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1.1聽This Rating Manual section deals with wholesale warehouses, also known as a 鈥渃ash and carrys鈥�.

1.2聽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聽The bulk class of this category of property should be W.

1.4聽The following characteristics are typical of a wholesale warehouse:

• sui generis planning consent for wholesale cash and carry warehouse use or class B8 鈥攕torage 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 鈥榃holesale Warehouse and Premises鈥�

SCAT code: 301

As a Generalist Class, the appropriate suffix letter should be G.

3.1聽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听罢丑别 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聽Revaluation聽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聽There are no particular legal issues relating to this class of property.

5.2聽Planning permission usually contains conditions as described in 1.4.

6.1聽Method of survey should be GIA in accordance with Valuation Office code of measuring practice.

6.2聽Plant and Machinery (P&M): in accordance with聽, 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 鈥�WSWH鈥� 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聽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 鈥榃holesale Sales Area鈥�.

6.5聽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 鈥極ther Addition鈥� using the codes LFH, LFG, LFU, LOH, LOG or LOU as appropriate and following the local scheme for the treatment of ancillary storage land.聽

6.7聽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聽Surveys should be recorded in EDRM.

7.2聽As the rentals approach to valuation should be used for all Wholesale Warehouses, survey data details should all be captured in RSA.

8.1聽All Wholesale Warehouses should have their own聽valuation scheme聽rather than be included in general industrial schemes.聽

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听罢丑别 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聽rating list.

8.4聽Survey data must be captured as outlined in section 6 to enable accurate analysis of rents and subsequent valuation.

8.5聽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 square metre 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.聽

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聽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聽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聽lease.

1.2聽In 2021, the UK grocery wholesale market was forecast to be worth 拢28.9bn, with traditional wholesale accounting for 84% and hybrid and foodservice wholesale accounting for 8% each. Wholesalers have had to cope with unpredictable demand 鈥� and the pandemic has accelerated the growth of digital solutions and new revenue streams such as direct-to-consumer. According to one industry report in 2023, the sector continued to grow in 2023, as the cost-of-living crisis continues, consumers have sought to find value in every shopping visit. This is expected to continue into 2024, where the market for the UK Grocery Wholesale Industry is expected to measure at 拢38.9bn.

1.3聽Grocery wholesalers have faced challenging conditions over the past five years, with downward pricing pressures and wholesale bypass constraining revenue. They鈥檝e also had to adapt to changing consumer trends (e.g. rising health consciousness) and buying patterns (especially during COVID-19) and cater to increasingly time-poor consumers. Over the five years through 2024 to 25, industry revenue is forecasted to contract with an expected dip of 5% in 2024 to 25. This is largely due to high prices impacting sales volumes and increasing rates of wholesale bypass.

1.4聽Further media reports from the wholesale market have shown that a key trend dominating 2024 is the sector leaning into green and clean energy. They have been聽installing renewable energy sources such as solar and wind power.

1.5聽The pace of technology has continued and is a key factor which is expected to accelerate during 2024. There has been investment in enhanced payment systems, customer portals, e-commerce features, personalisation, or improvements in cybersecurity. And due to growth of the online market, some wholesalers are actually transforming their warehouses into distribution centres and effectively closing to public access in order to serve the area for deliveries.

1.6 Although the sector has grown, the industry has faced some challenges with wholesalers facing the past 2 years patchy levels of availability from suppliers. Whilst some reports have suggested some easing, availability remains a big concern. With recent reports suggesting some suppliers have informed wholesalers that they are introducing a new way of supplying the wholesale sector such that only those wholesalers spending over 拢2m per annum would remain eligible for direct supply. Those wholesalers who do not qualify would stop receiving orders from 1st April 2024.

1.7 Further areas of concern for the industry include new legislative and regulatory changes which are set to come into play in 2024, which the industry needs to be aware of and prepare for. This is mostly centred around sustainability, packaging and Brexit.

2. Changes from the last practice note

2.1聽Market appraisal of the sector.

2.2聽The distinction between 鈥榥ational set鈥� and 鈥榣ocal set鈥� wholesale warehouses has been removed.

2.3 If the land is used for any form of car parking, the spaces/area should now be captured as Car Parking within 2026 survey data. In most cases, car parking will be reflected in valuations. There is no distinction between customer and staff parking in the survey data for 2026, meaning any car parking, whether for staff or customers, has now been data captured within Car Parking.

2.4 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.

2.5 It is also accepted that an addition could be appropriate where the location demands a premium (such as Inner London and other prime locations).

2.6 Any area of land (compounds) which is not accessible due to fencing/gates/walls to the general public is data captured within Other Additions. This follows local practice on industrials, so consideration to the locally-adopted practice for capturing ancillary industrial land should be followed.

2.7 Three address matrices owned by the CVG Revaluation team have been created together with all valuation access paths. The details are at 4.2 to 4.5, with one matrix for Inner London Economic Region, one for use in the rest of England and the third one for use in Wales. Valuation Units must use these matrices and not create matrices of their own.

2.8 Commentary within section 4 with regard to rental adjustment and analysis undertaken by the Regional Industrials CCT.

2.9 The Rating Manual now gives instructions regarding specialist supermarkets which concentrate on sales of cuisine of a single country. Unless membership is involved, these should be valued in line with general hypermarkets and supermarkets.

3. Ratepayer discussions

3.1聽No discussions have been held with any聽ratepayer聽representatives or trade bodies. Values will be based on national and local rental evidence.

4. Valuation scheme

4.1聽Analysis and valuation scales should be the 2026 scales A6FGIA1 and V6FGIA1 respectively.

4.2 For all areas of England outside Inner London Economic Region, the valuation matrix to be adopted is A6IWSWHNAT1.

4.3 In Inner London, the valuation matrix to be adopted is A6IWSWHIIL1.

4.4 In Wales, the valuation matrix to be adopted is A6IWSWHUKL1.

4.5 All three matrices have the Owning Site 501 (鈥楥hief Executive鈥檚 Office鈥�).

4.3 The Regional Industrial CCT has undertaken significant rental adjustment and analysis on Wholesale Warehouses based on the revised approach to data capture. This research is based on open market rents with effective dates within the Reval 2026 rental window has shown that rents on Wholesale Warehouses are commonly in excess of 20% above the prevailing general warehouse values in the locality, all other things being equal.

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 鈥渕ain shopping mission鈥� has declined due to increasing 鈥榙elivered wholesale鈥� (i.e. wholesalers delivering to the customer), and that the majority of trips to cash and carry are now for 鈥渢op up鈥� reasons.

1.4 It is reported that grocery wholesaling continues to face 鈥渨holesale bypass鈥� 鈥� 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 鈥渃lick and collect鈥� and delivery of online orders being offered by some operators. 鈥楧elivered wholesale鈥� 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.