[2025] UKUT 00291 (LC)

Mr Mak is a Lead Valuer in the National Valuation Unit of the VO, a position he has held since 2022. He primarily deals with the valuation of retail, office and industrial properties across the London Boroughs of Lambeth, Southwark, Lewisham, Hackney and Newham.

Mr Mak said that Ms Xiaoli considered that the VO had included excessive area in Zone B by using a depth of 7.62 metres instead of 6.1 metres. She also thought that the remainder should be valued at A/8 rather than A/4 and that the staff room, which was in Zone B, should also be valued at A/8.

Mr Mak said that floor areas of the Property and any comparables were all based on the net internal floor area (‘NIA’) calculated by reference to the Royal Institution of Chartered Surveyors (RICS) Code of Measuring Practice (6^th Edition) (‘the Code’). According to the Code the retail area of the shop is the NIA including “Storerooms and ancillary accommodation formed by non-structural partitions…” and excluding “Storerooms and ancillary accommodation formed by structural partitions”. It also states that “the use of zones when assessing the value of shops is a valuation, not a measurement, technique. Consequently, it is not part of this Code. Market custom shall prevail”.

His report contained a helpful summary of the two zoning methods adopted by the VO in the London Borough of Lambeth. He explained that for main shopping centre locations a three 6.1 metre zones and a remainder (A/B/C/R) approach was used, but in secondary locations such as Landor Road a two zone and remainder method is adopted where Zone A is 4.57 metres deep, and Zone B has a depth of 7.62 metres (A/B/R). He also included some illustrations showing how the two methods would apply to a shop of 18 metres in depth. This was supplemented by diagrams from the Code depicting how net internal area was determined where non-structural walls were present.

When Mr Mak inspected the property on 24 August 2024 he noted that the two treatment rooms and the staff room were enclosed by non-structural partitions. These were ignored for the purposes of calculating the floor areas.

In coming to his revised valuation Mr Mak had investigated the tenure of the other shops in the parade. I set out below his summary of the rental evidence:

It should be noted that Mr Mak had adjusted the rents to take account of rental growth to the antecedent valuation date by reference to a CoStar report, a copy of which was made available to the Tribunal. The adjustment was +2% from 2021 to 2022 and +3% for 2021 to 2023 regardless of when in the year the rent was effective from.

In arriving at the appropriate zone A value Mr Mak ignored No.31 as an unreliable outlier. The rent was set two years after the AVD and the property was used as a restaurant. He applied a weighting of 40%, 30%, 15% and 15% to Nos. 21 to 29 respectively which resulted in a figure of £390 per m² zone A. Mr Mak’s offer to reduce the assessment to rateable value £15,000 was based on this lower zone A rate.

Discussion and determination