Wholesale warehouses
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
1.1 This Rating Manual section deals with wholesale warehouses, also known as a “cash and carrys”.
1.2 Small warehouses used by trade wholesalers (e.g. fish, flower, newspaper wholesalers) should not be included within the wholesale warehouse SCAT class. These should be valued as general industrials with the appropriate SCAT code (e.g. 096G or 268G).
1.3 The bulk class of this category of property should be W.
1.4 The following characteristics are typical of a wholesale warehouse:
- sui generis planning consent for wholesale cash and carry warehouse use or class B8; storage or distribution, planning permission
- membership is required, restricted to trade only or selected employment groups (membership fee optional)
- excludes the general public
- open 7 days a week with early shopping hours
- large car park
Primary Description Code: CW
List Description: overwrite as ‘Wholesale Warehouse and Premises’
SCAT code: 301
As a Generalist Class, the appropriate suffix letter should be G.
3.1 This class should be dealt with by caseworkers in Regional Valuation Units and National Valuation Unit Inner London who are responsible for the correct survey and valuation of the class. On occasions, due to size or co-location with large distribution warehouses dealt with by the National Valuation Unit, it may be appropriate for them to be dealt with by that Unit; when that is the case, the SCAT suffix should be S.
3.2 When advice is required, please contact the Regional Industrial Class Co-ordination Team (CCT).
4.1 The CCT has overall responsibility for the co-ordination of this class. The team is responsible for approach, accuracy and consistency of valuations and will check valuations to ensure they accord with the recommended valuation methodology The team will deliver tne Practice Note prescribing the valuation basis for Revaluation and provide advice as necessary during the life of the rating lists.
Caseworkers and referencers have a responsibility:
- to follow the advice given at all times
- not to depart from the guidance given when dealing with Checks, Challenges or Appeals (CCA) or maintenance work without approval from the CCT
- to seek advice from the CCT if there are any doubts or queries when starting new work
5.1 There are no particular legal issues relating to this class of property.
5.2 Planning permission usually contains conditions as described in 1.4 above.
6.1 Method of survey should be GIA in accordance with VOA code of measuring practice.
6.2 Plant and Machinery (P&M): in accordance with SI 2000 No 540 (The Valuation for Rating (Plant and Machinery) (England) Regulations 2000), items that may be included within the P&M section of the survey data on RSA are: security cameras, lifts, travellators, sprinklers, air conditioning, and standby generators/compressors.
6.3 The national sublocation code ‘WSWH’ must be used for all Wholesale Warehouses which have been correctly allocated to SCAT 301G. This will enable improved co-ordination across England and Wales.
6.4 Accommodation use codes should be applied in accordance with the VSA Standards Guidance for Industrial premises. It is good practice to overwrite the default description when WHS line use code is used for the wholesale sales area, accessed by the general public who have membership cards for the occupying wholesaler. The default description to be used should be ‘Wholesale Sales Area’.
6.5 It is likely that the main wholesale sales areas in most wholesale warehouses will have a floor finish which is superior to that for general warehousing as well as other features that make the main space more conducive to wholesale sales. Any features or differences in internal and external quality or location which distinguish the wholesale warehouse from general local warehousing should be noted.
6.6 All land which does not form part of customer or staff parking areas should be data captured as an ‘Other Addition’ using the codes LFH, LFG, LFU, LOH, LOG or LOU as appropriate and following the local scheme for the treatment of ancillary storage land.
6.7 All car parking must be data captured within the Car Parking fields within the survey data on RSA. This is irrespective of whether the car parking is used by staff or customers.
7.1 Surveys should be recorded in EDRM.
7.2 As the rentals approach to valuation should be used for all Wholesale Warehouses, survey data details should all be captured in RSA.
8.1 All Wholesale Warehouses should have their own valuation scheme rather than be included in general industrial schemes.
8.2 The Regional Industrials CCT has set up three new address matrices across England and Wales as outlined in the Practice Note. These matrices cover Inner London, the rest of England and all of Wales. The CCT has populated all these matrices with the addresses of all Wholesale Warehouses and any new assessments and new addresses must be added to the appropriate matrix.
8.3 The CCT has also set up all analysis and valuation access paths for Wholesale Warehouses. Analysis and valuation of all Wholesale Warehouses must be carried out using these national analysis and valuation access paths for each rating list.
8.4 Survey data must be captured as outlined in section 6 above to enable accurate analysis of rents and subsequent valuation.
8.5 Notwithstanding the decision referred to in section 8.8, open market rental evidence reviewed by the Regional Industrials CCT suggests that higher rents are paid for Wholesale Warehouses than for general warehousing. These rents suggest that headline prices per m2 are commonly over 20%- and occasionally over 30%- higher than for local warehousing in the locality. Each wholesale warehouse should be valued on its own merits, taking into account rents on wholesale warehouses, whilst being mindful of valuations applied to local, generally inferior, general warehousing values. Regard should be had to the quality of the wholesale warehouse space, reflecting any increased prominence or accessibility compared to the local general industrials should be reflected in the valuation.
8.6 Other Additions tables adopted within Valuation Schemes should be the same as the local ones used for general industrials and warehousing. The CCT has ensured that access paths are populated with the appropriate Other Additions table for the locality. The land element within Other Additions tables will be compounds separated from car parking by gates, fencing or walls, with no access to the general public. All other land should be data captured as car parking.
8.7 In most cases, car parking should be reflected in valuations. There is no distinction between customer and staff parking in the survey data so any car parking, whether for staff or customers, should be data captured within the Car Parking fields on RSA. It is accepted that, in certain circumstances, an addition may be appropriate for car parking: however, these will be exceptions to the rule where such property attributes vary significantly from the typical beacon characteristics of wholesale warehouses of a similar age and specification. The exceptions may be where the land for car parking is significantly larger than the footprint of the wholesale warehouse building itself, including where multi-storey car parks are on site.
8.8 Specialist supermarkets which concentrate on the cuisine from a single country and which do not require membership to shop at the store, should be data captured and valued in line with other hypermarkets and supermarkets as SCAT 139S. Where membership is required, please consult with the Regional Industrials CCT.
8.9 For all wholesale warehouses with SCAT code 301, the case of Makro v Brennan [1996] LT RA 341 contains useful guidance.
- Rating Support Application (RSA)
- SurvAid
- Regional Industrial Class Co-ordination Team (CCT)
- Data and Valuation Encyclopaedia (DAVE)
1. Market appraisal
1.1 There is rental evidence for this property class. However, care must be taken to identify and discount those rents where reviews are based on fixed increases. some based on a set percentage increase at review, others having a rent at each review agreed at the start of the lease.
1.2 Merger activity in the last couple of years has been a factor driving a degree of consolidation within the sector.
1.3 Media comment indicates a recent change in the role of cash and carry operations, with research indicating that the percentage of trips to cash and carry outlets for the “main shopping mission” has declined due to increasing ‘delivered wholesale’ (i.e. wholesalers delivering to the customer), and that the majority of trips to cash and carry are now for “top up” reasons.
1.4 It is reported that grocery wholesaling continues to face “wholesale bypass” – that is where large retailers buy directly from manufacturers rather than through wholesalers. Other trends have benefitted the sector, such as rising health consciousness increasing demand for healthier products; and also increased demand for prepared meals due to busy lifestyles.
1.5 Online and digital services are a growing factor, with both “click and collect” and delivery of online orders being offered by some operators. ‘Delivered wholesale’ does have costs attached such as vehicles, drivers and credit.
2. Changes from the last practice note
2.1 Market appraisal of the sector.
2.2 Specific instructions as to analysis/valuation scales and address matrix to adopt have been included.
3. Ratepayer discussions
3.1 No discussions have been held with any ratepayer representatives or trade bodies. Values will be based on local and Unit-wide rental evidence.
4. Valuation scheme
4.1 Analysis and valuation scales should be R2023 A1FGIA1 and V1FGIA1 respectively.
4.2 National set matrix A1WWSWH1 should be used for valuation.
| Data capture and referencing guide: wholesale warehouses | |
| Background | Units should consider whether they have in place up-to-date rental information and accurate surveys to enable reliable analysis and valuation. |
| General |
These guidelines are for properties comprising the “National Set”. Any differential in respect to normal warehousing should be noted in respect of quality/finish/fit, etc. It is essential that the customer car parking is captured as “other addition” rather than as “car parking” and captured using the codes LFH, LFG, LFU, LOH, LOG or LOU as appropriate. The local approach to additional land with warehousing should then be adopted. Location should be noted to compare with general industrials in terms of whether situated in more prominent/accessible position. |
| Bulk class | W |
| Survey method | The survey method to be input on RSA is GIA. |
| Sub-location | The National Set should be sub-located as WSWH. |