Emergency Services Superannuation Board v Chief Executive, Department of Natural Resources and Mines
[2002] QLC 57
•19 July 2002
LAND COURT OF QUEENSLAND
CITATION: Emergency Services Superannuation Board & Anor v Chief Executive, Department of Natural Resources and Mines [2002] QLC 57
PARTIES:Emergency Services Superannuation Board & Commonwealth Managed Investments Limited
(applicants)
vChief Executive, Department of Natural Resources and Mines
(respondent)
FILE NO/S: AV2001/0294
DIVISION: Land Court of Queensland
PROCEEDING: Appeal against an Annual Valuation
DELIVERED ON: 19 July 2002
DELIVERED AT: Brisbane
HEARD AT: Brisbane
MEMBER: Dr NG Divett
ORDER: 1. The appeal is allowed, the valuation of the Chief Executive is set aside, and the unimproved value of Lot 5 on RP 200175 is determined in the sum of $12,860,000.
CATCHWORDS: Valuation – Sales – Use of sales – delayed settlements – adjustments to sale price necessary in analysis – apply market rates (long term bond rate) at date of sale. [74-78]
Practice and Procedure – Costs – Land Court Rules – failure to satisfy Rule 23(1)(c) on exchange of expert evidence before hearing – full valuation report rather than summary statement should be exchanged – costs not awarded. [83-88]
Valuation – Sales – Unacceptable sales – difficulties in use of predominantly “retail” sales in valuing predominantly commercial premises; different market sectors. [104, 109]
Valuation – Particular Factors in Valuation – town planning restrictions – guide to owners as to anticipated use of site – but market place forces are key factor. [92-95]]
Valuation – Heritage listed properties – reduction (if any) peculiar to specific nature of building – no common percentage reduction – historical significance (MacArthur Chambers) may hold value. [98-101]
Valuation – Particular factors in valuation – discount for size – not appropriate when highest and best use of compared lots is different – large retail site versus commercial. [108, 109]
Valuation – Sales – sales analysis – apportionment of value to separate areas of sale lot – need to allow for the benefit that apportioned areas gain from other components (additional street access). [116, 118]
Valuation – Particular factors in valuation – access – prime central corner location of subject – access to City Mall – contrast sale with restricted access via integrated ground floor access of heritage building. [120].
APPEARANCES: Mr RM Needham for the applicants
Mr J O’Rourke for the respondent
SOLICITORS: Gadens Lawyers, for the applicants
Background:
This matter relates to land at 240 Queen Street Brisbane and described as Lot 5 on RP 200175, Parish of North Brisbane. The subject land is located at the corner of Queen and Edward Streets and backs on to Rowes Lane. It is opposite the Queen Street Mall and about 40 metres west of the Brisbane GPO, and has an area of 2,127 m². There is satisfactory access to all street frontages, and Queen and Edward Streets are fully bitumen sealed with clay paved footpaths and stone kerbing and concrete channelling. Rowes Lane is also fully bitumen sealed with a narrow concrete footpath and stone kerbing and concrete channelling. Queen Street carries two-way traffic from Edward Street north-east to Creek Street; while Edward Street is one-way traffic south-east towards Elizabeth Street. Rowes Lane carries two-way localised traffic. All normal urban utility services are available.
The subject land is a rectangular parcel of area 2,127 m², and was zoned “Central Business” under the Town Plan of the Brisbane City Council of 13 June 1987, effective at the date of valuation of 1 October 2000. The key issues are the use of the land, comparison of sales, changes in the market, and heritage impacts.
On 26 February 2001 the Chief Executive issued a valuation of the subject land at $16,000,000. Following an objection the Chief Executive confirmed that figure on 1 July 2001. The appellants have now appealed claiming the unimproved value should more properly be $10,100,000.
Mr RM Needham of counsel, instructed by Gaden Lawyers appeared for the appellants, calling evidence from Grant Andrew Jackson, a registered valuer with experience in Central City valuations. Mr J O’Rourke, Principal Legal Officer appeared for the respondent, calling evidence from Douglas George Buchanan, the departmental registered valuer responsible for Central Business District valuations for the preceding three years and responsible for determining the current valuation.
The Nature of the Land -
The subject land is currently developed with a major commercial office building of some thirty floors, with the ground floor currently occupied as retail space for the Queensland head office for the Commonwealth Bank of Australia. There are three basement levels used for vehicle parking, a ground floor banking chamber, a mezzanine level, three podium levels, and twenty-six floors of office tower. Completed in 1989 the overall complex has a total net lettable area of approximately 27,982 m². There are very good views of the Brisbane River from the higher levels of the subject building, although river views are more restricted from the lower levels.
The subject land is exposed to passing pedestrian traffic from the Central Railway Station to the north-west; but vehicle exposure for retail purposes is subject to the heavy traffic flows down Edward Street, which is the major thoroughfare for traffic moving towards the commercial and high residential areas extending between Elizabeth Street and Alice Streets. There are pedestrian traffic lights across Edward Street to the Mall.
Overall the subject land is of medium elevation, with a gentle rise towards the south-east along Edward Street, and a gentle rise to the north-east along Queen Street.
History of the Valuation -
While the previous history of the valuations of the subject land has no direct bearing upon the current valuation, the record provides some insight into the current differences between the parties. Mr Buchanan advises that the subject land had been valued as an unimproved parcel in 1996 and 1997 at $12, 750,000, increasing in 1998 and 1999 to $13,800,000. That had now been increased to $16,000,000 in 2000. He further advises that while there had been an appeal in 1996, and an objection in 1997, those matters had not been pursued following discussions between the parties. To Mr Buchanan’s knowledge there had not been a previous appeal to this Court which had proceeded to hearing.
In light of that history of previous interaction between the parties, Mr Buchanan now challenges how the current estimate of $10,100,000 could have relevance. However it is noted that previous appeals and objections had followed valuation advice from another valuer. Mr Jackson now seeks a fresh approach to the matter, relying upon his wide experience in Central City properties throughout Australia.
Planning Impacts -
While it is agreed by both parties that the current zoning of the subject land is “Central Business”, and its highest and best use for valuation purposes is for commercial offices with some retail use, there is divergence in respect of planning changes as they impact the use of the land.
Subsequent to the current date of valuation of 1 October 2000, the new City Plan 2000 was gazetted by the Governor-in-Council with effect from 30 October 2000. Prior to that formal adoption of the new planning regime for Brisbane the draft City Plan 2000 had been on public display, and its provisions were widely known in the public domain. Under the new City Plan 2000 the subject land is designated as “Multi-Purpose (City Centre)” under the City Centre Local Plan for the Central Business District (CBD). It is agreed that the usage allowed for the subject land has not changed from that permissible under the former Town Plan of 1987.
However Mr Buchanan advises that the new City Plan 2000 now establishes an extended designation of the “Retail Heart” of the CBD. That newly defined “Retail Heart” is focused upon the Queen Street Mall which extends from Edward Street to George Street. The subject land is immediately opposite the Edward Street end of the Mall, and within sub-precinct 1. The major focus of the “Retail Heart” is directed towards pedestrian retailing activities, and retail frontages to the Mall should not be interrupted by large office foyers (Chapter 4, page 405).
Under the new City Centre Local Plan (in Map A) an area defined as sub-precinct 1 is shown as extending to the north-east across Edward Street, and partly to the north-west across Adelaide Street from the Reserve Bank building to Edward Street. Mr Buchanan argues that those two extensions now expand what was formerly the major area of retailing covering the four city blocks between Adelaide Street and Elizabeth Street, and from George Street to Edward Street. Those four city blocks are separately designated as “a limited height area”. Sub-precinct 2 in that plan covers an area adjoining the City Gardens, and extends between Margaret and Alice Streets, and from Edward Street to George Street. Within sub-precinct 1 of the “limited height area”, the maximum building height is not to exceed 70 metres on Australian Height Datum (AHD). Within the predominantly residential area of sub-precinct 2 of the “limited height area” the maximum building height is 45 metres AHD or ten-storeys above ground level, whichever is the lesser. Buildings in other parts of the City Centre may not exceed 250 metres AHD.
Mr Buchanan argues that market forces since 1999 have started to influence retail activity in the CBD, such that with the introduction of the new City Centre Local Plan there is a clear indication of the desired future direction into which the Brisbane City Council (the Council) saw the “Retail Heart” expanding. He argues that in his opinion, following the new retail shopping center proposals for the Howard CHIA site, fronting Queen, Adelaide and Edward Streets, and the retail development site at the MacArthur Chambers site, any developer wishing to locate in the CBD would take serious notice of the expanded boundaries of that “Retail Heart” area.
Mr Jackson does not disagree with that conclusion, but argues that it is the demands of the market place which drive purchasers to acquire development sites, not merely the existence of an expanded vision as established in a planning scheme. Mr Buchanan does not disagree with that view. Mr Jackson also notes that there is now greater flexibility for a developer to obtain planning approval under the new City Plan 2000, which has been developed under the Integrated Planning Act of 1997 (IPA). Mr Jackson also notes that the local plan distinguishes between the actual retailing in the Mall, and other areas of the “Retail Heart” area. He further notes that any reference to a prohibited use under an IPA merely is a statement of the Council’s intent for such land.
However I also note that figures 9.4.1 and 9.5.3(a) of the Town Plan of 1987 also defines the extent of the retail heart frontage virtually similar to that depicted in the City Plan 2000 Local Plan. By that comparison there is nothing to indicate that the Council has sought to expands its understanding of the “Retail Heart” in the later plan.
Mr Buchanan agrees that IPA had changed the method of classifying land from the former zoning controls of the 1987 Town Plan. However, while he agrees that provides more flexibility for potential developers to gain planning approval, he notes that the inherent uncertainty in respect of the potential highest and best use of any land, is a matter which must be considered in any valuation. Mr Buchanan advises that despite repeated approaches to the Council to provide an indication of the maximum permitted development on the subject land, that can only be forthcoming subject to a formal planning application for approval. On that basis, as part of the total revaluation exercise of the CBD, Mr Buchanan has been forced to rely upon his personal assumptions of the likely permitted use of the subject land.
It is also agreed between the parties that with the exception of the common sale at the MacArthur Chambers sale, all other sales relied upon by Mr Jackson fall outside the designated “Retail Heart” in sub-precinct 1. It is also agreed that the subject land and the MacArthur Chambers sale fall outside the “Limited Height Area” of sub-precinct 1. It is further agreed that high rise office towers are not planned for development in the Queen Street Mall itself. On that understanding it is agreed that high rise development could be achievable on all of the sales applied, with the exception of Mr Buchanan’s Sale 2 at 136 Queen Street (hereafter referred to as the Mimi sale).
The Use of the Land –
As noted previously the current use of the land reflects ground floor retail banking operations, with all upper levels developed as commercial offices. Mr Jackson sees the current use of the subject land as its highest and best use, and has valued it accordingly. In his initial valuations summary report exchanged on 26 March 2002, under Rule 23 of the Land Court Rules 2000, Mr Jackson defined the subject land as “not a retail” site.
In his later version of that report, submitted at the hearing on 3 April 2002, he clarifies his understanding of what constitutes a “retail” site in the CBD. He argues that his understanding of a “retail” site is one that is either wholly, or the substantial part of which, is devoted to retail activity. However in his report of 3 April 2002 in section 5.1 he defines the ground floor use as being for retail/service activity. In the end nothing rests upon that apparent difference, and it is clearly Mr Jackson’s view that the existing ground floor banking operations reflects some type of retail or service activity associated with normal client service patronage. He argues that rental returns reflect levels comparable to a very large retail bookstore, but lesser than smaller fashion or general stores.
In respect of the meaning of the word “retail” I note that is taken to refer to the sale of goods in small quantities at a time, and usually not for resale (Concise Oxford Dictionary). That definition is also expanded in the section 9.3 of the Town Plan of 1987, where it defines “retailing” as follows:
“Retailing – a strong, compact, economically viable CBD retail heart is essential. This will assist in the retention and expansion of its role as a provider of specialised, infrequently purchased goods and services which require a large, metropolitan-wide catchment. Retailing in the CBD and Fortitude Valley also provides goods and services to residents close to the Central City and to Central City residents and workers.”
However the extent and type of retailing space available upon the subject land is a matter of dispute between the valuers. Mr Buchanan concedes that he is unsure of the type of retailing activity that might be contemplated on the subject land. He speculates that an area of 2, 127 m² could attract perhaps a major supermarket or other smaller retailing enterprise. He draws comfort from similar smaller shops in the Mall, but agrees that the retailing sites would be more restricted on the subject land than say, on the common sale at the MacArthur Chambers site. Mr Buchanan further speculates that an enterprising developer might make further use of traditional retail space upon either or both a basement level, or the first floor level. However he acknowledges development of a basement level would involve loss of some underground parking spaces.
Mr Jackson rejects those hypotheses, noting that the subject land is too small to attract a major supermarket, where minimum size areas of between 2,500 m² and 5,000 m² are required. He further notes that at the existing market rental return of about $200 per square metre for such a supermarket site, the return on such an investment could not be justified. Mr Jackson also notes that the relatively smaller area of the subject land would make it virtually impossible to attract a major anchor tenant, absolutely indispensable to the economic viability of retailing complexes.
Mr Jackson also argues that multi-level retailing is unsuccessful, unless an anchor tenant can be persuaded to locate on the various levels, in order to encourage through circulation by patrons. Mr Jackson concedes that the best that could be expected on the subject land could be some “spin-off” from adjoining retail premises. Mr O’Rourke suggests that close proximity to the Mall might provide that nexus for spin-off by patrons. Mr Jackson concedes there could be some spin-off, but argues that the subject land would not be a destination site, such as at the MacArthur Chambers site. However, he agrees that the relative rental value of the ground floor retailing on the subject land would be superior to the ground floor retailing on any of his sales, other than the common MacArthur Chambers sale.
In considering the relative rental returns on the subject land, Mr Jackson uses the current building as a guide to the likely percentage returns from the retail and commercial uses. He estimates an opinion of about 90 to 95% rental return from the commercial offices and 5 to 10% rental return from the ground floor retail. Mr Buchanan does not dispute those figures. Based upon that relative income, Mr Jackson argues that an impressive entrance and lift foyer would be required on the ground floor similar to the current entrance on the Queen Street frontage of the subject land. Such an upmarket foyer would further restrict the scope for ground floor retail space.
Mr Buchanan agrees that he had been unable to research potential retail developments upon the subject land, but notes that three levels of retailing are now proposed in the heritage building on the common MacArthur Chambers sale. Mr Buchanan also relies upon his experience as the valuer responsible for valuing the CBD for Brisbane for the last three years. He also assumes that under the town planning regime effective in the CBD, a developer would have a reasonable level of confidence that the land could be developed to its highest and best use. He has based his valuation upon that assumption, and his understanding of the recent expansion of the “retail heart” area, and applied an added premium to the unimproved value to reach $16,000,000.
Mr Buchanan sees the retail areas as having similar value to those in the Mall, which are in close proximity. However it is noted that the Mall is separated from the subject land by busy Edward Street. Mr Buchanan argues however that the subject land has the added potential of the commercial office space, not available to the Mall properties. He argues that the MacArthur Chambers site will also attract buyers across from the Mall, some of whom would be attracted to the subject lands. He therefore sees the subject land as a retailing plus commercial site, with excellent exposure and location.
Comparison of Sales -
Both valuers agree that the preferred method of determining unimproved value is by seeking comparisons with sales of comparable vacant or lightly improved lands in the relevant periods. (PH Clough v Valuer-General (1981-82) 8 QLCR 70 at 77; R and MM Barnwell v Valuer-General (1990-91) 13 QLCR 13 at 17; WM and TJ Fischer v Valuer-General (1983) 9 QLCR 44 at 46; and also in Commonwealth v Arklay (1952-53) 87 CLR 159 at 170). In Arklay the High Court also noted that comparable sales are “often not available”.
However, in relying on the use of comparable sales, the experienced valuer needs to ensure that he does not rely entirely upon only limited sales, where an error of judgment in applying the comparable sales could lead to an error in the final valuation. I note for example in Waalt Homes v Road Construction Authority (1987) 64 LGRA 346, where Gobbo J said at page 354:
“It is well-established that the use of comparable sales is to be preferred as the primary method of valuation, and it is obvious that the hypothetical development analysis method offers many opportunities for error in its various assumptions and calculations. But this argument can be given too much weight, for one error of judgment in applying a comparable sale can readily lead to a significant error in the final valuation. Particularly is this so if there are few sales and no obviously discernible trend.”
In the current matter both experienced valuers have sought to rely upon some sales of quite disparate value in order to support their basic conclusions derived from the common sale of the MacArthur Chambers site. In placing reliance upon such varying comparabilities of the sales, I seek guidance in Brewarrana Pty Ltd v Commissioner of Highways (SA) (1973) 32 LGRA 170, where Wells J said at page 179-180:
“It is general valuation practice for sales characterized as comparable sales to be used as bases for the valuation of lands said to be similar. But allowances must always be made before such sales can be so used. No two parcels of land are identical in all respects: the sale price of any given piece of land is not necessarily the price at which it ought to be sold, or the same thing as its true value. Before using any allegedly comparable sales, therefore, the valuer must consider whether, having regarding to the circumstances (using that word in its broadest sense) appertaining to the parcel of land in question, and to the transaction of sale, there are sufficient similarities to the circumstances appertaining to the subject land and to the notional sale presupposed by the test formulated in Spencer v The Commonwealth of Australia and in later cases to warrant a court’s reasoning from the sale price paid under the allegedly comparable sale, with or without other evidence, to a value for the subject land. … there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. It is, in my view, all a matter of degree: some adjustment is always necessary; too much adjustment will render it unsafe to use a sale, subject to such a degree of adjustment, for the purpose of the reasoning process in the comparable sales method. Just where the line is to be drawn is, it seems to me, the very sort of question that is fit for the expert valuer to determine; the assessment of the risks of adjustment is peculiarly within his sphere of skill.”
As Mr Buchanan advises he has sought sales of comparable retail lands, seeking to make some further allowance for the additional use as commercial offices. Clearly he has placed considerable emphasis upon the strategic location of the subject land in the “Retail Heart” of the CBD, and close by to the pedestrian Mall. However it is not refuted that at least 90% of the rental income of the subject land is from commercial offices, with only 10% received from retail banking use.
Clearly there need to be a significant difference in the rate per square metre for retailing rental use, compared to commercial office rates per square metre, if Mr Buchanan’s approach is to be given economic significance in his choice of sales. While location in the same “Retail Heart” area has a major bearing upon the value of the sales, the potential to return an acceptable revenue from the investments must also be considered in establishing the highest and best use of the land.
In arriving therefore at the highest and best use of the land, we need to consider whether the subject land should be compared on the basis of its retail potential with further commercial potential; or as a commercial site with some additional retail potential. The highest and best use will of course relate only to those uses which are legally possible, both of which in the current matter would appear legally obtainable on the subject land.
Mr Buchanan provides the following analyses and comparisons:
·Sale 1 – (259 Queen Street – Lot 15 on RP 804987) – this is referred to as the MacArthur Chambers sale, which is zoned “Central Business” and has a total area of 6,629 m². The sale is located immediately to the south-east of the subject land across Queen Street, and fronting Queen, Edward and Elizabeth Streets. The sale is partly occupied by the old historic MacArthur Chambers building, which is protected under heritage legislation. The sale sold in March 2000 for $35,000,000, and is the common sale between the two valuers, and their agreed key sale. Mr Buchanan sees the sale as overall superior to the subject land, and inferior on a rate per square metre because of its larger size and inferior location.
In analyzing that sale both valuers have sought to separate the area of the historic MacArthur Chambers building (1,100 m²) from the remaining vacant lands, which subsequently is now being developed as a sub-regional shopping centre, and which will provide an area of 11,745 m² of retail space, and 423 car parking spaces. The historic building occupies the corner position of Queen and Edward Streets, and is leasehold land occupying 1,100 m². The remaining vacant land has an area of 5,529 m².
Mr Buchanan initially accepted advice from the purchaser (Leighton Properties) that the historic building site had been apportioned at $7,000,000, leaving the balance of $28,000,000 (or $5,064 per square metre) for the vacant land. Mr Jackson values the historic building site at $8,500,000, leaving the balanced vacant land at $26,500,000 ($4,793 per square metre). Mr Jackson bases his conclusion on the sale, shortly after the initial sale, involving the top 9 levels of the heritage building for conversion to residential properties at $7,000,000.
As the basement, ground and mezzanine levels of the building were retained by the initial purchaser for retail development, Mr Jackson values those lower levels at $1,500,000. During the hearing Mr Buchanan concedes that the value of $8,500,000 would be more appropriate for the total historic building site. It is also noted that the resulting figure of $26,500,000 for the remaining land agrees with the figure allocated for that parcel at 1 October 2000 by the respondent.
Mr Buchanan advises that he had subsequently become aware of the later resale of the residential lands, and he now agrees with Mr Jackson on the apportioned value of the vacant land. Mr Buchanan argues that he has applied that figure of $26,500,000 in his comparisons with the subject land.
In his comparisons with the subject land Mr Buchanan sees the exposure of the MacArthur sale towards the Mall area as inferior to the subject land, because of the presence of the old historic building. He further argues that the location of the MacArthur sale is further removed from the Mall, and is also a larger area than the subject land, thus reflecting a lower rate per square metre. On a rate per square metre basis he sees the sale as inferior to the subject land. Mr Jackson sees the MacArthur sale as slightly superior on a rate per square metre basis.
Mr Jackson rejects Mr Buchanan’s comparison on a rate per square metre, arguing that it is inappropriate to allow for a reduced rate per square metre where the end use of the two sites are different. He notes that the MacArthur sale is being developed as a large destination, multi-level retail complex, including two major anchor tenants (a supermarket and a discount department store), as well as numerous specialty stores. He argues such a complex could not be contained upon the subject land. Mr Buchanan concedes that sometimes larger lots may be more valuable per square metre than smaller lots depending upon the type of retail use.
Mr Jackson notes that there is also the potential to subsequently develop a large commercial office tower, subject to sufficient demand for such tenants. Currently the demand for offices in that city location does not support the construction of the commercial tower. Mr Jackson also concedes that any future commercial tower on the MacArthur sale site could have some problems in arranging a suitable entry statement for the tower building, because of the retail complex below. Mr Buchanan argues that the subject land already benefits from the high rise commercial uses, although he concedes that for the purposes of this matter the subject land must be valued as if it were vacant land.
Mr Jackson further argues that when considering the highest and best use of the MacArthur sale, its larger area and three street frontages provides greater flexibility for retail development. He notes also that the lower three levels of the heritage building have been retained by the purchaser for integration into the overall retail complex. He advises that will provide direct pedestrian exposure and access to the Mall for the MacArthur sale retail complex, which apparently is to be named “MacArthur Central”, thus capitalizing upon the historic nature of the site.
Mr Buchanan explains that in valuing the MacArthur sale site it has historically been valued as two apportioned parcels fronting Queen Street and Edward Street. While the overall rate per square metre was $5,064, that was apportioned into $6,200 per square metre for the Queen Street parcel, and a lower rate about $4,000 per square metre for the Edward Street parcel. It is agreed by both valuers that had the heritage building not occupied the corner location, then the overall rate for the MacArthur sale was likely to have been greater than $5,064 per square metre.
In drawing comparisons with the subject land, Mr Buchanan argues that, because of its corner location, and greater exposure to the Mall, the subject land is seen as superior to the Queen Street apportionment of the MacArthur sale at $6,200 per square metre. Mr Buchanan has applied $7,522 per square metre for the subject land. However he concedes that the purchaser of the MacArthur also owned and controlled the heritage building on that corner, and that would provide a further benefit to any experienced purchaser of the adjoining vacant sale land. He also agrees that there historically had been retail use of the bottom part of that building in the past. However he was not sure that it would be approved as retail use again, but concedes that internal refurbishment was now occurring. Mr Buchanan also agrees that by excluding the heritage building site from the analysis of the overall MacArthur sale, he had removed any impact of the heritage listing from the remaining vacant land.
In applying the apportionment to the MacArthur sale site, Mr Buchanan explains that while he had analysed the rate of vacant land at $5,064 per square metre, in his application of that sale to that site at $26,500,000, he had allowed any benefit of doubt to the owner. He argues that he had therefore increased the rate per square metre of the Queen Street apportionment by about 15% based upon the rate of $6,200 per square metre for that parcel, while making a larger increase in the apportionment in Edward Street. He argues that he could have applied an increase of about 30% to the Queen Street parcel, but decided to allow any benefit in relativity to the Queen Street properties. As a result of that change in apportioned relativities, he argues that the subject land had the benefit of a “discount” in its applied value.
In explaining his actions Mr Buchanan notes that the word “discount” is really a misunderstanding of his process, which is in reality allowing a conservative application of the sales evidence. He agrees such conservative applications varied across the subject land and the sales, but notes that that occurs depending upon the circumstances of each sale. Mr Needham queries those variations, and argues that any such discretion must be exercised consistently across each property. (Bignell v Chief Executive, Department of Lands, (V92-65) Land Appeal Court, 4 March 1996, unreported, at page 11.
Mr Buchanan further argues that the recent Howard CHIA and MacArthur sales reflect the market tendency to see retail activity moving more towards Edward Street.
·Sale 2 – 136 Queen Street – (Lot 1 on RP 114640). This sale is at the corner of Queen and Albert Streets, has an area of 1,716 m², and is referred to as the “Mimi” sale. The sale is an improved property with a 133 year old two-storey building; and is basically developed as ground floor and basement retail space (9 leases) in what is generally accepted as perhaps the most valuable retail space in the CBD. The sale fronts the Mall and sold in August 2000 for $17,055,000. There is some minor office space on the first floor above, although there is no significant entry access to that upper floor. Mr Buchanan sees the sale as overall inferior, but superior on a rate per square metre because of its position and smaller size.
In analyzing that sale Mr Buchanan estimates the added value of the improvements at $4,580,000, giving an analysed land value of $12,475,000 ($17,423 per square metre). He chose the “Mimi” sale because, other than a sale of the Mathers building in 1996, there had only been four sales in the Mall in recent years. The “Mimi” sale was selected because it represented a corner location in the Mall, and it demonstrated an increase of 46% above the former values applied to that property. By comparison the MacArthur Chambers sale reflects a 30% increase over the former land values. The “Mimi” sale was seen as a potential development site over time, but with a good holding income in the intervening period. There was no potential for a high rise commercial development on the “Mimi” sale.
Mr Jackson rejects the use of the “Mimi” sale which he sees as an investment sale, and not reflecting values for redevelopment purposes. He notes that rental values up to $7,925 per square metre for the actual corner retail shop supports that conclusion. Mr Buchanan cannot refute that conclusion and concedes that analyzing an investment type sale back to the raw land value is a difficult task. Mr Jackson advises that the new owner had subsequently negotiated extended leases for five years supporting the investment nature of the sale. It is also agreed that any analysis of that sale would involve a range of issues including the relative level of rental income, and the nature of the leases.
In his analysis of the “Mimi” sale Mr Buchanan has relied upon estimates from Rawlinson’s Guide to Building Costs. He agrees that it was difficult to find an exact definition of the building category of the “Mimi”, sale but he has selected a range between a City department store ($1,170 per square metre), and a high standard regional two-storey shopping centre ($1,270 per square metre). In his analysis he adopts a rate of $1,235 per square metre (Exhibit 6).
In his analysis of that sale, Mr Buchanan allows for professional fees (12%), interest (6.3%), profit and risk (12.5%), professional and holding charges, and depreciation and obsolescence (30%). He makes no allowance for existing leasing arrangements, concluding an analysed land value of $12,475,000 ($17,423 per square metre).
While he provides no detailed analyses of the “Mimi” sale, Mr Jackson advises that he had separately analysed that sale for another purpose in respect of a valuation for an improved building nearby to the sale. Mr Needham suggests a more appropriate analysis of the “Mimi” land might be in the order of $13,000 per square metre. While Mr Jackson places no reliance upon the “Mimi” sale, he argues that because of the difficulties of identifying the land, improvements and market variations in existing lease value, there are always likely to be significant variations in the concluded rate per square metre. He notes that as the variations between the rates for the “Mimi” sale ($17,423 per square metre) and the rate applied to the subject land ($7,522 per square metre), reflect a factor reduction of 230%, then any error in the “Mimi” sale analysis would result in a significant error to the subject land.
Mr Buchanan concedes that there are difficulties in analysing such an improved sale, but argues that his building cost of $1,235 per square metre is realistic, as is also his low level of depreciation (30%) due to the strategic position of the “Mimi” sale; and also his low profit and risk factor (12.5%). He also concedes that the future rental incomes might be negatively impacted should Sunday retail trading becoming more widely adopted outside the CBD. However he argues that was likely to be offset by increasing numbers of residential accommodation in the CBD. However he concedes that he did not assess the market relevance of the existing leases on the sale, and whether any variations from normal market levels should be assessed in the analysis. He argues however that as the value of the buildings cannot be anything less than their replacement cost in arriving at their added value (section 5(2)), then he feels he has adequately allowed for any impact of the leases.
In concluding his comparison Mr Buchanan has relied upon his wide experience of market sales in the CBD over the last three years. While he has merely chosen the two above sales, he argues that they reflect the broader range of sales in the CBD. Mr Buchanan also notes that the subject land sold in 1998 as a fully developed site for $116,500,000. However he concedes that sale is very difficult to analyse, and an analysis of that improved sale reflected a land value well in excess of the value determined from comparisons with the vacant land sales. That supports the conclusion that such sales tend to be unreliable in determining unimproved value, a principle supported by court precedents. Neither Mr Buchanan nor Mr Jackson place any reliance upon that improved sale of the subject land.
In summarizing his comparison with the MacArthur sale Mr Jackson sees that sale as slightly superior to the subject land on a rate per square metre basis, due to its substantially superior retail component, because of its larger street frontage and size. Mr Jackson has adopted a figure of $4,750 per square metre which he argues is at the higher end of his overall range of sales evidence between $1,982 per square metre and $4,793 per square metre.
To support his conclusions Mr Jackson also provides six sales in addition to the common sale of MacArthur Chambers:
·Sale 2 – (120 Edward Street – Hall Chadwick Centre). This sale is an area of 1,822 m² and is located on the corner of Edward Street and Charlotte Street, about 240 metres south-east of the Mall. The sale has subsequently been developed with a twenty-two-storey commercial office building with ground floor retail space. The sale sold in May 1998 for $6,000,000, with an agreed twelve months settlement period. That settlement was analysed as an adjustment to the sale price by Mr Jackson ($824,065) giving an analysed sale price of $5,175,935 ($2,841 per square metre).
· Sale 3 – (75 Eagle Street – Riverside Development Stage 2). This sale is an area of 3,663 m² and is located about 300 metres east of the Mall, and abuts the Brisbane River. The purchaser is currently proceeding to develop a fifty-three-storey commercial office and residential development. The sale was negotiated on a 12 month settlement period, and sold in December 1998 for $15,000,000. Mr Jackson has analysed an adjustment for the settlement at $853,808, giving an analysed sale price of $14,146,192 ($3,862 per square metre).
· Sale 4 – (67 to 69 Albert Street – New York Enterprise Pty Ltd). This sale is an area of 1,316 m² and is located about 300 metres south-east of the Mall at the corner of Albert and Mary Streets. The sale was purchased for $4,000,000 in November 1998 for development for commercial offices with ground floor retail. Subsequently the land was resold as Sale 5. The settlement arrangements including a 12 month period, which Mr Jackson has analysed as an adjustment of $350,820, giving an analysed sale price of $3,644,180 ($2,769 per square metre).
· Sale 5 – (67 to 69 Albert Street – Devine Limited). This is the resale of Sale 4 in December 2000 for $4,750,000, following planning approval for construction of thirty-nine levels of residential units with ground floor retail use. Mr Jackson argues that the increased sale price reflects the higher density of residential apartments now approved. He allows $120,000 for adjustments for improvements, giving an analysed sale price of $4,6030,000 ($3,518 per square metre).
· Sale 6 – (175 Eagle Street). This sale is located at the corner of Queen and Eagle Street and has direct frontage to the Brisbane River, and has an area of 3,459 m². The parcel has an L-shape, and at the date of sale contained substantial earthworks and foundation works, and basement car parking, suitable for commercial office development. Subsequent to this sale a seventeen level office building has been constructed upon the site. The sale sold in December 2000 for $21,500,000, and after allowing for improvements was analysed at $10,304,000 ($2,979 per square metre).
· Sale 7 – (109 to 121 Charlotte Street – Martins College Centre). This sale is an L-shaped property with frontages to both Charlotte Street and Mary Street, and has an area of 2,106 m². The Charlotte Street frontage has subsequently been developed as an eleven-storey office building, with retail use on the ground level, and car parking on the podium levels. The Mary Street frontage remains vacant. The sale sold in May 1998 for $4,750,000, and after allowing for improvements was analysed at $4,174,340 ($1,982 per square metre).
Mr Jackson notes that each of those additional sales were chosen for comparison purposes because they reflect a similar highest and best use as the subject land. Each of the sales was predominantly for high rise commercial office development, with retail use on the ground level. Mr Jackson concedes that the retail use generally were for food retailing purposes, but he argues that those are designed to complement the major use of each site, noting that is common practice for such uses.
In summarizing those comparisons Mr Jackson argues that a prudent purchaser would see the subject property as having a ground floor retail use superior to the Eagle Street sales, the Mary Street corner of Albert Street, and the Charlotte Street sale, and would have some similarities with the Edward Street sale. However he argues that the subject land ground level retail space would be very different to the MacArthur site, which has the capacity to develop a sub-regional capacity shopping complex.
In drawing direct comparisons of the retail ground floor uses, Mr Jackson concedes that an adjustment in value needs to be made for the closer proximity of the subject land to the Mall. In his opinion an increase of 67% above the rate for the 120 Edward Street sale ($2,841 per square metre) amply reflects the superior nature of the retail use on the subject land ($4,750 per square metre). He argues from a commercial office perspective each of the additional sales competes directly with the subject land for tenants. He further argues that commercial office tenants also appear to favour a location along the Brisbane River where river views can be maximised. He notes that major commercial anchor tenants such as prominent legal firms demonstrate that preference.
Mr Jackson further argues that the sales evidence supports his conclusion that in respect of commercial uses for offices there is not a large variation in the impact of the retail use on the ground level. He notes that while the 75 Eagle Street ($3,862 per square metre) has a preferred Brisbane River frontage, any comparison between that site and the MacArthur ($4,793 per square metre) is not large, bearing in mind that the MacArthur sale has the potential for three levels of retailing in addition to the high rise commercial offices, subject to proven demand for the latter.
Changes in the Market –
To support his conclusion that the CBD market has increased since 1998, Mr Buchanan advises that there has been generally accepted market levels that have been agreed upon by the business community and the respondent over a period of negotiating objections, and also numerous Land Court rulings. Mr O’Rourke notes that the history of previous valuations, and their status under s.33 of the Act, indicates that there has been a change in the market level. Mr Buchanan notes for example the sale and resale of 67 to 69 Albert Street property over a period of two years, which shows a rise of $750,000 (19%).
Mr Buchanan agrees that there are different markets in the CBD for purely retail and purely commercial office properties, as well as separate markets for commercial office lands with some retail components, and also residential developments with some retail components. On that basis he concedes that it was possible that the 67 to 69 Albert Street property resale for high rise residential purposes to be a different market segment to its previous anticipated use for commercial office purposes. He also agrees that those different sub-market segments can vary up or down depending upon the demand for that selected type of use at any point of time.
Mr Jackson disagrees that the 67 to 69 Albert Street resale reflects a rise in the commercial office sub-market. He argues that it more correctly reflects the substantially higher density return on the residential development proposal subsequently approved. More importantly he also argues that the resale of that property also reflected the lower demand for commercial offices, as the previous owner was unable to complete an economic development on that site for commercial office purposes. On that basis he argues that the resale demonstrates that there was in fact no increase in commercial office lands in that period. Mr Buchanan also agrees that the Devine resale was conditional upon gaining planning approval for residential purposes, and that the increased sale price reflected the certainty of gaining that planning use.
In support of the general level of increase in CBD values since 1998, Mr Buchanan argues that the MacArthur sale is reflecting a 30% increase over its former unimproved value; and the “Mimi” sale showed a 46% rise in value. He notes that the 120 Edward Street sale in 1998 was seen as the beginning of CBD property value increases.
Mr Buchanan further advises that there are differing levels of value in certain physical locations of the CBD. He agrees that the golden triangle of Edward and Eagle Streets and the Brisbane river lands are gaining significantly as the preferred office location, but argues that the other sales in Edward Street and Albert Street are a secondary location compared to the Mall. Mr Jackson analysed rates for the sales would support that conclusion.
Heritage Impacts –
While the only impact of heritage protection included in this matter relates to the MacArthur Chambers sale, its potential impact upon comparisons between that sale and the subject land needs to be considered. The analysis by both valuers to exclude the land containing the heritage building of MacArthur Chambers, does remove any heritage considerations in the analysed sale price rate per square metre adopted. However that does not eliminate any exposure impacted upon that site for comparison purposes.
It is agreed by both valuers that normal market practices support that a heritage building does provide impediments upon development due to the need to retain certain elements of a historical nature. Mr Buchanan argues that those impediments would result in some reduction in the value of land, compared to what it might have been had heritage restriction not existed. To support that consideration he relies upon decisions of the courts, and in particular a recent decision of this Court in Mayne Estate v Chief Executive, Department of Natural Resources and Mines (AV1999-632 & Ors) 26 February 2002, unreported. In that matter, known as the Brisbane Arcade, the learned Member made significantly allowance for heritage impacts upon that Mall property. Based upon such reductions in value because of heritage restrictions, Mr O’Rourke argues that an analysed sales price greater than $4,793 per square metre might have been realized without the heritage constraint upon the building. Mr Needham concedes that point.
Delayed Settlements –
In his analysis of several of his sales, Mr Jackson has sought to bring all sales prices to a common basis at the relevant dates of sale. To that end, where there has been an extended settlement period specified in the sale, he makes allowance for anything beyond the normal cash sale basis of payment of the balance of funds within 60 to 90 days. By that process he allows a deduction for the extended settlement in accordance with the present value of the balance of the sale price deferred by the period of the deferred settlement set out in the contract of sale. To support that approach Mr Needham refers among others to a decision of this Court to Frizelle & Ors v Chief Executive, Department of Natural Resources (AV98-765) 10 September 1999, unreported, at page 40.
Mr Buchanan accepts the principle of the present value of money deferred, but argues that it is common practice in the development industry for similar settlement periods to be included in contracts of sale. He argues that the sale price negotiated by the parties would have allowed for the extended settlement period, and would therefore have reflected the value to both parties at the relevant date.
In the current matters there is no evidence that any of those sales included provision for the payment of interest upon the balance due over the settlement periods. In those cases, where the land is sold on credit without interest, then such a sale could not be construed to reflect the equivalent of the cash sale. That was clearly clarified by the High Court in The Federal Commissioner of Land Tax v Duncan & Ors [1915] 19 CLR 551, where Isaacs J (CJ) said at page 559:
“As far as payment is concerned, it may be for cash, or it may be, what I regard as equivalent, upon credit with interest. If cash is given on the spot or if cash is not given for (say) three or six months but interest is given – that is the regular current interest – those are the same thing, because in both cases alike the vendor has the use and benefit of his money. If he were to sell on credit without interest, that would not be equivalent to cash.”
In the current matter the vendor who negotiated the agreed settlement terms of the sale would have been aware that he would not have had the use of the balance of the sale price for the period of the deferred settlement. By similar logic the purchaser would have also been aware that he could use the balance of the sale price to earn interest for that period to his own benefit. The logic of Mr Jackson to therefore seek to determine the present value of those deferred payments is supported, in my opinion, by the understanding of what constitutes “reasonable terms and conditions” as defined by the High Court in Spencer v The Commonwealth of Australia [1907] 5 CLR 418, where Isaacs J said at page 441:
“To arrive at the value of the land at that date, we have, … to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property.”
It must be the terms and conditions of the value of the market as they existed at the relevant date of sale. That would exclude any subsequent variations in market rates during the period of deferred settlement. (The Commonwealth of Australia v Millidge [1952-53] 90 CLR 157, per Dixon CJ and Kitto J at page 163). Because the balance of the sale price is virtually money owed to the purchaser, subject to the conditions of sale, its risk of realization to the purchaser must be secure. A fair representation of such allowance for present value, in my opinion, would reflect the then long-term Commonwealth bond rate at the date of sale (say 5%). Subsequent to confirmation of those settlement adjustments, in principle, I accept the process of deferred settlement adjustments.
However in respect of the sale of 120 Edward Street, I note that delayed settlement was balanced by income generated to the purchaser from an existing car park on the site. There was no quantification of that additional benefit, which may have balanced out any loss from the delayed settlement. However such additional income from the car parking would have been as a result of actions subsequent to the date of sale, and should not be used to further adjust the sale price. On that basis there is evidence to support deferred settlement adjustments to the 120 Edward Street, 75 Eagle Street and the first sale of 67 to 69 Albert Street.
Adopting Mr Jackson’s method of allowing for a 10% deposit compared to a normal cash sale over 90 days (three months) (transcript 45), I will allow adjustments for the present value at 5% for the following:
Sale Balance Period Present value Adjustment 120 Edward Street $5,400,000 9 months $5,204,819 $195,181 75 Eagle Street $13,500,000 9 months $13,011,975 $488,025 67 to 69 Albert Street $3,600,000 9 months $3,469,860 $130,140
If I then adjust Mr Jackson’s analysed sale values by those amounts, I can calculate the following sales:
Sale Analysed sale price Rate per square metre 120 Edward Street $5,804,819 $3,186 75 Eagle Street $14,511,975 $3,962 67 to 69 Albert Street $3,869,860 $2,941 While those adjusted rates per square metre reflects slightly higher comparable sales, the overall range of sales analysed remains constant at $1,982 per square metre to $4,793 per square metre (see paragraph [56].
Relativity –
Mr Jackson draws further support from relativity checks with the applied values of other prominent sites in the CBD of comparable size, and which are used solely for commercial office purposes. He notes those sites as:
Property Area Analysed rate 295 Elizabeth Street (Comalco House) 3,026 m² $3,842 per square metre 10 Eagle Street (AMP Place) 3,477 m² $3,566 per square metre 66 Eagle Street (Central Plaza 2) 2,510 m² $3,705 per square metre 75 Eagle Street (Riverside Centre) 3,663 m² $2,771 per square metre 345 Queen Street (Central Plaza 1) 2,979 m² $4,028 per square metre It is noted that the current applied rate to the 75 Eagle Street property is only $2,771 per square metre, while the above analysed rate of the sale of that property reflects $3,962 per square metre (43% increase). However Mr Jackson argues that the applied value of any of the above five properties does not support the $7,522 per square metre that has been applied to the subject land.
Decision:
Application for costs –
Before proceeding to the merits of this matter, I turn to the application for costs by the respondent in respect of costs thrown away as a result of apparent failure by the appellant to fully satisfy Land Court Rule 23(1)(c). Mr O’Rourke argues that inconsistencies between the summary of proposed evidence of Mr Jackson, lodged with the Court on 26 March 2002, and the actual valuation report later submitted to the Court at the hearing on 3 April 2002, has resulted in the respondent incurring additional unnecessary costs in preparing for this matter.
Mr O’Rourke argues that the summary report of 26 March 2002 identified the subject property as “not a retail site”; while the final report of 3 April 2002 identifies the highest and best use of the site as being “for commercial development with the ground floor component being utilized for retail/service activity”. Mr Needham rejects that understanding of the intentions of the summary report, in respect of the use of the word “retail site”. However he concedes that a previous reference to s. 28(1)(g) of the Valuation of Land Act had been removed from the later document at his direction, as it was in his opinion a matter of law that s. 28(1)(g) did not relate to the current matter. He advises also that the deletion in the second report of any reference to without prejudice discussions between the parties, was also at his directions in accordance with the law.
To support his later description of the highest and best use as commercial with ground floor retail use, Mr Jackson notes that it is clearly its current use. He notes also that the apparent misunderstanding of the use of the words “retail site”, would appear to relate to a lack of formal definition of terms used in such uses (see paragraph [21]. Mr Jackson advises that his understanding of a “retail site” relates to one which is exclusively, or at least predominantly, used for retail purposes. He notes such “retail” use exists generally in the Queen Street Mall area. To further support that conclusion he notes that each of his sales evidence has a similar highest and best use to that evident upon the subject land. In the end I have exercised my discretion under Court Rule s. 23(3) and accepted the appellant’s explanation, allowing the later report to be admitted as evidence (Exhibit 3).
To support his argument that compliance with Rule 23 is a matter which should not be taken lightly, particularly where parties are not self represented, Mr O’Rourke draws reference to the decision on costs in respect of Chief Executive, Department of Natural Resources and Mines v Sabina Three Gorges Corporation Ltd (V00-43), 12 April 2001, to be reported. In that matter the learned Member considered the impact of changes to pre-trial conduct under the Civic Procedure Rules 1999 and the Land Court Rule 2000, and noted at paragraph 16:
“In the circumstances of the enactment of the new Rules it must be appreciated by parties coming before the Court, that particular in instances where parties are represented, the Court will be astute to utilise the Rules of the Court and to expect the parties to comply with orders made in reliance on the Rules.”
However that matter can be distinguished from the current matter as it dealt with the actions of an appellant withdrawing an appeal only six days prior to a hearing; and after three directions hearings; and formal orders of the Court just six days prior to the final decision to withdrawn the appeals. In the event the learned Member found in that matter that there had been some tardiness on the part of the appellant, and “a lack of concern that the orders of the Court ought to be complied with or a failure to have regard to the inconvenience and cost being borne by the applicant”. (paragraph 12).
In the end I find nothing in this matter which seriously infringes the spirit of Rule 23, and which would justify the awarding of costs against the appellant in respect of the pre-trial compliance. However I would suggest that future use of abridged summary statements rather than the full valuation report is a matter not to be pursued as a general approach to satisfying the rules.
The Use of the Land –
As discussed previously, there is now general agreement that the major use of the subject land is for commercial office purposes, with some retail use on the ground level, or perhaps even extending to the basement or first floor levels. The difference between the parties is the level of retail activity which might be successful upon the relatively limited size (2,127 m²) of the subject land. In summarising the opposing views of Mr Buchanan and Mr Jackson, I believe the difficulty of attracting an appropriate major anchor tenant to the subject land could be a significant problem in developing that site as a major retail centre, comparable to either the MacArthur Chambers or the Howard CHIA sites. I agree there was likely to be some “spin-off” of patrons from the Mall and those other two sites, but agree with Mr Jackson that would be inferior to either larger adjoining destination retail complexes.
If I then accept that dual-frontage rate for the subject land, allowing any doubt in respect of comparable rates per square metre for the smaller area of the subject land for retail use to the benefit of the subject land, I could then make an adjustment for the greater exposure of the subject land. Because of the likely superior retail potential of the Edward Street frontage compared to the Elizabeth Street frontage, some further adjustment for the Edward Street frontage would be appropriate. I note for example in the Mayne matter (supra), the evidence indicates relative rates for the Adelaide Street lands at something less compared to the currently agreed $4,000 per square metre for Edward Street frontage lands.
Mr Buchanan has applied a further factor of 20% to the subject land for both the additional access and exposure for its corner location to Edward Street and the Mall. I accept that principle, while noting that the “MacArthur Central” site will gain some exposure, and more restricted direct access to the Mall, through the integrated ground floor of the heritage building, which will restrict both because of the need to retain the external heritage character. On that basis I could conclude a rate of $6,046 per square metre or $12,860,000 for the subject land. While the current evidence does not appear consistent with the previous valuations under the Act, I note that those determinations of the subject land have never been tested before the courts. In the current circumstances I can only use the evidence before me.
While the sales evidence available to Mr Buchanan might indicate significant increases above the former unimproved values of some parcels, those sales were essentially for predominantly retail purposes. There was no evidence in this matter that a similar increase also existed for lands which were predominantly for commercial office purposes with some retail use on the ground level, as exists on the subject land, except for the MacArthur sale, the analysis of which I am now applying. I agree with Mr Jackson that the resale of the 67 to 69 Albert Street property reveals a sale for a different use for high rise residential purposes.
However I also caution against accepting Mr Jackson’s conclusion that the subsequent resale of 67 to 69 Albert Street demonstrated a lack of demand for commercial office development. It is, for example, possible that the decision by the previous purchaser of that parcel may not have demonstrated a lack of demand for commercial office purposes, but rather only an opportunity to maximise a quick profit for the higher residential use, a type of development not within the longer term intentions of that former purchaser. On balance I get little assistance in the current matter from that resale in respect of a rise in the market generally for commercial office lands.
However the difficulty with such assumptions is that any small change in the apportionment arrangements could result in a significant change in the concluded unimproved value. The above calculation of $12,860,000 is just slightly more than the previous value of $12,700,000 in 1996, and less than $13,800,000 in 1999, at a time when signs of the market place suggest a rise in values in the Mall area. However in the end I must do the best I can with the evidence before me. In that respect I note that s.66 of the Act establishes the role of this Court as follows:
“66. Upon an appeal under section 55 the Land Court or, upon the rehearing of any such appeal, the Land Appeal Court may –
(a)affirm the valuation appealed against; or
(b) reduce or increase the amount of that valuation to the extent necessary in its opinion to determine the same correctly under, subject to, and in accordance with this Act;”
If I then compare the adopted rates for the Mall area, including the Howard CHIA site ($7,967 per square metre), and the Brisbane Arcade site ($7,576 per square metre), I find that the subject land at $6,046 per square metre is not directly in the Mall, and its predominant use is for commercial offices not retail use. The subject land is also across busy Edward Street. I believe those relativities reflect the relative market level of those lands, and are also consistent with the relativity comparisons detailed in paragraph [82].
Conclusion:
Having considered the whole of the evidence I am persuaded that the appellant has partly proved his case. The appeal is allowed, the valuation of the Chief Executive is set aside, and the unimproved value of Lot 5 on RP 200175 is determined in the sum of $12,860,000.
NG DIVETT
MEMBER OF THE LAND COURT
1
0
0