schedule, for the purpose of this Order the net annual value of a hereditament shall be the rent for which, one year with another, the hereditament might, in its actual state, be reasonably expected to let from year to year, the probable average annual cost of repairs, insurance and other expenses (if any) necessary to maintain the hereditament in its actual state, and all rates, taxes or public charges (if any), being paid by the tenant”.
Valuation approach for 2023
The comparative method of valuation is to be retained as the approach for this type of hereditament. Outlet units are valued on an overall £/m2 basis. This class of property is valued by reference to turnover rents with adjustments for landlord incentives where appropriate. The Adjustment of Rental Transactions for Non Domestic Rating Valuation Guidance Note is applied.
Rent and Lease Questionnaires
For this Class of property Rent & Lease Questionnaires were not issued. Rental schedules were received for both outlet centres.
Contacts
For advice on any aspect of this Practice Note contact LPS on 0300 200 7801.