Car showrooms
Source: gov.uk (2025-04-28)

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This section applies to premises constructed or adapted for use as car showrooms. To qualify as a car showroom for the purposes of this class, there must be a showroom element present at the subject property. Therefore this manual section does not apply to car lots, car supermarkets, garages or workshops or petrol filling stations with some ancillary space.

2. List Description and Special Category Code

Primary Description Code: CG3 List description: Car Showroom and premises SCAT code: 042 SCAT suffix: G

3. Responsible Teams

3.1 This is a Unit class and each Unit is responsible for the survey and valuation of car showrooms in the class.

3.2 For Reval 2017, it is anticipated that each Unit will have a named individual responsible for the class.

3.3 It is then recommended that each Unit should allocate a named co-ordinator, or Lead Valuer, to act as a point of contact within the Unit. This Lead Valuer will be responsible for assisting in the delivery of the Group’s valuation scheme and also for liaising on value and technical issues with other Lead Valuers across adjoining Units.

4. Co-Ordination

The Car Showroom Class Co-ordination Team (CCT) has overall responsibility for the co-ordination of this class. The CCT is responsible for overseeing the approach to car showroom valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers have a responsibility to:

follow the advice given at all times – Practice Notes are mandatory

not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team

5. Legal Framework

The use for planning purposes is usually sui generis.

6. Survey Requirements

Car Showrooms should be measured to gross internal area (GIA).

6.1 Internal and external photographs are mandatory and should include photographs of all main areas including show rooms, ancillary offices, parts stores, workshops, mezzanine floors and car wash bays and all rateable plant and machinery.

6.3 Air Conditioning Air-conditioned areas should be identified on the survey, and details of the air conditioning system should also be noted. Air-conditioning to be added as a 5% addition to the appropriate line entry using the air plus adjustment code, the beacon characteristics for air conditioning set to partial if the whole property is not air conditioned.

6.4 Quality Adjustments should not be made for quality other than in exceptional circumstances, for instance where an old workshop is attached to a modern showroom. Generally quality should be reflected in the showroom price.

6.5 Office Area Offices in modern dealerships tend to fall into the following categories:

6.5.1 Sales offices and reception areas that face the showroom or are only partitioned from the showroom should be captured as OFF. This will value at a relativity of 100%. These offices are often occupied by sales staff, the dealer principal, etc. The partitioning used is commonly glazed.

6.5.2 Ancillary offices usually form a defined block of offices used for administration, accounts, service administration, human resources and such like. They are often located between the showroom and the workshop. These should be captured as ANO and achieve a relativity of 60%.

6.5.3 First floor offices All first floor offices should be classed as ANO unless sales areas or reception or where offices are of an exceptional standard when they should classed as OFF. The floor level code should be 01 on the upper floor.

6.5.4 Offices located within the workshop are normally of a more basic quality and these should be captured as OWK which attracts a relativity of 50%. If workshop offices are simply partitioned from the workshop then capture as part of the workshop GIA.

6.6 Allowances to reflect reduced height should ordinarily not be made for accommodation within the main body of the showroom which is below first floor office accommodation, whether the reduced height accommodation is used for showroom or office purposes. Such areas should be included in the normal main showroom or office GIA.

6.7 Land All modern car showrooms have a requirement for land to display cars for sale, customer and service parking and car storage. The land value is a significant item within any car showroom valuation and consistency of valuation method should be adopted across units to achieve consistent valuations.

6.7.1 Although in most cases use by the hypothetical tenant is expected to be the same as actual use of the site, different occupiers can occupy land in different ways. In some cases the land directly in front of the showroom is given over to display but sometimes it can be reserved for customer parking. It is important to have regard to the optimum use of the land if the car showroom was vacant and to let.

6.7.2 Land used for display ,customer and service parking should be valued on a price per space. Where car spaces are not marked the measured gross area of the land, less essential access to the workshop only and any landscaped areas, should be used and divided by a notional car space of 20m2. This will reflect circulation. Areas used for vehicle access into the showroom should not be deducted from the area.

6.7.3 Historically, in general terms, the most valuable land was normally at the front of the site however the site layout of modern showrooms may mean that premium sales space can also be located on other parts of the site away from the road frontage. The least valuable land is typically to the rear and usually utilised for car storage or parking areas often for staff. There is usually limited public access to these areas.

6.7.4 Any areas of landscaping (flower beds, embankments etc.) or areas used for essential access into the site or to the workshop areas or petrol filling station or to other separately assessed buildings should be excluded.

6.7.5 Land can be data captured as line entries in the main survey or in Other Additions. The preferred approach is for the display land and car parking to be captured as line entries. In both cases car parking will be expressed as the number of spaces.

6.7.6 Where display and parking land is captured as line entries in the main survey, car parking should be expressed as the number of car spaces and captured using Use Codes VS1, VS2 and VS3. VS1 and VS2 are intended for main display and customer parking areas usually situated at the front and the side of the showroom. As these uses are essentially interchangeable both codes will use the same relativity.

6.7.7 Spaces to the rear of the showroom are normally used for workshop parking and vehicle storage. These areas are not normally accessed by the public. These spaces should be captured as VS3 and will attract a lower relativity to VS1 and VS2.

6.7.8there display and parking land is captured as an Other Addition, Other Addition Codes VS1- VS9 are available options in the Other Addition tables. Where Other Addition Codes are used, they should ideally be rationalised to VS1-VS3 where possible, to align with the stated line entry method of data capture and valuation.

6.8 Storage Land and Compounds Storage yards if used solely for car storage (no access to the public) can be captured as line entries in the main survey or in Other Additions. In both cases, the land should be expressed in terms of an area per square metre. The use of codes LFH, LFG etc should be adopted.

6.9 Valet Bays located in workshop type buildings should be captured either as WKS or ASO. ASO should only be used where the valet bay is housed in an inferior building to the workshop space.

6.10 Plant and Machinery Details of any items of Plant and machinery present should be noted and identified on the survey in the usual way. Air conditioning see para 6.3. Car washes often have rateable elements such as settings and drainage. Rateable items such as CCTV cameras, fire protection systems, sprinklers, inspection pits and air compressors and receivers and CCTV may also be present. Details of all plant and machinery should be accurately recorded.

6.10.1 For rateability and valuation, reference should be made to the 2017 cost guide.

7. Survey Capture

Rating Surveys should be captured on RSA and plans and surveys stored in EDRM.

8. Valuation Approach

The rental method is the appropriate method to be adopted. There is rental evidence available and once adjusted rents can be analysed on a £/m2 basis. The relevant rental adjustment practice note in the Rating Manual, Section 4: Part 1 provides guidance on rental adjustment.

9. Valuation Support

9.1 All valuations for the 2017 Rating List should be made using the Rating Support Application (RSA).

Appendix 1 - Inspection checklist

Car showroom inspection checklist (https://assets.publishing.service.gov.uk/media/67b454694e79a175a4c2fdcc/car_showroom_-_inspection_checklist.docx)

Practice note: 2023 - car showrooms

1. Market appraisal

1.1 Official Statistics show that since a peak in 2016, UK car sales for both new and used vehicles have fallen. Post Covid, production started to recover in 2021 but widely reported component supply issues has continued to limit output of new cars. This together with similar problems reported as affecting manufacturers in the EU and elsewhere, has contributed to an increase in second-hand car values and sales in 2021.

1.2 Media reports indicate that electric vehicle sales have risen, albeit from a very low base at the previous antecedent valuation date.

1.3 Although media reports suggest there is a trend for manufacturers with the largest numbers of dealerships to downsize, access to a local dealership is still seen as an important part of the sales process in the shift to omnichannel commerce. Such reports suggest that the industry is continuing to move towards larger higher specification properties. The prestige marques frequently seek to have their high value approved used cars under cover, thus increasing the requirement for larger showrooms.

1.4 As at the AVD of 1st April 2021 Covid was in existence. It was anticipated that the vaccine rollout which commenced in December 2020 would reduce its impact on society.

2. Changes from the last practice note

2.1 Changes have been made to the market appraisal and valuation scheme sections.

3. Ratepayer discussions

3.1 None.

4. Valuation scheme

4.1 There is no agreed valuation scheme. Car showrooms are valued in accordance with RM Volume 5 Section 205. The location and type of showroom are important factors when valuing this type of property. Notwithstanding the earlier market appraisal section, clearly more weight should be given to rental evidence over generic market reports. If there is a lack of comparable local rental evidence then it may be necessary to cast the net further into other towns and cities, and or differing types of car showroom.

4.2 Prime locations are likely to provide access to large populations through the local main roads and motorway network. Good locations are often on the edges of larger towns and cities and often located adjoining other showroom premises.

4.3 Highly visible sites with good access, adequate customer parking in prime locations are the most desirable.

4.4 The following examples give guidance on the types of showrooms along with a recommended sub location code to adopt where applicable. However, this is not an exhaustive or definitive list and some flexibility may be required when categorising or comparing sites.

Type 1: Prime. Recommended sub location code: CAR1

These are modern purpose-built showrooms usually built or significantly refurbished since 2010. They are often purposely adapted for the end user and will be to a tightly controlled manufacturer’s design brief. The design standards adopted will often be pan-European or across Europe and North America. They will usually be in the best locations, e.g. prominent main road sites close to motorway junctions or co-located on motor retail parks. Some may be on fully re-developed existing car showroom sites.

They are usually double-height glass walled showrooms fitted out to a very high standard with a distinctive corporate style. They aim to provide a very high-quality retail experience which reinforces brand values. They will have plentiful parking, display spaces and good access. In some instances, due to restricted or high value land sites, or depending on the proximity of the site in question, certain sites will have upper floor showroom areas to maximise their visibility.

Type 2: modern main dealer. Recommended sub location code: CAR2

These will be purpose-built showrooms constructed from around 1990 onwards. These will be less highly specified than CAR1 and occupiers are more likely to be the mainstream marques. They may be single storey height or double storey glass walled showrooms. They will be in a wide variety of locations - some will occupy the same type of sites as CAR1 but others will be on main A-road locations historically associated with car sales.

Type 3: older purpose built/conversions. Recommended sub location code: CAR3

These will generally be built prior to 1990. They may be purpose built but to designs that now appear dated with lower single storey showrooms with some solid walls and glazed display, rather than fully glazed walls as CAR1 or CAR2. They will tend to be either stand alone or along A-roads in the traditional “car-alleys.” In major cities some showrooms may be in converted shops with little or no outside space.

4.5 The Transport CCT provides the above advice in respect of car showrooms. This is general guidance only and does not replace market evidence and does not take account of any specific local conditions. It will not be unusual for higher levels of value to be applicable in any of the suggested types of car showroom.

4.6 This advice does not apply to car showrooms within central London where showrooms maybe located within a retail pitch and the local retail tone may therefore be more relevant in valuing this type of car showroom.

4.7 In cases where it is correct to value the showroom at a relatively low rate due to the characteristics of the property - for example due to its age or construction - care should be taken in valuing the land used as display and car parking. This is particularly the case where display land and parking are data captured as a line entry. In some cases, the factor applied to the showroom value may produce a value that is too low and does not reflect the correct value of the land - for example where the price/sq. m on the land comes level with or below the price/sq. m for ancillary storage land with industrial units in the locality. In such circumstances a line adjustment should be carried out so that the land can be valued correctly. This should be done by using a quality line adjustment overwritten to say ‘Land Value’ so that the reason for the line adjustment is recognised as valuation issue rather than an issue with the quality of the land.

Practice note 1: 2017: Car showrooms

1. Market Appraisal 2008-2015

1.0 Between 2003 and 2007 the market for new cars in the UK saw continued year on year growth with 2,404,000 new car registrations in March 2007. In the year to March 2008 sales slipped slightly to 2,398,000 sales. There followed a gradual downturn over the summer of 2008 with a severe fall in September 2008.

1.1 This prompted the Society of Motor Manufacturers and Traders (SMMT) to state that the “most difficult economic conditions the industry has faced in 17 years” and called for Government action. There then followed further significant falls in October and November 2008, with November down 36.8% year on year.

1.2 In response to the desperate state of the car retail market the Government introduced the car scrappage scheme on 18 May 2009. The scrappage scheme arrested the slowdown and the market started to recover from the weak performance of 2008 by Autumn 2009. However, 2009 total sales were only 1.99 million, 2010 sales were 2.03 million and 2011 were 1.9 million - half a million sales down on the 2007 figures.

1.3 At the Antecedent Valuation Date of 1 April 2015 annual sales of new cars had seen 37 months of consecutive growth to show 2,476,435 registered in the year to March 2015.

1.4 The SMMT Chief Executive Mike Hawes stated that March 2015 was “The best month this century for new car registrations”.

1.5 At the AVD the new car market surpassed pre-recession levels of sales, but the SMMT predict that the market will level off in 2015.

1.6 Articles in MotorTrader.com (November 2013) and the Vehicle Dealership Property Market Update (2014) carried out by Barber Wadlow considered whether market improvement was reflected in the rental value of car showrooms.

1.7 Both reports refer to improving market conditions. Barber Wadlow reported rental growth on Prime rents inside the m25 suggesting that rents have nearly recovered to their 2007 highpoint. However, it went on to say that outside the m25 prime rents are static and remain below the 2007 levels.

1.8 The Motortrader report states that the market is performing better than one year ago (report dated November 2013). It quotes Rapleys as saying that prime values, on facilities representing key brands such as Mercedes, Audi and BMW, being comparable to that achieved at the height of the market. Conversely, secondary brands are unable to compete at the prime values of 2008. GVA Grimley are quoted as saying that secondary properties are still approximately 25% below the market peak. A further report in March 2015 quoted Colliers as saying that “ Values of prime sites in major conurbations are now consistent with the pre-downturn although secondary locations, smaller provincial sites have still some way to go”.

1.9 Both reports refer to a two-tier market with secondary properties taking longer to recover their value. There appears to be stronger growth in the South East relative to the rest of the country.

1.10 Further reports from Motor Trader.com (Oct 2014) highlight rising confidence from investors in dealerships occupied by premium brands, namely, BMW, Jaguar, Land Rover, Mercedes-Benz, Lexus, Audi and Honda. These marques also had requirements for new or upgraded facilities. As the market improves manufacturers will put pressure on dealers to either upgrade older showrooms or move to new, purpose built showrooms. Dealers are under pressure to locate to larger higher specification properties as manufacturer’s ranges grow. Manufacturer owned dealer group subsidiaries such as VW, Honda, Volvo, Kia, Ford and Peugeot are active in developing their retail network and demand high quality showrooms which conform to a strong corporate identity.

2. Changes From Last Practice Note

2.1 The main change from the previous practice note is that car display/parking spaces captured either as VS1 or VS2 as survey line entries are to be valued at a factor of 1.75 times the showroom main space price per m2. Formerly, VS1 was at a factor of 3 x the showroom price/m2 and VS2 was at a factor of 1.5.The adoption of the same factor for both VS1 and VS2 spaces reflects the interchangeable nature of their use between prime display, secondary display and customer parking areas. The factor for VS3 car spaces, where captured as a line entry, remains unchanged at 0.8 of the showroom price/m2.

2.2 Where car spaces are data captured as VS1, VS2 or VS3 in ‘other additions’, the above factors do not necessarily apply and will be subject to a local valuation approach.

3. Ratepayer Discussions

None.

4. Valuation Scheme

4.1 There is no agreed valuation scheme. Car showrooms are valued in accordance with Rating Manual section 6 part 3 - section 205. The location and type of showroom are important factors when valuing this type of property. Notwithstanding the earlier market appraisal from 2008-2015, clearly more weight should be given to rental evidence over generic market reports. If there is a lack of comparable local rental evidence then it may be necessary to cast the net further into other towns and cities, and or differing types of car showroom.

4.2 Prime locations are likely to provide access to large populations through the local main roads and motorway network. Good locations are often on the edges of larger towns and cities and often located adjoining other showroom premises.

4.3 Highly visible sites with good access, adequate customer parking in prime locations are the most desirable.

4.4 The following examples give guidance to the types of showrooms, but this is not an exhaustive list and a wide variety of showroom types exist.

Type 1: Prime

These are modern purpose built showrooms built since 2000. They are purpose-built or purpose adapted for the end user and will be to a tightly controlled manufacturer’s design brief. The design standards will often be pan-European or in the case of BMW across Europe and North America. They will usually be in the best locations, e.g. prominent main road sites close to motorway junctions or co-located on motor retail parks. Some may be on fully re-developed existing car showroom sites. They are usually double height glass walled showrooms fitted out to a very high standard with a distinctive corporate style. They aim to provide a very high quality retail experience which reinforces brand values. They will have plentiful parking and display and good access. The expected marques are BMW, Audi, Mercedes, Jaguar, Land Rover, Lexus. Redeveloped showrooms on cramped sites may have multi-storey parking and occasionally first floor showrooms.

Type 2: Modern Main Dealer

These will be purpose built showrooms constructed from the mid-1980’s onwards. These will be less highly specified than type 1 and occupiers are more likely to be the main stream marques, e.g. Ford, VW, Vauxhall, Skoda, Seat, Toyota, Nissan etc. They may be single storey height or double storey glass walled showrooms. They will be in a wide variety of locations, some will occupy the same type of sites as Type 1 but others will be on main A-road locations historically associated with car sales.

Type 3: Older purpose built / conversions

These will be built prior to 1980. They may be purpose built but to designs that now look dated with lower single storey showrooms with some solid walls and glazed display, rather than three glazed walls as type 1 and 2. They will tend to be either stand alone or along A-roads in the traditional “car-alleys.” In major cities some showrooms may be in converted shops with little or no outside space.

4.7 In cases where it is correct to value the showroom at a relatively low rate due to the characteristics of the property for example due to its age or construction, care should be taken in valuing the land used as display and car parking. This is particularly the case where display land and parking is data captured as a line entry. In some cases the factor applied to the showroom value may produce a value that is too low and does not reflect the correct value of the land for example where the price/m2 on the land comes level with or below the price/m2 for ancillary storage land with industrial units in the locality.