[2025] UKUT 224 (LC)

Mr Brown is a Lead Valuer in the RVU North section of the VO and is based in the Manchester office. He joined the VO in 2022 after 40 years in private practice.

Mr Brown did not give us his view about the Category B value; he undertook much the same calculation as Mr Bailey but stopped at Category A. His calculation yielded the figure of £209 per m²; it differed from Mr Bailey’s because he allowed for 6 rather than 3 months’ rent free period, made a deduction (or “toning back allowance”) of 1.5% to reflect the fact that the rent was agreed on 14 May 2015, 1.5 months after the AVD. He also deducted 2.5% because there were in fact two leases and the rating hypothesis requires just one. Before the VTE the ratepayer argued that, instead, a 7.5% discount was required for “quantum” – namely the argument that the more space a tenant takes, the less it would pay per square metre. The VTE accepted that. In the appeal the VO argued that the total area let is already factored into the agreed rent, and that a further 7.5% discount would have an unrealistically dramatic effect on the rent. We agree that a 7.5% discount for “quantum” is inappropriate.

We heard argument about whether the adjustment for time should be done using the date the rent was agreed rather than the date the lease was completed, and we agree that the date on which the rent was agreed is the right date because this rent represents what the market was saying at that date.

However, Mr Brown then observed that the property was let in a shell state and was not as valuable as a “true turn-key Category A”. This is the same point as Mr Bailey made, but Mr Brown put a figure on it; in light of the comparable evidence which we discuss below he took the view that the true Category A value of the Shoosmiths Property would be £230 per m².

If that was right, and a £63 or £65 uplift were applied to it, the Category B value would obviously be rather higher than Mr Bailey’s figure of £281 per m².

Counsel for the VO argued for that £230 per m² figure. The Shoosmith’s property was entered into the rating list at £225 per m², or £640,000. If that £230 per m² is correct then that is as far as the VO needs to go, or can go, to be successful in this appeal because the 2017 list is closed and so whatever our view of the Category B value it cannot be entered in the list at a higher value than £640,000. And if £225 per m² is in fact less than the Category A value of the property then £640,000 is obviously an undervaluation even of the property in Category A condition, let alone at Category B condition, yet is as high as the rateable value can go, and so must be restored.

Mr Brown’s £230 per m² was based on the available comparable evidence for Category A lettings of Grade A office space in Manchester. Both he and Mr Bailey looked at the comparables and we turn to them now.