Following the recession in late 2007 and the dramatic fall in business confidence, Leeds City Centre’s expanding financial district was stopped in its tracks. We were instructed by Zurich Assurance in Leeds to advise on minimising its rate liability.
Fall in rental value identified in rent review
We took advice from our rent review and letting experts and decided that there had been a fall in rental value. In part, this was attributed to a significant level of new office development in Leeds between 2003 and 2008. The question was: How much of the rental decline could be attributed to physical factors, in this case, oversupply?
Collating evidence to support claim
In order to mount a case, we approached other rating surveyors in Leeds and nationally, who started collating the relevant evidence of decline and the reasons for the decline. In December 2008, all parties met to establish the “Material Change in Circumstances’.
Expert witness statement at Valuation Tribunal helped win case
Negotiations took place with the Valuation Officer (VO) in 2010. The VO resisted any reductions for oversupply and test cases proceeded before the Valuation Tribunal in Leeds in early 2011 with barristers over 3 days. We acted as an Expert Witness to the Tribunal.
Reduction in rateable value of 10%
The final outcome was a reduction in rateable values for all Leeds City Centre offices of 10%. 2005 RV was successfully reduced from £477,500 to £430,000, with our client Zurich Assurance Ltd, achieving savings of £17,293.
Principle now under discussion in multiple cities
Richard Wackett, National head of Rating. said: “We argued that oversupply of new and existing office accommodation in Leeds City Centre had adversely affected the value of the subject property and many others. The knock on effect of the outcome impacted on over 500 city centre occupations in Leeds. The principle is now under discussion under the 2010 rating list and carried forward to Manchester. It is also being considered in the City of London, Birmingham, Newcastle and the Thames Valley’’.
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