Practice Notes
Download Document - (Opens in a new window)
Approved for Publication 03.03.2005
PUBLIC BUILDINGS COMMITTEE
Practice Note 26
REVALUATION 2005
VALUATION OF HOSPITALS
1.0 INTRODUCTION
This Practice Note is intended to cover all classes of hospital, both NHS and private. It does not apply to subjects which are principally residential in character, other than geriatric and psychiatric hospitals in which medical treatment is provided to residents on a regular basis. Subjects of a residential character should be valued by reference to Public Buildings Committee Practice Note 9, (Valuation of Residential Homes)
1.1 Let-Out
Non-domestic premises forming part of a hospital complex that are let by the hospital in such a way as to require separate assessment should be assessed by the most appropriate method of valuation; this will normally be by reference to rental evidence.
2.0 METHOD OF VALUATION
There is no rental evidence for this class of subject. It is therefore recommended that the Contractor's Basis of valuation be employed.
3.0 BASIS OF MEASUREMENT
Building areas should be calculated on a gross external basis for each floor. Attic floor accommodation should be calculated on a gross internal basis excluding any area under 1.5 metres in height.
The total site area and areas of car parks, roadways and soft landscaping should also be determined.
4.0 BASIS OF VALUATION
All available cost evidence was analysed.
Buildings should be valued in accordance with Basic Principles Committee Practice Note 2 (Contractor's Basis Valuations). The recommended unit cost rate based on the cost analysis is noted below. The recommended rate excludes professional fees and site finishes.
External site works should be valued in accordance with Public Buildings Committee Practice Note 4 (External Works Costs, Allowances and Land Values).
Adjustments in respect of contract size and additions for professional fees should be made in accordance with the recommendations contained in Basic Principles Committee Practice Note 2.
The estimated replacement cost and the adjusted replacement cost should be derived as indicated in Sections 6 and 7 below.
5.0 ESTIMATED REPLACEMENT COST (ERC)
5.1 Unit Costs
|
Acute, General or Teaching Hospitals |
£1,150* |
|
Cottage & Community Hospitals |
£1,050 - £1,150* |
|
Geriatric & Day Hospitals (without theatre facilities) |
£1,050* |
|
Industrial Cedar |
£650 |
|
Medway Type Hutting |
£500 |
* It may be necessary to adjust these rates in particular circumstances to reflect technical obsolescence / quality by up to 20%. In such circumstances, actual costs may be of some assistance.
5.2 Adjustment of Gross Areas
In the case of multi-storey buildings, the following general allowances should be made to the whole of the multi-storey part of the building.
|
Buildings with one or two main floors |
0% |
|
Buildings with three main floors or more |
10% overall |
|
Buildings with eight or more floors |
10% on overall basis up to 7th floor, then 15% on 8th floor and above. |
5.3 Outbuildings
Garages and other substantial outbuildings may also be added at appropriate rates. Care should be taken to ensure that values attributed to old outbuildings, which may be of little use or even redundant, are reasonable. It must be remembered however that the above rates represent overall unit costs for all elements normally found in a hospital of a particular type. Lesser rates should not therefore be applied to laundry accommodation etc. simply to reflect poorer internal finishes.
5.4 Plant and Machinery
The building specification will include heating, lighting and normal lift provision. Any additional plant found in these subjects should be dealt with in terms of the Valuation for Rating (Plant & Machinery)(Scotland) Regulations 2000 and valued accordingly.
5.5 Site Finishes
Site finishes should be valued in accordance with Public Buildings Committee Practice Note 4.
5.6 Fees and Contract Size
Additions for fees and adjustments for contract size should be made to the total estimated replacement cost derived from steps 5.1 - 5.5 in accordance with Basic Principles Committee Practice Note 2 and Public Buildings Committee Practice Note 4. The addition for fees should be made in terms of Basic Principles Committee Practice Note 2 para 7.4.2. The reduced scale at 7.4.3 is not appropriate for this class of subject.
6.0 ADJUSTED REPLACEMENT COST
6.1 Age and Obsolescence
Age and obsolescence allowances should be applied to the ERC derived above in accordance with the table in Basic Principles Committee Practice Note 2 and Public Buildings Committee Practice Note 4.
6.2 Buildings without Lifts
In the unlikely event of any buildings having no lift provision they should be granted an additional allowance as indicated below to reflect functional obsolescence.
-
2 storeys 5%
-
3 storeys 10%
-
4 storeys 15%
-
5 storeys 20%
6.3 Functional Obsolescence
While disabilities which are inherent in the design of older Hospitals are covered by the scheme of age/obsolescence allowances, individual subjects may suffer from particular disabilities, and where this is the case, further allowances may be granted as deemed appropriate. As attic floors are to be measured internally, there is effectively an in-built allowance for such accommodation.
7.0 LAND
Land values should be determined by reference to local evidence and Public Buildings Committee Practice Note 4.
8.0 DECAPITALISATION RATE
The statutory decapitalisation percentage appropriate to healthcare subjects should be used.
9.0 END ALLOWANCE
The Valuer may, at this stage, consider any factors which affect the subjects as a whole and which have not been accounted for at other stages.
Download Acrobat Reader - (Opens in a new window)
