For the purposes of the 1995 Rating List, Conference and Exhibition Centres have been classified as Group B and the appropriate Group B Co-ordination arrangements will apply.
Special Category Code 051 should be adopted. The relevant suffix letter will be computer generated automatically.
(a) Rental Evidence
Little rental evidence has emerged for this class of hereditament. Those received are set out in Appendix A. They relate to commercial conference centres in country houses, and may be of purely local significance. A degree of comparability is to be expected between this type of conference centre and certain institutional uses which are found in country houses.
Any additional rents which come to the notice of VOs should be notified to CEO (Rating ), via Technical Advisor.
(b) Receipts or Profits Basis
This method of valuation will be available only where the hereditament is operated for profit, or where it is capable of being operated for profit by another hypothetical tenant. Even in these circumstances it will be an unreliable method where the hereditament is occupied in conjunction with another commercial operation which is separately assessed, eg a conference centre operated in conjunction with a hotel.
Centres operated by local authorities do not normally make an operating profit and are not therefore suited to application of this method of valuation. Where exceptionally local authorities do make an operating profit, it is unlikely that the profit motive is the main reason for their occupation; the wider economic benefits for the local economy are likely to be the decisive factor and will tend to suggest that if this method is followed, a substantial overbid is required. In most cases the subjective judgement involved in fixing the size of the overbid will make the contractor's basis the more reliable method. Examination of the accounts may still be relevant if they reveal a substantially worse performance than was assumed when the centre was constructed.
(c) Cost Evidence
This class of hereditament is diverse and beacon evidence is unlikely to be applicable Where actual costs are available, and more particularly where the relevant structure is post 1970, they may provide more appropriate guidance, provided that the assistance of the RBS is used to assist in their adjustment and interpretation.
To enable proper application of the contractor's basis to be made, where other valuation methods are not available, it is essential that surveys to Gross Internal Area are held. VOs should check their existing surveys in order to identify referencing needs as soon as possible.
The unreported decision of the Scottish Lands Valuation Appeal Court in Scottish Exhibition and Conference Centre v Assessor for Strathclyde highlights the need to give carefully limited consideration to financial viability in the contractor's basis. Where a hereditament is being valued on this basis, because it has been provided other than for profit, but the hereditament's financial performance at AVD has been worse than expected at the time when it was decided to provide it, an end allowance may be made. The size of that allowance must be determined on the facts of each case, but cannot exceed, and may be less than, the size of any financial shortfall from target.
VOs may encounter the suggestion that occupancy rates of less than 75% justify a superfluity allowance. In fact no hereditament of this class is likely to be able to achieve much more than 65% if it is a conference centre, or 50% if it is an exhibition centre; "targets" purported to be higher should be treated with suspicion. The occupancy rate may be a guide to financial performance, or even to the fulfilment of a local authority's broader objectives, but it is not an indicator of design size. The hereditament needs to be big enough to accommodate the largest simultaneous booking(s) which the operator wishes to secure.