Conference and exhibition centres
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
Conference and Exhibition Centres are subject to co-ordination procedures as outlined in the relevant Practice Note.
The number of hereditaments within this class is relatively small. Examples of the older centres are the Brighton Pavilion, Blackpool Winter Gardens and Earls Court in London. Modern provincial centres include the National Exhibition Centre at Birmingham, the International Convention Centre at Birmingham, the Scottish Exhibition Centre in Glasgow, the Conference Centre at Harrogate and G-Mex Centre in Manchester.
Hereditaments vary from the multi-purpose hall used for trade exhibitions and “Arena Events” such as 5-a-side football to the larger complex with separate buildings for each type of event, eg conference hall/theatre; exhibition hall; arena. The International Convention Centre at Birmingham has 11 main conference halls plus 10 smaller meeting rooms which can accommodate a total of 10,000 delegates simultaneously. Its nearest British rival, the QE2 Conference Centre in Westminster (a Crown occupation), has only four halls catering for 2,500 people. Ancillary amenities such as restaurant, bar, banking facilities and newspaper kiosks are usually provided and the larger complexes may even include hotel and office accommodation. Extensive car parking either within the centre or close-by is a necessity.
Conference and Exhibition centres are usually owner-occupied, sometimes by public bodies, sometimes private undertakings, often by a combination of the two. For example, a local authority scheme may be backed by a major insurance company and the two will form a consortium to run the enterprise. They are available for hire for commercial, cultural, educational, political, sporting occasions, etc.
As conferences provide up-to-date information, the life-blood of the rapidly changing economy of the late 20th century, they are a boom industry. Most towns present a line-up of conference centres, and every hotel purports to be one.
For the large conference centres to work commercially, the inevitable gaps in the conference diary must be filled with alternative spectator fixtures, such as concerts (classical and popular), sports and media events. In Birmingham, the largest of the centres eleven halls is a 2,200-seat purpose-built symphony hall and some 200 metres away, the new National Indoor Sports Arena has been constructed. A 350 bed hotel, adjacent and linked to the convention centre, has been developed by a major hotel chain.
The Birmingham Convention Centre and the Scottish Exhibition Centre are both Municipal ventures, supported by very substantial European Community development grants.
Conference and exhibition centres are usually built to a high standard. They are also usually built to permit flexibility of layout and use.
Special features of some designs include water, electricity, waste, telephone and compressed air facilities carried through a large diameter walk-through tunnel under the halls. In order to secure maximum usage of floor space, all plant and ducting for ventilation, heating, smoke extraction, sprinklers and lighting systems may be mounted in the roof voids. At the G-Mex Centre in Manchester, a grid of cross-ducts at 5-6 metre centres within the floor, spans the building to carry electric cables, water, gas, drainage and compressed air as well as 500 telephone lines and gas detection equipment. Every exhibition stand is within 3m of a duct.
Facilities at the larger centres feature halls of nearly all sizes, shapes, and characters; raked auditoriums for conferences, lectures, cinema and theatrical performances. Auditoriums are likely to be equipped with translation facilities in up to 12 languages simultaneously. Halls may be adapted for a wide range of uses by means of variable acoustics, retractable seating and an array of high-technology facilities.
Support services are vital to conference and exhibition centres. For example at the Birmingham International Convention Centre, all eleven halls can be catered for simultaneously. Dinners are prepared in a central kitchen, distributed through a network of passages and hoists and then reheated in serveries adjoining each hall. Each hall also has its own outer ring of “break-out facilities”, including foyers, toilets and bars.
The services installations, which can amount to some 40% of the cost of the building, are usually specifically designed to assist in the flexibility of the use of the conference and exhibition centres. Computer controlled management systems of the services may include monitoring of the gas and electricity usage. Large areas for product exhibitions result in an increased air-conditioning load to care for the theatrical lighting required.
3.1 Basis of Measurement
The basis of measurement for this class is Gross Internal Area. Reference should be made to the VO Code of Measuring Practice for Rating Purposes.
3.2 Plant & Machinery
The following list of plant and machinery likely to be found as part of a conference or exhibition centre includes rateable plant and machinery and some which should be identified in connection with possible rental analysis, and/or comparison generally:-
(i) Boilers for heating purposes, plus boiler accessories.
(ii) Air compressors.
(iii) Foundations and settings.
(iv) Fire protection system including sprinklers, pumps, tanks, hydrants and fire alarm system.
(v) Security systems.
(vi) Ventilating and cooling systems including plant, etc.
(vii) Standby generating facilities.
(viii) Passenger lifts.
(ix) Lighting of parking areas.
No single method of valuation is appropriate to this class of hereditament. Each hereditament should therefore be considered in the light of all known facts and individual circumstances and an assessment determined after due weight has been given to evidence of value from all sources (see Garton v Hunter (VO) CA 1969 RA 11). However, since such hereditaments tend not to be let on terms that are relevant for rating purposes, it is unlikely that there will be sufficient direct rental evidence on which VOs can rely. In the absence of any useful rental evidence the Receipts and Expenditure basis of valuation is likely to be pursued as the primary approach in those cases where the hereditaments are either provided for profit (or are intended to be operated for profit) or are of a type which could be operated for profit by another potential hypothetical tenant. The contractors basis is likely to be the principal approach for all other hereditaments. The VO Cost Guide Section 5:080 has been issued specifically in respect of this class, although other parts of the Guide may be relevant.
Application of the respective methods of valuation are as follows:-
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The method of rental adjustment and comparison is as for all other hereditaments.
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The Receipts and Expenditure Basis should utilise actual accounts where the hereditament is operated with a view to maximising profit, but where it is being applied in circumstances in which the local authority has not sought to maximise profit, both receipts and expenditure may need adjustment to accord with the targets of a competing hypothetical tenant. An end addition may also be needed where the hereditament is operated for mixed motives, ie profit and intangible benefit. Where the particular hereditament (being of a type which is frequently found in private sector occupation) is likely to attract a private sector tenant who would operate it in a manner which would not differ from the policy of the local authority, the assessment should not differ from that of an exactly similar privately occupied hereditament. Receipts in the form of revenue grants should not be deducted, but it is incorrect to have regard both to such grants and to higher charges which would be made by a competing bidder, unless the same grants would be available to that bidder.
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In circumstances where the contractors basis applies, the five stages should be applied as follows:-
Stage 1 - It will be assumed that the occupying authority would have required either an exactly similar or a substitute building, had the hereditament in question not been available, unless evidence to the contrary can be shown. A substitute structure costed for Stage 1 may be smaller in size and/or cheaper in design than the actual hereditament, provided that it would fulfil the hypothetical tenants requirements. No deduction should be made in respect of grant aid or donations, unless it can be established that the hereditament or part thereof would not have been provided at the AVD in the absence of the specific grant involved.
Stage 2 - Allowance should be made for physical and functional obsolescence. The allowance for physical obsolescence should reflect the regular expenditure needed for annual repair of the subject hereditament as compared with a new structure. Functional obsolescence directly associated with features such as unnecessary height, excessive size, excessive ornamentation and inferior facilities should already have been identified and reflected in the lower costings adopted for the substitute building in Stage 1 and no further deduction is needed. But a specific functional obsolescence allowance will be appropriate for higher running and efficiency-in-use costs as compared with those incurred in the occupation of a new “substitute” building.
Stage 3 - Land value should be arrived at in a manner which accords with the principles set out in the decision of the Lands Tribunal in Dawkins (VO) v Royal Leamington Spa Corporation and Warwickshire County Council (1961).
Where the hereditament is located in an area of high land value, but could without material functional detriment operate from an alternative lower value site, it is appropriate to adopt the lower value on the footing that this would be the most likely location of a substitute hereditament. The immediate site of the structure(s) together with immediate landscaping, access and car park(s) should be subject to the same percentage obsolescence allowance as accorded to the buildings in Stage 2.
Stage 4 - The decapitalisation rate as prescribed ie 6% is to be adopted.
Stage 5 - Where a substitute building of smaller size and/or cheaper design is assumed for Stage 1, and where a cheaper substitute site is adopted in Stage 3, it may be necessary to examine whether a Stage 5 addition is appropriate to reflect the additional value which the actual hereditament has, as compared with the substitute building and site envisaged in Stages 1 and 3; such value should not be found by reference to cost, and must instead have regard to extra revenue receipts or other advantages which accrue to the occupier.
The result of all five stages must be consistent with assessments of comparable hereditaments; this may involve re-examining Stages 1-3, but no adjustment should be made whether directly or indirectly to the de-cap rate.
Where it is possible to use alternative methods of valuation, the result of applying the contractors basis should be compared with the receipts and expenditure basis and, if possible, adjustments should be made in order to produce consistent results. Where there is no reasonable scope for adjustment, a judgement must be formed of the evidential weight of each basis, on the facts of each case. Less weight should be given where the scope for error is greatest.
This property is valued using the non-bulk server. The manual can be accessed here.
5.1 Surplusage
Exhibition Centres need to be large enough to accommodate the largest exhibition which is likely to be attracted to the venue. It follows that it is likely that a significant amount of the floor space will be unused for many parts of the year. The practicable maximum usage in any year is therefore likely to be considerably less than 12 months. Caution should therefore be exercised in conceding surplusage allowances which should be restricted to cases where the hereditament clearly exceeds its ideal design size.
5.2 Start-Up Allowance: Build-Up of Trade
Conferences for which the larger centres cater are normally booked well in advance, sometimes several years. As a result, it can take a similar period for trade to build up to what might be regarded thereafter as a normal level for a conference and exhibition centre. The rate of build up of trade in a new centre will also be influenced by the competition from established centres, from which conference organisers may be reluctant to move unless it is perceived that such a move will bring substantial advantages. The start-up period for a new centre if such a period exists, may be estimated by comparing projected bookings with practicable maximum occupancy rate.
5.3 Allowances for Unremunerative Expenditure Over Provision of Services
Where the conference and exhibition centre has recently been developed by a body which is itself the most likely hypothetical tenant, it would only be in exceptional circumstances that it would be held that there had been an over-provision of services.
5.4 Local Authority’s Overbid
In cases where property occupied by a local authority is valued by reference to profits, it may be necessary to increase the results thrown up by the profits basis to take into account the additional motives which a local authority may have as hypothetical tenant over and above those of a purely commercial competitor. This principle has been established by the Lands Tribunal in a series of cases concerning municipal markets, a beach and esplanade undertaking, and a pier. In Taunton Borough Council v Sture (Valuation Officer), 50% was added to represent the authority’s overbid. In two subsequent market cases, “overbids” of 35% and 25% were added. Where an overbid in excess of 50% is considered necessary in order to arrive at a realistic valuation on the receipts and expenditure method, it is probable that more reliance should be placed on alternative bases of valuation.
5.5 Incomplete Development
1. Market appraisal
1.1 Conference and exhibition centres are an extremely important part of the visitor economy. It is highly competitive market with many different types of venue competing to accommodate events. These include purpose-built conference and exhibition centres, hotels, academic institutions, visitor attractions, and sports venues. In addition to venues, the sector comprises a wide variety of other ‘players’ including conference and exhibition organisers, venue-finding agencies, audio-visual suppliers, catering and hospitality companies, IT specialists, and security companies.
1.2 The conference market can be segmented as follows:
International association conferences: This market includes a wide range of events, including medical, scientific, trade organisations, charities, political parties, and professional bodies. Most conferences are held at regular intervals (for example, annual, biennial, etc.) and rotate between different venues/destinations. These events are termed peripatetic. The lead time is an important consideration for venues and destinations when bidding and planning for events. International association conferences typically have a relatively long lead-time (for example, often as much as three or four years).
National association conferences: These events are broadly similar to international association conferences in terms of type of conference. There is also intense competition to attract them. The lead time is generally shorter at approximately two or three years.
Corporate conferences: These involve internal company meetings as well as company annual general meetings, product launches and sales meetings. They include those events which are planned and organised up to 12 months in advance, as well as other meetings with shorter lead times (one to three months).
1.3 Many of the largest purpose-built conference and exhibition centres in the UK are owned and operated by local authorities, either directly or via arm’s length companies. However, there are examples of privately-owned large-scale venues.
1.4 Because of market competition, the diversity of venue types, the commercial/economic development objectives of their owners, event programs, income streams and operating costs the operating profit varies markedly from venue to venue. Whereas some generate operating profits, others have been shown to trade with operating losses requiring revenue subsidies from the local authority (if that local authority is the venue’s owner.)
2. Changes from the last practice note
2.1 There are no significant changes to the approach to valuation, as the modern substitute has always been valued and external works and fees have always been added separately.
3. Ratepayer discussions
3.1 No discussions have so far been held either with ratepayers or their representatives and none are anticipated.
4. Valuation scheme
4.1. Valuation method
4.1.1 The receipts and expenditure basis of valuation should be adopted only in cases where the hypothetical tenant’s sole motive for occupation is for profit. Conference and exhibition centres that do not make a profit should be valued using the contractor’s method.
4.1.2 There may be instances where a public body is or has been involved with the funding or running a venue which makes a profit, although the level may not be sufficient to reflect the true value to the hypothetical tenant, due to the associated socio-economic benefits. In these circumstances the contractor’s basis should be applied.
4.1.3 The costs shown in Appendix A are for ease of reference. In all cases where a Cost Guide code is shown, that must be input into the NBS template, not the costs shown here. Where the Cost Guide code shows options, the costs shown in this practice note should be used to aid selection. Should the Cost Guide show differing costs to those shown in a current version of this Practice Note, please refer to the Class Coordination Team (CCT).
4.2. Stage 1 Estimated Replacement Cost
4.2.1 The Estimated Replacement Cost (Stage 1) of the building(s) should be ascertained by applying the appropriate substitute building cost obtained from a consideration of Appendix A and the 2023 VOA Cost Guide (the Cost Guide) to the gross internal area (GIA). Areas within the building(s) that are not used at the antecedent valuation date and have no prospect of being used should be excluded from the GIA.
4.3. External Works
4.3.1 An addition for external works will be made in the case of conference centres in accordance with the guidance in Appendix B.
4.4. Location factors
4.4.1 Where appropriate costs should be adjusted for location by reference to the Location Factors set down in the 2023 Rating Cost Guide and included at Appendix C.
4.5. Contract Size Adjustment
4.5.1 Contract size adjustments should be made in accordance with the guidance given in the 2023 Rating Cost Guide and included at Appendix D.
4.6. Professional Fees and Charges
4.6.1 Professional fees and charges are to be added for in accordance with the guidance given in the 2023 Cost Guide and included at Appendix E. The fee addition should have regard to the nature of the building under consideration.
4.7 Stage 2 Age and Obsolescence (A&O) Allowances
The Estimated Replacement Cost (ERC) established at Stage 1 above is converted to Adjusted Replacement Cost (ARC) by applying an age and obsolescence allowance.
The standard age and obsolescence allowances (non–industrial) to be applied to the ERC of the individual blocks of permanent buildings are set out in Rating Manual: section 4 part 3 - the Contractor’s basis of valuation.
The scales contained in Appendix F take into account the following salient points:
a. The age and obsolescence scales set out in the rating manual represent the combined age-related physical depreciation along with functional obsolescence and technological redundancy exhibited by buildings of each age typical for their quality/specification and condition. It is anticipated that the stated allowances will be adopted in the majority of cases and only either moderated or increased in exceptional circumstances.
b. Extensions are to be given an allowance appropriate to their age unless of a lower specification than would be expected of a building of that age in which case the allowance should be increased to a level appropriate to reflect the specification of the building as a whole.
c. In respect of physical depreciation, the above scales are intended to reflect normal wear and tear and/or deterioration due to the age of the building. The scales assume an average degree of cyclical refurbishment work will have been undertaken, to include whole or partial renewal of building sub-components, most particularly relating to mechanical and electrical services and internal fit-out, but also including periodic renewal of roof coverings and windows.
d. It follows from the above that no adjustment away from the scales is required in the majority of cases where older buildings have been subject to modernisation and refurbishment works, as these are explicitly assumed to have occurred. An exception to this would be for a building taken back to shell and reconstructed with significant renewal of structural elements, where an abatement of age-related physical obsolescence may be required.
e. An example of a building requiring an abatement of the allowances provided by the scales (due to the mitigation of physical depreciation) would be where a major renovation has occurred utilising the original building foundations, frame (including upper floors) but with comprehensive replacement of the external envelope (walls, windows), a complete internal refit and wholescale replacement of mechanical and electrical services.
f. Conversely, the above scales will be insufficient to reflect physical obsolescence in cases where buildings are substantially un-modernised and in any case, the scales do not apply in instances where the hereditament is not repairable at reasonable cost and where it falls to be valued rebus sic stantibus.
g. To qualify as a substantially un-modernised building it is expected that the building will predominantly have the following:
- single glazed windows
- original internal layout
- original ceiling height, with no suspended ceilings
- original external walls
- pre 1980 internal finishes (flooring, ceiling and walls, internal doors and fixtures and fittings)
This is not intended to be applicable to prestige buildings that add character and esteem to the hereditament.
h. In respect of functional and technological obsolescence, for buildings that remain in operational use, the scales include adjustments to reflect functional and technological deficiencies observable in buildings typical of their original period of construction but taking account of the level of assumed cyclical refurbishment reflected in the physical depreciation element of the scales.
i. The type of functional and technological obsolescence factors already reflected in the scales include the following:
- poor energy efficiency and/or environmental sustainability
- inappropriate layout inhibiting flexible and efficient space utilization
- modern health and safety, fire or building regulations that preclude or limit the original purposes of the building
- dated design practices that restrict modern usage (such as lack of/or minimal floor and ceiling voids)
- the absence of modern space heating or air conditioning systems within a building
j. It follows that only where buildings display specific functional deficiencies or issues of technological redundancy, that are atypical for their age, the age-related allowances provided by the scales should be increased.
k. One indicator that additional functional obsolescence is present such that the allowance provided by the scales should be adjusted is the presence of new and/or replacement facilities making the existing building surplus. Such replacement or other material redundancy should be considered and may result in the total redundancy of the pre-existing building, i.e. 100% obsolescence.
l. If at the Antecedent Valuation Date, where there are buildings, or parts of buildings, that through an established pattern of use have been unused for a number of years the area of these buildings, or parts of buildings, is to be excluded from the GIA.
m. This adjustment takes into account deficiencies in the actual building from an occupational point of view, which is not reflected in the ERC.
4.7.1 Flat roof allowance
Permanent buildings built prior to 2005 with a flat roof are to receive an additional allowance. The allowance is not to be applied to temporary buildings, stores, workshops or garages.
a) £80 per m2 ARC of the footprint of the flat roof for buildings constructed up to and including 2004. b) No allowance for flat roofs constructed from 2005 and onwards
Where a building has varying roof types a reasonable apportionment should be made to arrive at the allowance. What is flat as opposed to a pitched roof will generally be self-evident. Flat roofing allowances will automatically apply here to all types of flat roof. In instances where an allowance is sought for pitched roofing caseworkers should seek advice from the National Valuation Unit before proceeding. The age and obsolescence allowance applied to the buildings should also be applied to the external works (averaged as necessary). The spreadsheet in the Non-Bulk server application will automatically do this.
4.8 Stage 3 Land Value
Land value should be arrived at by having regard to values prevailing in the locality and, in the first instance, reference should be made to the R2023 Land Value Practice Note.
Where the site area is considered excessive for the current requirements of the conference centre, a lower substitute site area, should be adopted. Extensive garden and play areas etc. should be added as undeveloped/amenity land. In all other cases the actual site area should be valued.
4.9 Stage 4 De-capitalisation Rate
The Adjusted Replacement Cost (ARC) of the hereditament shall be de-capitalised to an annual equivalent by taking the prescribed rate. Conference centres should not be considered as “wholly or mainly” educational within the meaning of The Non-Domestic Rating (Miscellaneous Provisions) (No. 2) Regulations 1989 (as amended) As such they should attract the higher de-capitalisation rate.
4.10 Stage 5 End Adjustments (“Stand Back and Look”)
Any advantage or disadvantage, which might affect the rental value but not the capital cost should be reflected at this stage. An adjustment under this head should not duplicate adjustments made elsewhere.
Appendix A
Unit Costs, Cost Guide Reference and Building Use Classification
| Higher Quality CoreAreas | Higher Quality Conference/Exhibition Space | Lower Quality Core Areas | Lower Quality Conference/Exhibition Space |
|---|---|---|---|
| £2,102 | £1,770 | £1,610 | £1,389 |
| Val ID 9394 | Val ID 9395 | Val ID 9396 | Val ID 9397 |
| CG code 42AB01 | CG code 42AB02 | CG code 42AB03 | CG Code 42AB04 |
In the case of exceptionally high-quality accommodation, a significantly higher rate may be applied.
Appendix B
Addition for External Works
An addition for external works will be made in the case of conference centres within the range of 2.0% - 12.5%. The following percentages would typically apply but are not intended to be prescriptive.
| % Addition | Building ratio*/description |
|---|---|
| 2% | Town centre or island site typically with an 90% or greater building ratio, no more than a small yard or garden area, and either no car parking, or a very limited number of spaces within the hereditament. |
| 2.5% | As above, but typically with an 80% to 90% building ratio, limited parking, external lighting and landscaping and some boundary fencing. |
| 5% | Site typically with 50%/75% building ratio, some landscaping around buildings, secure boundary fencing, adequate parking, external lighting and landscaping with limited general parking within the hereditament and boundary fencing. |
| 7.5% | As above, but typically with 25%/50% building ratio, landscaping around buildings, secure boundary fencing, external lighting, adequate parking within the hereditament which falls short of full requirements. |
| 12.5% | Site typically with about 25% building ratio, landscaping around buildings, secure boundary fencing, external lighting and adequate parking within the hereditament for all staff and other users. |
Appendix C
Location adjustment
N.B. The Regions referred to are administrative areas and are not significant boundaries.
| NORTH EAST REGION | NORTH WEST REGION | |||
|---|---|---|---|---|
| Durham County | 0.91 | Cheshire | 0.97 | |
| Northumberland | 0.95 | Greater Manchester | 0.97 | |
| Tees Valley | 0.94 | Lancashire | 0.97 | |
| Tyne & Wear | 0.91 | Merseyside | 0.97 | |
| Cumbria | 0.98 | |||
| YORKSHIRE & HUMBERSIDE REGION | SOUTH WESTERN REGION | |||
| East Riding and North Lincolnshire | 0.92 | Cornwall | 1.05 | |
| North Yorkshire | 0.98 | Devon | 1.01 | |
| South Yorkshire | 0.94 | Dorset | 1.04 | |
| West Yorkshire | 0.92 | Gloucestershire | 1.03 | |
| North Somerset | 1.02 | |||
| Somerset | 1.01 | |||
| Wiltshire | 1.03 | |||
| EAST MIDLANDS REGION | WEST MIDLANDS REGION | |||
| Derbyshire | 1.05 | Herefordshire | 0.92 | |
| Leicestershire and Rutland | 1.04 | Shropshire | 0.95 | |
| Lincolnshire | 1.03 | Staffordshire | 0.94 | |
| Northamptonshire | 1.09 | Warwickshire | 0.98 | |
| Nottinghamshire | 1.03 | West Midlands | 0.95 | |
| Worcestershire | 0.98 | |||
| EAST OF ENGLAND REGION | SOUTH EAST REGION (EXCL. LONDON) | |||
| Bedfordshire | 1.04 | Berkshire | 1.08 | |
| Cambridgeshire | 1.00 | Buckinghamshire | 1.07 | |
| Essex | 1.03 | East Sussex | 1.09 | |
| Hertfordshire | 1.07 | Hampshire | 1.05 | |
| Norfolk | 0.96 | Isle of Wight | 1.05 | |
| Suffolk | 0.97 | Kent | 1.09 | |
| Oxfordshire | 1.04 | |||
| Surrey | 1.13 | |||
| West Sussex | 1.08 |
| WALES | CENTRAL LONDON SOUTH | |||
|---|---|---|---|---|
| North Wales | Lambeth | 1.28 | ||
| Flintshire | 0.89 | Southwark | 1.28 | |
| Conwy | 0.93 | Wandsworth | 1.30 | |
| Denbighshire | 0.90 | |||
| Gwynedd | 0.97 | GREATER LONDON NORTH EAST | ||
| Isle of Anglesey | 0.95 | Hackney | 1.25 | |
| Wrexham | 0.91 | Haringey | 1.31 | |
| Newham | 1.18 | |||
| Mid Wales | Tower Hamlets | 1.26 | ||
| Carmarthenshire | 0.98 | Barking and Dagenham | 1.18 | |
| Ceredigion | 0.99 | Enfield | 1.18 | |
| Powys | 0.97 | Havering | 1.09 | |
| Pembrokeshire | 0.92 | Redbridge | 1.15 | |
| Waltham Forest | 1.18 | |||
| South Wales | GREATER LONDON NORTH WEST | |||
| Blaenau Gwent | 0.96 | Barnet | 1.23 | |
| Bridgend | 0.93 | Brent | 1.22 | |
| Caerphilly | 0.93 | Ealing | 1.27 | |
| Cardiff | 0.94 | Harrow | 1.18 | |
| Monmouthshire | 0.99 | Hillingdon | 1.16 | |
| Neath Port Talbot | 0.88 | Hounslow | 1.16 | |
| Newport | 0.95 | |||
| Rhondda, Cynon, Taff | 0.93 | GREATER LONDON SOUTH EAST | ||
| Swansea | 0.93 | Bexley | 1.25 | |
| Torfaen | 0.91 | Bromley | 1.21 | |
| Vale of Glamorgan | 0.97 | Croydon | 1.24 | |
| Greenwich | 1.24 | |||
| CENTRAL LONDON NORTH | Lewisham | 1.21 | ||
| Camden | 1.32 | |||
| City of London | 1.24 | GREATER LONDON SOUTH WEST | ||
| Hammersmith & Fulham | 1.32 | Kingston Upon Thames | 1.26 | |
| Islington | 1.29 | Merton | 1.24 | |
| Kensington & Chelsea | 1.34 | Richmond Upon Thames | 1.22 | |
| Westminster | 1.30 | Sutton | 1.20 | |
Appendix D
Contract Size Adjustment
The adjustment for contract size should be made having regard to the total ERC (after adjustment for location but before the addition for fees) in accordance with the following scales:
| ERC £ | % Adjustment |
|---|---|
| Up to 0.25 million | + 10% max |
| 0.5 million | 8% |
| 0.75 million | 6% |
| 1.0 million | 4% |
| 1.5 million | 3% |
| 2.0 million | 2% |
| 3.0 million | 1% |
| 4.0 million | 0% |
| 5.0 million | -0.5% |
| 6.0 million | -1% |
| 8.0 million | -1.5% |
| 10.0 million | -2% |
| 15.0 million | -3% |
| 18.0 million | -4% |
| 20.0 million | -5% |
| 25.0 million | -6% |
| 35.0 million | -9% |
| Over 40.0 million | - 10% MAX |
| NB. Intermediate figures may be interpolated. |
Appendix E
The addition for fees
Fees should be added at the percentages shown in the VOA published Cost Guide at Section 7. For convenience these are shown below inclusive of the 2% complexity addition which represents the mid-range addition, however the fee addition should have regard to the nature of the building under consideration. Note that minimum fees may apply to counter inversion.
| Size of Contract | % Adjustment |
|---|---|
| Sums up to £750,000 | 14% |
| £750,000 to £1,499,000 | 13.5% |
| £1,500,000 to £3,999,999 | 11.5% |
| £4,000,000 to £7,499,999 | 10.5% |
| £7,500,000 to £14,999,999 | 9.5% |
| Over £15,000,000 | 9% |
Appendix F
Age and obsolescence scales
Table 1: Civic Buildings Obsolescence Allowances
| Age | % Obsolescence | Age | % Obsolescence |
|---|---|---|---|
| 2023 | 0.00% | 1986 | 43.75% |
| 2022 | 0.75% | 1985 | 44.50% |
| 2021 | 1.50% | 1984 | 45.00% |
| 2020 | 2.50% | 1983 | 48.00% |
| 2019 | 3.50% | 1982 | 51.00% |
| 2018 | 4.75% | 1981 | 54.00% |
| 2017 | 6.00% | 1980 | 56.75% |
| 2016 | 7.25% | 1979 | 57.25% |
| 2015 | 8.50% | 1978 | 57.50% |
| 2014 | 10.00% | 1977 | 58.00% |
| 2013 | 11.25% | 1976 | 58.25% |
| 2012 | 12.75% | 1975 | 58.50% |
| 2011 | 14.25% | 1974 | 58.50% |
| 2010 | 15.75% | 1973 | 58.75% |
| 2009 | 17.25% | 1972 | 59.00% |
| 2008 | 18.75% | 1971 | 59.00% |
| 2007 | 20.25% | 1970 | 59.25% |
| 2006 | 21.75% | 1969 | 59.25% |
| 2005 | 23.25% | 1968 | 60.00% |
| 2004 | 24.50% | 1967 | 60.00% |
| 2003 | 26.00% | 1966 | 60.00% |
| 2002 | 27.50% | 1965 | 60.00% |
| 2001 | 28.75% | 1964 | 60.00% |
| 2000 | 30.00% | 1963 | 60.00% |
| 1999 | 31.25% | 1962 | 60.00% |
| 1998 | 32.50% | 1961 | 60.00% |
| 1997 | 33.75% | 1960 | 60.00% |
| 1996 | 35.00% | 1959 | 57.50% |
| 1995 | 36.00% | 1958 | 55.00% |
| 1994 | 37.00% | 1957 | 55.00% |
| 1993 | 38.00% | 1956 | 55.00% |
| 1992 | 39.00% | 1955 | 55% |
| 1991 | 40.00% | 1954 | 55% |
| 1990 | 40.75% | 1953 and earlier | 55% |
| 1989 | 41.50% | ||
| 1988 | 42.25% | ||
| 1987 | 43.00% |
1. Market Appraisal
Conferences and exhibitions are an extremely important part of the visitor economy. The sector is worth £30.9 billion annually in terms of direct spending by delegates, attendees, and organisers[1]. The UK conference and exhibition market is highly competitive, with many different types of venue competing to accommodate events. These include purpose-built conference and exhibition centres, hotels, academic institutions, visitor attractions, and sports venues. In addition to venues, the sector comprises a wide variety of other ‘players’, including conference and exhibition organisers, venue-finding agencies, audio-visual suppliers, catering and hospitality companies, IT specialists, and security companies.
The conference market can be segmented as follows:
-
International association conferences: This market includes a wide range of events, including medical, scientific, trade organisations, charities, political parties, and professional bodies. Most conferences are held at regular intervals (e.g., annual, biennial, etc.) and rotate between different venues/destinations. These events are termed peripatetic. The lead time is an important consideration for venues and destinations when bidding and planning for events. International association conferences typically have a relatively long lead-time (e.g., often as much as three or four years).
-
National association conferences: These events are broadly similar to international association conferences in terms of type of conference. There is also intense competition to attract them. The lead time is generally shorter at approximately two or three years. There are c. 6,800 trade associations, societies, institutes, and other voluntary bodies in the UK[2].
-
Corporate conferences: These involve internal company meetings as well as company annual general meetings, product launches and sales meetings. They include those events which are planned and organised up to 12 months in advance, as well as other meetings with shorter lead times (one to three months).
Many of the largest purpose-built conference and exhibition centres in the UK are owned and operated by local authorities, either directly or via ‘arm’s length’ companies. These include Manchester Central (Manchester City Council), Edinburgh International Conference Centre (Edinburgh City Council), Scottish Exhibition and Conference Centre (Glasgow City Council), Liverpool Arena and Conference Centre (Liverpool City Council), Harrogate International Centre (Harrogate Borough Council), and Bournemouth International Centre (Bournemouth Borough Council). However, there are examples of privately-owned, large-scale venues such as ExCel in London, and Event City in Manchester. Until early 2015, the NEC Group was owned by Birmingham City Council.
Because of market competition, the diversity of venue types, the commercial/economic development objectives of their owners, event programmes, income streams and operating costs the operating profit varies markedly from venue to venue. Whereas some generate operating profits, others have been shown to trade with operating losses requiring revenue subsidies from the local authority (if that local authority is the venue’s owner).
2. Changes From The Last Practice Note
There are no significant changes to the approach to valuation, as the modern substitute has always been valued and external works and fees have always been added separately,
3. Ratepayer Discussions
No discussions have so far been held either with ratepayers or their representatives and none are anticipated.
Valuation Method
The receipts and expenditure basis of valuation should be adopted only in cases where the hypothetical tenant’s sole motive for occupation is for profit. Conference and exhibition centres that do not make a profit should be valued using the contractor’s method.
There may be instances where a public body is or has been involved with the funding or running a venue which makes a profit, although the level may not be sufficient to reflect the true value to the hypothetical tenant, due to the associated socio-economic benefits. In these circumstances the contractor’s basis should be applied.
The costs shown in Appendix 1 are for ease of reference. In all cases where a Cost Guide code is shown, that must be input into the NBS template, not the costs shown here. Where the Cost Guide code shows options, the costs shown in this Practice Note should be used to aid selection.
Should the Cost Guide show differing costs to those shown in a current version of this Practice Note, please refer to the CCT.
4.1. Building Costs
The cost guidance to be adopted for core areas and conference and exhibition space is in the Cost Guide and Appendix 1. The costs specified are exclusive of external works and professional fees.
4.2. Location Factors
All costs will be adjusted for location in accordance with the R2017 Cost Guide.
4.3. Allowance for Obsolescence and build quality
Age and obsolescence allowances should be applied in accordance with the appropriate scale in the Rating Manual: section 4 part 3.
4.4. External Works Addition
External works will be added according to Appendix 2
4.5. Fees
Professional fees will be added to the unit building costs at the percentages shown in the
Cost Guide.
4.6. Contract Size Allowance
A contract size allowance will be applied in accordance with the Cost Guide
4.7. Land Value
Developed land consists of the footprint of all buildings, associated landscaped areas, roadways, car parks, hardstandings and paths. The value of this category of land will be taken at the prevailing alternative use in the locality. The disadvantage caused by the land being encumbered by older buildings is reflected in an allowance derived from the adjusted ERC
4.8. Developed Land
The capital values to be ascribed to Developed Land should relate to the prevailing land use in the locality and, in the first instance, reference should be made to the appropriate land values in the 2017 Land Valuation for the Contractor’s Basis Practice Note Rating Manual: section 6 part 3 - section 1200.
4.9. Stage 5 End Allowances
Any advantages or disadvantages which might affect the value of the occupation of the hereditament as a whole should be reflected at this stage. An adjustment under this heading should not duplicate adjustments made elsewhere. Allowances may be made for exceptional dispersal, poor layout, piecemeal development, etc.
4.11. Decapitalisation
The adjusted cost, net of allowances and including land value, is to be decapitalised at the higher prescribed rate.
APPENDIX 1
Unit Costs, Cost Guide Reference and Building Use Classification
Higher Quality Core Areas |
Higher Quality Conference/Exhibition Space
|
Lower Quality Core Areas |
Lower Quality Conference/Exhibition Space |
|
£1,900
42AB01 |
£1,600
42AB03 |
£1,455
42AB03
|
£1,255
42AB04 |
In the case of exceptionally high quality accommodation, a significantly higher rate may be applied.
APPENDIX 2
External Works Addition
Classification |
Description |
Percentage Addition |
Restricted Site |
Town centre or island site, typically with 90% or greater building ratio, no more than a small yard or garden area, and either no car parking or a very limited number of spaces |
2 |
As above, but typically with an 80-90% building ratio, limited parking, external lighting and landscaping and some boundary fencing |
2.5 |
|
Intermediate Site |
Site typically 50-75% building ratio, some landscaping around buildings, secure boundary fencing, adequate parking and external lighting |
5
|
As above, but typically with 25 – 50% building ratio, landscaping around buildings, secure boundary fencing, external lighting, adequate car parking which falls short of full requirements |
7.5 |
|
Extensive Site |
Site typically with about 25% building ratio, landscaping around buildings, secure boundary fencing, external lighting and adequate parking for all staff and visitors |
12.5 |
Notes
-
The plot ratio is the building GIA expressed as a percentage of the total site area (including building footprint).
-
An appropriate percentage addition should be chosen from the above ranges to reflect the extent of external works within the hereditament using plot ratio as an indicative guide only.
[1] Business Visits and Events Partnerships (2014) Events are Great Britain – A report on the size and value of Britain’s events industry, its characteristics, trends, opportunities and key issues.
[2] Directory of British Associations (2014)
There may be circumstances where the conference centre is completed, but it forms part of a larger scheme for an area, and this is not yet finished eg a shopping arcade, swimming pool, hotel have yet to be built. In these circumstances the VO may grant an appropriate allowance until the development of the whole is completed.