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 Draft No. 3
Issue Date 28/01/2009
Approved 28/01/2009

Property of the Assessor for Central Scotland

For the use of Authorised Staff only

2010 REVALUATION
VALUATION OF SHOPS

LOCAL REPORT

Instruction to Valuation Staff

1.0 1.0 INTRODUCTION

This Report deals with the survey and valuation of all classes of retail
shop, the application of the zoning principle, the use of reduction factors,
the selection of Zone A rates and their application and variation.

2.0 SUBJECTS INCLUDED

2.1 All properties having the physical characteristics of a retail shop

and generally used for retail trade i.e. supplying the general public
or “the trade” with goods or services will fall within the retail
category. There will be one or more display windows or display
cases. Internally there will usually be found a counter and/or goods
displayed for sale.

2.2 Where the physical elements noted in 2.1 are present the property
in question may be termed "shop" premises. However, although
physically reflecting retail property the use may be varied, eg.
launderettes, salons, studios, surgeries, offices, building societies
etc.
 According to the “Actual State” rule property must be valued in its
actual state taking account of its actual physical character and of
the use to which it is put.

It does not necessarily follow from this that where premises,

physically similar but which are put to different uses, are found in
the same locality the level of value, or indeed, the method of
valuation, must differ.

It should be adopted as general practice that if the premises are in

a recognised shopping thoroughfare or street where demand is
buoyant, the level of value will, regardless of the “modus operandi”
of the occupant, be determined by the rental level achieved for the
generality of retail properties in that area.

3.0 3.0 SURVEY AND MEASUREMENT

All measurements and area calculations should be in terms of

metres; any properties surveyed or resurveyed should be
measured in metres only. The RICS Code of Measuring Practice
(6th edition) should be followed in all cases. Note that shops should
be measured to the “shell", i.e. to the inside of permanent walls and
not to the shop fitting, and to the building line at the front, not the
glass line. Areas to be excluded when arriving at a Net Internal
Area are as follows:-

• All stairs and stair wells

• Lift wells and escalators
• Structural Partitioned Corridors used exclusively as a fire
escape.
• Corridors used by more than one occupier
• Plant rooms (i.e. service plant). Where partly used as storage a
pro rata area should be included. Process plant rooms e.g. dry
cleaners or bakers should be included.
• Internal partitions where over 150mm (6 inches) thick
• Structural pillars, columns, etc
• Staff toilets (extra toilets provided for the use of the public
should be included)
• Disabled staff toilets provided to comply with Disability
Discrimination Act.

Further relevant information is provided at Appendix 1 and

Appendix 2
4.0 ZONING
4.1 Principle of Zoning
Once surveyed and measured, the area of the shop is to be
calculated on a zoned basis.

With the comparative principle of valuation where like is compared

with like in order to establish values and level of values, it is
recognised that some parts of a building are consistently less
valuable than others.

For shops it is accepted that the front space of a shop is usually of

considerably higher value than areas to the rear based on the fact
that more customers will see/visit this part of the shop than those
areas further back. Likewise space on the ground floor is usually
more valuable than space on upper or lower floors even when
improved means of access are provided. Anything that disrupts the
customer flow e.g. thick walls with a narrow opening, or a flight of
steps will reduce the value of the space beyond the obstruction.
Also if parts of the property are hidden from the customer's view
due to the structural layout of the property then this should be
reflected in the zoning (See 7.2.4). If the obstruction is due to a
non-structural feature e.g. stud partitioning or an artificial change in
level, this should be ignored when zoning the property.

“Zoning” is therefore a method of accurately attributing different

levels of value to the various parts of a property; so that
comparison can be made between shops of different size and
shape in a stretch?

4.2 Zone Depth

All retail property is to be zoned on the basis of each zone being
9.14m deep. If part of a zone is affected by an obstruction then a
lower percentage should be applied to that part of the zone but the
overall zone depth will remain at 9.14m. Any areas within a zone
that are taken at a lower percentage than the main part of the zone
shall be shown with the relevant zone letter together with a
numerical suffix e.g. B1, B2 etc and not shown with the next zone
letter. There should be no more than three zones of 9.14m depth
referred to as Zones A, B and C. Any area more than 27.42m from
the building line should be taken as a single zone, classified Zone
D, irrespective of the depth of the area (See also 7.2.5). Each
upper or lower floor is to be taken as a single zone. Valuers should
not deviate from the standard zoning depths without very careful
thought and any proposed deviations should be referred to your
Assistant Assessor or Practice Note Author.
5.0 REDUCTION FACTORS

5.1 General
Having established the zones within a retail property the next stage
is to attribute reduction factors in order to establish proportions of
value and to reflect the different quality and uses of accommodation
within zones.

Remember that at all times the principal and most important zone is
the front zone of the shop. The value of all other zones and
differing uses etc. is expressed as a factor/proportion of this
principal zone.

5.2 Dual Frontage

Where a shop has two or more entrances from different streets, the
area should be calculated zoning from each entrance. Where the
zones from each entrance stop will be determined by the layout of
the particular shop.

5.3 Zoning/Floor Factors

Adjustments may be necessary to these factors to reflect the size,

shape and quality of finish of the floor concerned (see para 7.2)

The factors to be applied to the upper and lower floors assume stair
access and reflect primarily the use of the accommodation with
appropriate additions being made for Public Lifts and Escalators.
Stock areas also include basic ancillary office accommodation, e.g.
managers office and staff room. Where there is more extensive
office accommodation e.g. banks and insurance companies good
quality office accommodation should be valued as at the same
reduction factor as sales space. In mixed retail and office locations
regard should be had to the office scheme of value as a check.

Where both public lift and escalator access are provided then the
higher of the two % additions should be made.

Ground Floor

Zone
A 1.000
B 0.500
C 0.250
 D 0.125

Upper/Lower Floors

Floor level Stair Access Stair Public Lift Escalator

Access
Stock/Shell Sales
Quality Quality
Basement/FF 0.1 0.125 +10% +20%
2nd Floor 0.05 0.062 +10% +20%
3rd Floor 0.025 0.031 +10% +20%
4th Floor 0.012 0.016 +10% +20%

Other Floors

At the discretion of the Valuer

6.0 STRETCH RATES

6.1 Definition of stretch

A stretch is an area within which the same general level of value –
the stretch rate – should be applied, and it is recognised practice
that shops and shopping locations be grouped into such stretches.

A stretch may comprise the whole or part of a street, and a “cluster”

or a group of shops in the more suburban or rural situations. For
properties which are situated in "one off" locations an individual rate
may be appropriate.

6.2 Rates to be applied

The stretch rate to be applied will be that proposed for the shops
most representative of the whole stretch. Where the rents for the
properties are “shell” rents these should be adjusted to reflect shop
fitting. However additions for shop fit exclude air conditioning and
sprinklers which will now be added separately by the valuer.

While valuers should be led by open market rental evidence to

indicate the extent and value of the stretch rate there may be, in
certain locations, insufficient evidence to give a clear indication
where breaks occur. In these circumstances, such criteria as
physical breaks, changes of shop style, and position within the
overall pattern i.e. end or start of a long shopping thoroughfare,
should be taken into consideration.
 In the absence of conclusive rental evidence within any stretch, the
valuer may select a rate derived from the rent supported rate of a
comparable stretch in the immediate vicinity or from a comparable
stretch in a more remote but similar situation.

6.3 Hot Food outlets

Hot food takeaways are identified in the Use Classes Order

(Scotland) 1997 as (Class 3) Sui Generis use. Such establishments
raise somewhat different environmental issues to Restaurants and
Cafes (Class 3) and Sandwich Shops (Class 1). Issues include
litter, noise, longer opening hours and extra traffic and pedestrian
activity. It is generally quite difficult to obtain planning permission
for hot food takeaways due to the need for parking, possible
adverse environment effects and the need to vent odours with an
external flue.

Rental analysis has indicated that in the majority of cases hot food
outlets command significantly higher rents than other retail uses in
the same location. For this reason it is proposed that an addition be
made to the basic rate to reflect hot food use.

Therefore where a hot food use can be established (generally

evidenced by an external flue) and rents in the same or a
comparable location indicate a premium paid for such permitted
use an addition of up to 10% may be added to the basic rate for the
hot food outlet.

7.0 ADJUSTMENT TO ZONING FACTORS & END

ALLOWANCES/ADJUSTMENTS

7.1 General
Having determined the stretch boundaries, the level of value to be
applied within that stretch, and the “norm” shop for that stretch,
initial basic values can be calculated based on the ITZA (In Terms
of Zone A) area.

The next step is the adjustment of that value to reflect specific

features particular to an individual shop.

Remember that “adjustments” should only be made where there

exists a feature which affects value and which is not present in the
vast majority of other shops within the stretch.
 If valuers find that the majority of units within a stretch require some
form of end adjustment to value, they must re-examine the criteria
being used to establish the “tone” or norm for that stretch and also
investigate the accuracy of the information used to establish the
stretch itself. Any proposed change to basic rate should be referred
to Assistant Assessor or Practice Note Author.

7.2 Adjustments to Zoning Factor

Adjustments may be necessary to the factors referred to in 5.0 for
several reasons. In all cases care should be taken to ensure
uniformity throughout the Central Scotland Valuation Area.
Examples of such adjustments are:

7.2.1 Corner Frontages

Analysis shows that up to 10% may be added to those zones
affected; however, this will be determined by the length of
the display window to the return frontage, and quality of
street on which the return front faces.

7.2.2 Different Frontage from the Stretch "Norm"

If affecting the whole shop this should be reflected as an end
allowance/addition of up to 10% of the shop value depending
on how different it is from the "norm" and not applied to
individual zones (see 7.3.1). If however only part of the shop
is affected, then the allowance/addition should only be
applied to those zones affected. If applying to part only the
allowance/adjustment should only be given in accordance
with the criteria set out in 7.3.1

7.2.3 Shape
Zoning may be adjusted where an extremely irregular shape
works as a disadvantage. A maximum allowance of 10% per
affected zone may be given, following consultation with your
Assistant Assessor or Practice Note Author.

7.2.4 Masking
An allowance of up to 10% should be given to any area
masked from view from the front. How far back the
allowance should be given depends on the individual
circumstances, but a rough guide would be the depth of the
ingo (see Appendix 2).

7.2.5 Shop Depth

 Where Zone D is greater than 12m deep or if the shop is
wider than it is deep, valuers should consult with their
Assistant Assessor or Practice Note Author to determine if
an allowance is appropriate.

7.2.6 Large Upper/Lower Floors

Where the unreduced area of an upper or lower floor is more
than twice the ITZA area of the ground floor then the
reduction factor for that floor should be adjusted in
accordance with the following table.

Floor Ratio to GF Reduction to Floor

(ITZA) Factor
2.0 0
2.5 4
3.0 25
3.5 30
4.0 40
4.5 45
5.0 55
5.5 60

Where the upper or lower floor is more than six times the
ITZA of the ground floor the above does not apply. In these
circumstances the valuer should consult with their Assistant
Assessor or Practice note Author as the zoned retail
approach may not be appropriate.

7.3 End Allowances/Adjustments

7.3.1 Different Frontage from the Stretch "Norm"

An addition or allowance may be made where the particular
shop front is significantly better or poorer than the norm for
that stretch. Valuers should be aware of the recognised
norm in terms of the rental analysis for each stretch. It must
be emphasised that this is for structural differences, not the
style of the front. The ideal is for a clear, uninterrupted front
without pillars or stone dados. Where a shop is significantly
different from the norm, an addition or allowance of up to
10% may be given. The maximum percentage is for
extreme cases where there is a house type front in a stretch
of good clear fronts, or vice versa.

Staff should check what let properties were used to

determine the stretch to establish what is the norm shop front
for the stretch prior to undertaking valuation adjustment.
 7.3.2 Services
All shops should have, by law, adequate heating, lighting and
toilet facilities. Some older shops may not have adequate
toilet facilities and, where this is known to be the case and
the norm for the stretch is full toilet provision an end
allowance should be granted. Where there is an outside
toilet, possibly shared, an allowance of 2.5% may be made.
If there are no toilet facilities available to the shop an
allowance of 5% may be made.

Staff should check what let properties were used to

determine the stretch to establish what is the norm for the
stretch prior to undertaking valuation adjustment

7.3.3 Layout Deficiencies

No end allowance should be given for this, as the adjustment
of individual zones should have fully compensated for any
problems. It may be, however, where there are several
shops occupied as one, that an end allowance will be
appropriate. Care must be taken to prevent double
allowances.

7.3.4 Air conditioning and sprinklers.

Where a shop benefits from air conditioning or sprinklers to

all or part of the floor area, an addition should be made
based on the gross area benefiting from these services as
per the following table:

Item Rate
Air-conditioning (based £7/m2
on cassette system)
Sprinklers £3/m2

8.0 QUANTUM & INVERSE QUANTUM

The rental analysis showed that where a let shop differed significantly in
size from the other let shops in the stretch then there was a differential in
the rate/sq.m. Allowance should therefore be made in the valuation of the
subjects, based on the following tables.
 Quantum

Times Average Percentage Deduction

2.00 0%
2.20 2%
2.40 4%
2.60 6%
2.80 8%
3.00 10%
3.25 12%
3.50 14%
3.75 16%
4.00 17%
4.25 19%
4.50 20%
4.75 22%
5.00 23%

Inverse Quantum

Times Average Percentage Addition

Up to 0.49 10%

To determine the appropriate allowance the valuer should look at the

average size of the let shops used to set the rate/sq.m. for the
stretch, which is shown in the background information table. In those
limited number of locations where there is no direct rental evidence then
the average size of let shop in the closest comparable stretch with let
shops should be used. Where a shop is more than five times the size of
the average let shop, used to set the rate, the valuer should consult with
their Divisional or Principal Valuer.
9.0 PERTINENTS

After adjusting values for quantum, where necessary, the final stage is to
add for any pertinents which are attached to the shop.

9.1 Garages and/or Stores

Any garage or store situated at a shop should be valued in
accordance with the lock-up garage or industrial schemes of
valuation.

9.2 Car Parks

A car park which is provided for the benefit of the customers of a
particular shop, is contiguous with it and does not form part of the
public street, should be valued by reference to the local car park
report.

Appendix 1

ASSESSOR FOR CENTRAL SCOTLAND

LOCAL SHOP REPORT

SHOPS & SHOP TYPE PROPERTIES

Data & Measurement to be Obtained on Survey

1. Description – (shop, salon, launderette, bank, post office, betting office)

2. Situation – (address)

3. Occupier’s Name & Nature of Trade

4. General Description – State type, eg. single, double, department store.

General description of carcassing materials, eg. multi-storey steel-framed
building with artificial stone front, brick sides and rear asphalt flat roof,
concrete floors, fire resisting, etc. Indicate whether structurally adapted
(eg. fishmonger) or specially designed (eg. self-service shop or walk round
 store). Include a reference to any special features of age and character,
approximate date of any major alterations or additions, etc.

In the case of a new shop unit please note what the standard of finish was
when the shop unit was handed over, eg. shell/fitted. Where alterations
have been carried out to make the space useable what has been done,
the quality of the work, and who paid for it (Landlord or Tenant). Also
please ensure a shop fit form is issued where appropriate.

5. Situation

(a) Immediate Environment – whether in a parade, isolated, corner site,

ground floor of tenement, set back from building line, excessively
narrow pavement in front of shop, etc.

(b) General Environment – principal shopping thoroughfare, back

street, housing estate, etc. Character of locality, eg. relationship
with other subjects likely to attract trade.

6. Shop Front – Old fashioned, semi-modern, modern, single, double

windows, arcade. Wooden, mahogany, bronze or chrome window frame.
Steps, terrazzo, tile stone, concrete or mosaic vestibule. Wooden, tiled,
stone or cement faced dado, fascia and pilasters. Neon lettering or sign.
Sun blind. Length of frontage, whether splayed. Return frontage or
frontage to another street (including number of accesses).

7. Front Shop – Walls wood lined, plastered or tiled, or tiled to “X” metres.
Ceiling finish. Floor materials. Ceiling height.

8. Back Shop – Walls wood lined, plastered or tiled, or tiled to “X” metres.
Ceiling finish. Floor materials. Ceiling height. Describe quality. Describe
use.

9. Other Parts of Ground Floor – Walls wood lined, plastered or tiled, or

tiled to “X” metres. Ceiling finish. Floor materials. Ceiling height.
Describe quality. Describe use.

10. Basement, Cellar, etc – Walls wood lined, plastered or tiled, or tiled to “X”
metres. Ceiling finish. Floor materials. Ceiling height. Describe quality.
Describe use. Access by trap or stair. Dampness and liability to flooding.

11. First Floor – Walls wood lined, plastered or tiled, or tiled to “X” metres.
Ceiling finish. Floor materials. Ceiling height. Describe quality. Describe
use. Means of access.
12. Second Floor – Walls wood lined, plastered or tiled, or tiled to “X” metres.
Ceiling finish. Floor materials. Ceiling height. Describe quality. Describe
use. Means of access.

13. Internal Layout – General note of the suitability of the internal layout, eg.
awkward shape, changes of level, mutual accessibility of the several parts,
break up of floorage, etc.

14. Services – CW, H & C, no water, sink, WHB, ladies toilet, gent’s toilet,
WC, WC (own) WC (shared), no WC, EL, gas, method of heating, lighting
system, escalators, hoists (goods and passenger). In a larger shop, it
may be convenient to mention these on each floor.

Particular care should be taken to note areas benefiting from air

conditioning and sprinklers as these items will be added separately.

15. Other Relevant Information

(a) Delivery and dispatch facilities, rear access, loading restrictions,

etc.

(b) Fire escape

(c) Parking space and storage ground

(d) Outbuildings – note position relative to shop, access and surface.

16. Sketch Plan – A single line sketch plan of each floor (including cellars)
showing the boundary and partition walls, position and size of columns,
lifts and staircases, etc. recommended. Show the arrangements of
display window, vestibule, doors and arcade fitments without taking
measurements. Show all accesses. Show the effective frontage of the
shop, ie. the width between the inside faces of the piers or butts on either
side. Show ceiling height on each floor thus – 3.20m. Measure depth
from the building line, even where the shop front is arcaded or of unusual
pattern.

Indicate zones by means of dotted lines drawn parallel to the building line.
Appendix 2
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