England and Wales Lands Tribunal

[2000] EWLands ACQ_102_1999 (23 March 2000)

ACQ/102/1999

LANDS TRIBUNAL ACT 1949

COMPULSORY PURCHASE - Compensation - cleared site occasionally used for parking vehicles - untraceable owner - comparable transactions - compensation £5,000.

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN UNKNOWN Claimant

and

NEWPORT COUNTY BOROUGH COUNCIL Acquiring

Authority

Re: 82 sq.m. of cleared land and former lane,

Constables Lane, Newport, South Wales

Before: N J Rose FRICS

Sitting in public at Wales Rent Assessment Panel

on 14 March 2000

Steven Dinnick BSc (Hons) ARICS of the Property Division, Newport Borough Council, with leave of the Tribunal for the Acquiring Authority

The Claimant did not appear and was not represented.


 


DECISION OF THE LANDS TRIBUNAL

1. This is a reference by the Newport County Borough Council (the acquiring authority) to determine the compensation payable for the freehold interest in 82 sq.m. of cleared land and former lane at Constables Lane, Newport, South Wales, compulsorily acquired under the Newport County Borough Council (Commercial Road Area) Compulsory Purchase Order 1998 (the CPO), made in December 1997 and confirmed by the Secretary of State for Wales on 9 November 1998. The property was vested in the acquiring authority on 29 April 1999, which is the valuation date.
2. I was told that the Land Registry records showed that the subject land was owned by Estatesways Builders Plc, who acquired it in 1977. That company, however, says that it sold the land in January 1982. Details of the purchaser cannot be traced and, although the reference to this tribunal was advertised in the local press, no claim has been submitted by the present owner, nor was that owner represented before me.
3. At the hearing Mr Steven Dinnick, BSc (Hons) ARICS appeared on behalf of the acquiring authority with leave of the tribunal and gave evidence. He has had over 22 years professional experience and, since June 1996, has been Property Services Manager responsible for all aspects of property management and valuation of the acquiring authority's property assets.
4. He explained that the CPO had been made in pursuance of the acquiring authority's strategy of bringing about physical improvement to an area which had been in decline. The intention was to bring a larger parcel, including the subject land, into public ownership, prior to disposing of it to a housing association for development. Outline planning permission for residential development of the larger parcel was granted on 28 October 1997. At the valuation date the subject land comprised a cleared open area, together with a small portion of former access lane. The land was flat, level and surfaced. There was formerly an open sided shelter on part of the land, but this had been removed prior to the valuation date. Before its acquisition the land had been used from time to time as an informal parking area for vehicles. This use had not been regularised, however, and there was no record of fees having been collected.
5. When preparing his valuation, Mr Dinnick had considered a range of possible uses for the subject land. It had been used for occasional parking by visitors to other properties in the area. There was, however, adequate parking available in the surrounding residential streets and he concluded that the site would be of little value if it were made available for parking on a formal basis. Nor did he consider that the site would be valuable for residential development purposes. It size and location were such that it was most unlikely to be suitable for residential development in isolation. Moreover, feasibility studies had shown that the larger area would only be viable for residential development if public sector grant funding were made available.
6. Nevertheless, he considered that the land must have had a value. In order to assess that value, he had identified four transactions that had taken place around the valuation date, relating to properties in the vicinity. They were all comparable in the sense that, although they were not cleared sites, the agreed prices had been based on the area of each site rather than the buildings upon them. He had personally been concerned with three of the transactions and all four had been negotiated in the knowledge of the acquiring authority's proposed compulsory purchase. These four transactions may be summarised as follows:

(a) Rear of 105 Commercial Road Former garage in very poor condition with effectively no roof, but with external walls remaining. Vehicular right of way through yard of 105 to Commercial Road and pedestrian access to Constables Lane. Site area 76 sq.m. Price £6,500 freehold with vacant possession in January 1999, equivalent to approximately £85.50 per sq.m.

(b) 101 Commercial Road Former Baptist Chapel, used as storage/workshop. Vehicular access to Clarence Street, pedestrian access to Commercial Road. Site area 635 sq.m. Price £50,000 freehold with vacant possession in November 1997, equivalent to approximately £78.75 per sq.m.

(c) 79 Commercial Road Single storey property in use as a vehicle garage. Roof of corrugated sheeting in very poor condition. Access to Commercial Road. Site area 140 sq.m. Price £13,500 freehold with vacant possession in February 1998, equivalent to £96.50 per sq.m.

(d) 76/77 Commercial Road Terraced premises on three storeys, originally used for retail and residential purposes, but no longer capable of occupation due to extremely dilapidated condition. Site area 347 sq.m. Price £30,525 freehold with vacant possession in February 1998, equivalent to £88 per sq.m.

7. Mr Dinnick said that these transactions all reflected the benefit of capital investment in the form of buildings erected on the sites, albeit of varying qualities. He had not been aware of any transactions in the area around the valuation date involving properties comprising land only. He would have expected such properties to have a lower value than that of properties comprising land and buildings.
8. All the comparables enjoyed better access. The subject property was accessed only from Constables Lane, which would tend to reduce its attraction to potential occupiers. He would have expected this to be reflected in a lower unit value for the subject property. He considered that the physical characteristics and location of the property severely limited its potential uses if considered in isolation. Use for residential purposes would not be practical. The evidence of the four sales suggested that the value of the subject land was in the region of £60 per sq.m. Applying this rate to the site area indicated a capital value of £4,920, which he rounded up to £5,000.
9. At the hearing Mr Dinnick referred to another transaction which had come to his attention after his report had been completed. This was the sale of an open site with an advertising hoarding at 96/97 Commercial Road. This acquisition had been negotiated by Mr Dinnick's colleague, who had agreed a price of £25,000 for a site of approximately 200 sq.m. At the time of acquisition the hoarding was producing an income of £1,600 per annum, which had been fixed in 1993. Assuming a capitalisation rate of 10% for the hoarding, this transaction suggested a value for the land of approximately £45 per sq.m.
10. Mr Dinnick conceded that it was difficult to analyse this transaction accurately. The rent payable was historic and was probably less than the market rental of the hoarding at the date of sale. In addition, he had no evidence to support the capitalisation rate of 10%, nor did he have any previous experience of dealing with advertising hoardings. Nevertheless, the analysis of £45 per sq.m. had been arrived at following consultations with the District Valuer. Its accuracy could not be guaranteed, but it did not suggest that his valuation of £60 per sq.m. was too low.
11. There is unfortunately a lack of truly comparable evidence to assist with the valuation of the subject property. Nevertheless, I consider that Mr Dinnick has done his best to produce an objective valuation on the basis of such limited evidence as there is available. In the absence of any evidence from the claimant, I accept his valuation. The amount of compensation payable for the freehold interest in the subject property is £5,000.
12. I make no order as to costs.

Dated: 23 March 2000

(Signed): N J Rose