Rostam Pty Ltd v Valuer General; Shavran Pty Ltd v Valuer General

[2011] NSWLEC 1387

Land and Environment Court

New South Wales

Medium Neutral Citation:

Rostam Pty Ltd v Valuer General; Shavran Pty Ltd v Valuer General [2011] NSWLEC 1387

Hearing dates:

26 May, 22 August 2011

Decision date:

14 October 2011

Jurisdiction:

Class 3

Before:

Miller AC

Decision:

(1)The appeals are allowed.

(2)523 - 527 Elizabeth Street Surry Hills. The land value under s 6A (1) of the Act is determined at $1,498,900 at the base date of 1 July 2007, $1,349,000 at each of the base dates of 1 July 2008 and 1 July 2009.

(3)529 - 531 Elizabeth Street Surry Hills. The land value under s 6 A (1) of the Act is determined at $1,142,800 at the base date of 1 July 2007, and $1,045,300 at each of the base dates of 1 July 2008 and 1 July 2009.

(4)The respondent is to amend the Register of Land Values to reflect the land values determined.

Catchwords:

Valuation of Land

Legislation Cited:

Valuation of Land Act 1916

Cases Cited:

Inez Investments Pty Ltd v Dodd (1979) 26 The Valuer 501
Trust Company Ltd ATF Opera House Car Park Infrastructure Trust No 1 v Valuer General (No3) [2011] NSWLEC 85

Category:

Principal judgment

Parties:

Rostam Pty Ltd (Applicant 30589, 30590 & 30591 of 2010)
Shavran Pty Ltd (Applicant 30592, 30593 & 30594 of 2010)

Valuer General (Respondent)

Representation:

Counsel
Mr D Miller (Applicants)

Miss M Carpenter (Respondent)
Solicitors
Gadens Lawyers (Applicants)

Crown Solicitors Office (Respondent)

File Number(s):

30589, 30590, 30591, 30592, 30593 and 30594 of 2010

Judgment

1. These are appeals under s 37 of the Valuation of Land Act 1916 (the Act) in respect of land values assigned under s 6A of the Act in respect of two adjoining properties 523/527 and 529/531 Elizabeth Street Surry Hills as at the base dates of 1 July 2007, 2008 and 2009.

1. Section 40(2) of the Act states that " on an appeal, the appellant has the onus of proving the appellant's case ."

1. Land value is defined in s 6A of the Act in the following terms:

(1) The land value of land is the capital sum which the fee-simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bone-fide seller would require, assuming that the improvements, if any, thereon or appertaining thereto, other than land improvements, and made or acquired by the owner or the owner's predecessor in title had not been made.

(2) Notwithstanding anything in subs (1), in determining the land value of any land it shall be assumed that:

(a) the land may be used, or may continue to be used, for any purpose for which it was being used, or for which it could be used, at the date to which the valuation relates, and

(b) such improvements may be continued or made on the land as may be required in order to enable the land to continue to be so used, but nothing in this subs prevents regard being had, in determining that value, to any other purpose for which the land may be used on the assumption that the improvements, if any, other than land improvements, referred to in subs (1) had not been made.

1. Land improvements are defined in s 4 of the Act and mean:

(a) the clearing of land by the removal or thinning out of timber, scrub or other vegetable growths,

(b) the picking up and removal of stone,

(c) the improvement of soil fertility or the structure of soil,

(d) the restoration or improvement of land surface by excavation, filling, grading or levelling, not being works of irrigation or conservation,

(d1) without limiting paragraph (d), any excavation, filling, grading or levelling of land (otherwise than for the purpose of irrigation or conservation) that is associated with:

(i) the erection of any building or structure, or

(ii) the carrying out of any work, or

(iii) the operations of any mine or extractive industry,

(e) the reclamation of land by draining or filling together with any retaining walls or other works appurtenant to the reclamation, and

(f) underground drains.

Background

1. The property 523/527 Elizabeth Street is owned by Rostam Pty Ltd while 529/531 Elizabeth Street is owned by Shavran Pty Limited (together the applicants). The parties agree that the appeals should be heard together having regard to the fact that the properties are adjoining, there is some connection in ownership and both companies have engaged the same firm of solicitors.

Land Values

1. The base date valuations assigned by the respondent were as follows:

523/527 Elizabeth Street	529/531 Elizabeth Street
1 July 2007	$1,660,000	$1,660,000
1 July 2008	$1,830,000	$1,830,000
1 July 2009	$1,830,000	$1,830,000

1. The contended land values before the Court were:

523/527 Elizabeth Street		529/531 Elizabeth Street
Applicant	Respondent	Applicant	Respondent
1 July 2007	$1,200,000	$2,150,000	$935,000	$2,900,000
1 July 2008	$1,200,000	$1,875,000	$935,000	$2,725,000
1 July 2009	$1,100,000	$1,875,000	$870,000	$2,725,000

1. One of the reasons for the most substantial increase in the contended land values in respect of 529/531 Elizabeth Street arose from the respondent's decision that this property should be valued under s 6A(2) and not s 6A(1) as it had been previously.

1. Registered valuers Mr Foley-Jennings and Mr Hill gave evidence on behalf of the applicant and respondent respectively.

Description

1. The properties are located on the western side of Elizabeth Street near Belvoir Street. In their respective joint reports the valuers agree on the following:

523/527 Elizabeth Street

Land area

• The land has a total site area of 392.37 m²
• The dimensions of the site are 13.41/13.41 x 27.71/28.22 metres
• The subject land is rectangular in configuration sloping gently down in a south westerly direction
• The land is serviced by Little Buckingham Street to the rear

Planning

• As at the relevant base dates the subject land was zoned 10 "Mixed Uses" in accordance with the South Sydney Local Environmental Plan 1998
• The maximum floor space ratio on the site is 2:1
• The maximum height limit on the land is 15 m
• The subject property is not listed as an individual heritage item under the relevant planning instrument nor is it listed under Schedule1 of the State Heritage Register

Existing improvements

• As at the relevant base dates the subject improvements comprised an older style two-storey building with roller door loading access from Little Buckingham Street to the rear.

Highest and best use

• As a mixed use site containing either retail/commercial or retail/residential unit uses with basement car parking

Land value basis

• The approach to value the subject land is in accordance with s 6A1 of the Act

Land improvement

• The level of excavation on the subject land is minimal and both valuers agree that there is little, if any, the value of excavation attributable to land improvements. Adopt value as nil

Floor space area

• 784.74 m 2

529/531 Elizabeth Street

Land area

• The land has a total site area of 291.2 m 2
• The dimensions of the site are 13.45/13.41 x 21.66/22.15 m
• The subject land is rectangular in configuration sloping gently down in a south western direction
• The land is serviced by Little Buckingham Street to the rear
• The land is set back from Elizabeth Street

Planning

• As at the relevant base dates the subject land was zoned 10 "Mixed Uses" in accordance with the South Sydney Local Environmental Plan 1998
• The maximum floor space ratio of the site is 2:1
• The subject property is not listed as an individual heritage item under the relevant planning instrument nor is it listed under Schedule 1 of the State Heritage Register
• As at the relevant base dates the subject land had approval for commercial retail/office use with a FSA of 2271.36 m 2 . This equates to an FSR of 7.8:1. This information has been sourced from Council's records - D 2007/1957

Existing improvements

• As at the relevant base dates are subject improvements comprised an eight-storey brick building with basement parking accessed from Little Buckingham Street to the rear

Highest and best use

• As a retail/commercial development with basement parking having regard to the existing approved commercial use on the subject land as at the relevant base dates

Site set back from Elizabeth Street

• The land was subject to a building the line the setback due to a proposed RTA road widening of Elizabeth Street that has now been abandoned. The land, known as Lot 10 in deposited plan 833333 is in the ownership of City of Sydney Council and adjoins the subject land to the East and Elizabeth Street to the West

Land improvement

• As at the relevant base dates the subject land contained an excavation that was used to basement parking. The site excavation of the subject property is a "land improvement" as defined in s 4(d1) of the Act. Therefore this benefit is reflected as an added value when assessing the land value. Once the land value of the subject site is established from comparable sales evidence then the added value of the land improvements, (benefit of the excavation) is to be allowed in the land value
• As at the relevant base dates for the added value of the land improvements, as per s 4 (d1) of the Act the valuers adopt:
• Base date 1 July 2007 $58,240
• Base date 1 July 2008 $69,160
• Base date 1 July 2009 $69,160

Floor space area

• 582.40 m 2 under planning controls current at the base dates.

Valuation basis

1. The valuers agree that the land values are to be assessed by direct comparison with comparable sales and that the comparable sales evidence should be analysed on a rate per m 2 of Floor Space Area (FSA). The Court notes and concurs in that agreement.

Comparable sales

1. Prior to the commencement of the hearing the Court viewed the subject properties and all of the comparable sales referred to by the valuers.

The sale of the subject properties

1. In Inez Investments Pty Ltd v Dodd (1979) 26 The Valuer 501 at 505 Carmichael J held:

Where persons answering the descriptions of willing but not anxious seller and willing but not anxious buyer enter into a binding contract for the sale and purchase of a particular piece of land, the value of that piece of land at that day is the price stated in their contracts. It follows that where a valuation of a piece of real estate is sought as at a particular date the most relevant information for analysis is the sale of that very property, if there be one, at or close to that date. The matters requiring analysis are the terms and conditions of the contract, and was it a voluntary sale of a not anxious seller and a not anxious buyer?

I conclude therefore that a prime matter for investigation when a valuation is sought is to ascertain whether there is current a contract for sale of the property and, if so, to make an analysis of that sale to see how it complies with the test of value as laid down in Spencer's case (1907) 5 CLR 418.

1. The subject properties, together with two adjoining properties (four in total), were sold by three vendors to three related purchasers, with vacant possession, by a single contract dated 4 December 2006 being some seven months prior to the first base date of 1 July 2007. The contract price was $9,820,000. The contract states that the transaction was not a taxable supply as the " vendor... is neither registered nor required to be registered for GST ".

1. The valuers agreed that the sale of the four properties in one line was an " arms length transaction ". Notwithstanding the fact that the contract provided a twelve month delayed settlement, which would logically indicate a higher price paid than for a settlement within the customary six-week period, the valuers also agreed that the sale price properly reflected the total market value of the properties sold. It was common ground that the improvements on 523/527 Elizabeth Street added no value to that property.

1. The sale price was apportioned between the three purchasers and referrable to specific properties. Rostam Pty Ltd was nominated as the purchaser of 523/527 Elizabeth Street and the similar property adjoining on the northern boundary at a price of $1 million each, Shavran Pty Limited was nominated as the purchaser of 529/531 Elizabeth Street for $7,400,000 while the property adjoining it on the southern boundary was purchased by Mr N Samadi for $420,000.

1. Mr Foley-Jennings gave evidence that the four properties were offered the sale, by auction, individually, some time shortly prior to December 2006. The highest bid for 523/527 Elizabeth Street and the similar property adjoining it on the northern side was $825,000 in each case. His evidence was that these bids were made by or on behalf of Rostam Pty Ltd. No evidence was adduced as to the highest bid in respect of the other two properties.

1. The schedule containing the special conditions relating to the sale of 529/531 Elizabeth Street refers to not only the land the subject of this appeal but to the land extending to the common alignment of Elizabeth Street in the ownership of the Council of the City of Sydney. Special condition 9 provides, in part, that " the vendor is in the course of negotiating a proposed transfer to itself or transfer directly to the purchaser " of the said Lot 10 DP 833333. In the event that a transfer does not occur by the date of settlement the price payable at that time for this property shall be reduced by $400,000. Provision is made that if Shavran Pty Ltd or its successor in title purchases Lot 10 within two years after settlement an adjustment to the price paid will be made. The area of this lot is 88.2 m 2 . $400,000 is equal to $4,535 per m 2 or $2,268 per m 2 of FSA. Neither valuer referred to this special condition. I have decided that no conclusions, which can be of assistance to me, can be drawn from that simple calculation.

1. Critically, no evidence was adduced by the applicants in these proceedings (who were the purchasers of three of the four properties referred to in the contract of sale) as to how the purchase price was apportioned. The apportionment may or may not have fairly reflected the market value of each of the properties and in the absence of evidence that could be tested I have come to the conclusion that no reliance can be placed on the apportioned purchase price.

523/527 Elizabeth Street

Comparable sales

1. Subject to the degree of comparability, sales of land which are either vacant or where the improvements are to be demolished provide the most reliable evidence of the land value. That is not to say that the sale of improved properties should be disregarded but the value of improvements is often open to conjecture.

1. Two sales were identified of what may be classed as vacant sites for predominantly residential development in the general vicinity of the subject property with two additional sales located in Darlinghurst.

147 - 149 Regent Street Chippendale

1. This property is located almost on the corner of Regent Street and Cleveland Street. The site area is 276.5 m 2 .

1. It was sold on 17 February 2010 for $900,000 with development approval (D 2008/1625) for the demolition of the existing building and the construction of a mixed-use building of three stories with a floor space ratio of 1.75 to 1 (483.9 square metres). The land is rectangular in shape with an irregular rear boundary which is lower than street level. The property does not join a rear lane while access from street frontage is difficult due partly to the difference in height between the footpath and the road pavement and the 24 hour slip lane from Cleveland Street to Regent Street preventing parking immediately in front of the property. A railway tunnel, in strata, is located beneath the property but in my opinion its presence is not material and was treated as such by the valuers. The ground floor of the new building is designed for retail use and the upper floors for residential purposes.

1. The valuers agree that the sale shows $1,808 per m 2 of the FSA after adjustments for demolition costs, the value of the development approval ($30,000) and market movement to 1 July 2009. However, I disagree. I have come to the conclusion that the sale shows $1,777 per m 2 of FSA after deducting the value of the development approval at 10% of the sale price ($90,000) and adding $50,000 for demolition costs. I make no allowance for market movement over the seven months following the 1 July 2009 base date.

1. Comparison to the subject property exposed divergent views. Mr Foley-Jennings considers Chippendale to be superior to Surry Hills and makes a deduction of 22.5% to arrive at a figure of $1,401.27 per m 2 FSA for the subject property as at 1 July 2009. Mr Hill considers this property to be " far inferior " to the subject property to the extent of 33% and arrives at a figure of $2400 per m 2 FSA; $1000 per m 2 FSA higher than Mr Foley-Jennings.

1. During his evidence Mr Hill referred to schedules showing differences in prices for houses and units between Chippendale and Surry Hills but these schedules were not tended as exhibits. Subsequent to the conclusion of the hearing, and with the consent of the applicants, these schedules were provided to me on the basis that " the material was not previously shown by Mr Hill to Mr Foley-Jennings and was not the subject of any discussions between them ."

1. These schedules show that in the year ending December 2007 the median house price in Surry Hills was 44.3% higher than in Chippendale, in the following year 32% higher and in 2009 24.4% higher. In the year ending 2010 the median house price for Surry Hills was 22.9% higher than Chippendale while the median price for units was 32.7% higher. I agree with Mr Miller's observation that Surry Hills is not a homogeneous suburb with the area in the immediate vicinity of the subject property (where views over Prince Alfred Park are not available) being in the less favoured portion of Surry Hills. The same can be said of Chippendale; it is also not a homogeneous suburb. I have formed the opinion that the subject property and the Regent Street property are both located in one of the less favoured sections of the respective suburbs.

1. I do not accept the evidence of either valuer on the question of comparison to the subject property. While the properties have different attributes I consider, on balance, that they are relatively comparable.

246 - 248 Cleveland Street Surry Hills

1. This property is located on the very busy intersection of Cleveland and Chalmers Streets being situated on the northeastern corner. It has an area of 276.4 m 2 , is irregularly shaped; described by Mr Foley-Jennings as being " blade shaped " and is similarly zoned to the subject property. However, it has the benefit of a floor space ratio of 3:1 providing a FSA of 829 m 2 . Access to the eastern side of the property is available from Pembroke Street.

1. The property sold in March 2009 for $1,100,000. The valuers agreed that the improvements had little or no value. After allowing $40,000 for demolition costs the sale showed $1,375 per square metre of FSA.

1. I concur with the valuers that this is a significantly inferior property with a tainted history. Due to its location on a noisy intersection, any development would require double glazed windows that would lead to the necessity for air-conditioning, possibly on a 24-hour basis.

1. Mr Foley-Jennings considers that this property can be compared directly or almost directly to the subject property and ultimately concludes that a small upward adjustment of 5.5% from $1,327 per square metre of FSA should be made to arrive at a land value for the subject property of $1400 per m 2 FSA. Mr Hill considers that sale should be analysed on a floor space ratio of 2: 1 and not the allowed 3:1 and on this basis analyses the sale, based on the sale price only, at $1990 per m 2 FSA.

1. There is no doubt that this is a significantly inferior property. In my opinion an upward adjustment of 25%, from my analysed figure of $1,375 per square metre of FSA, is necessary for comparison to the subject property, indicating a land value of $1,719 per m 2 of FSA as at 1 July 2009.

Other vacant residential site sales

1. The sales of 66 - 68 Riley Street and 32 Flinders Street Darlinghurst are both relevant in time but are located in a different socio-economic suburb where higher prices for residential land can be expected. Mr Hill's analysis shows $3247 per m 2 for Riley Street and $2658 per m 2 of FSA as at 1 July 2007. Mr Hill opined that he considered the Flinders Street property directly comparable to the subject property but having regard to location and shape of the land I cannot agree. Mr Hill also considered the sale of 24 - 30 Springfield Avenue, Potts Point but in my opinion this property is not remotely comparable to the subject property.

Other vacant site sales

441 - 449 Elizabeth Street Surry Hills

1. This property is located on the northwestern corner of the intersection of Elizabeth and Devonshire Streets. It is zoned City Edge. The floor space ratio is 3:1 providing, over the site area of 264.3 m 2 , a FSA of 792.9 m 2 .

1. It was sold as vacant land on 14 March 2007 for $2,900,000. Subsequently development approval was obtained for the erection of a three-storey building comprising four shops on the ground floor and twelve commercial office suites on levels one and two. No on-site car parking is provided. The valuers agree that no adjustment for market movement is required to the 1 July 2007 base date. The sale shows $3,657 per m 2 of FSA.

1. Devonshire Street has a strong retail influence. At the time of the view the four shops were busy taking advantage of the significant pedestrian traffic in Devonshire Street. Immediate proximity to Central Station and the pedestrian subway beneath the railway platforms linking this area to Railway Square are particularly important features as well as the concentration of commercial office buildings in the vicinity of the Elizabeth Street intersection.

1. This property cannot be considered as being comparable in any way to the subject property, and has only been included because of its location, the fact that the land was sold vacant and the date of sale.

54 - 58 Foveaux Street Surry Hills

1. This property is located on the northern side of Foveaux Street between Bellevue and in Belmore Streets with a rear alignment to Belmore Lane. It is rectangular in shape with a cross fall to the west, has an area of 370.7 m 2 , is zoned mixed uses with a floor space ratio of 3:1 providing a FSA of 1,112.1 m 2 .

1. The property was sold at auction as vacant land for $1,850,000 on 28 October 2005 indicating $1,663 per m 2 of FSA. Subsequently, development approval was granted for a five-storey retail/commercial office building.

1. I accept Mr Hill's adjustment for change in market value of 9.5% indicating $1,821 per m 2 of floor space area as at 1 July 2007.

1. Mr Hill acknowledges that this property is located in a superior position, is in a different market and the non-residential development to which it was suited and which has occurred prevents any sales analysis comparison with the subject property.

100 - 114 Chalmers Street Surry Hills

1. The sale of this property on 19 January 2009 has been analysed by Mr Hill to show $1,663 per m 2 of FSA.

1. The analysis of this sale must be approached with more than the usual caution as the development approval enables a total upgrade as well as some demolition to an existing building for ultimate use as commercial premises. The key element in the analysis is the depreciation rate applied to the replacement cost new of the existing building, which has a total floor space area of 4,199 m 2 .

1. For the reasons that I rejected the sale of 54 - 58 Foveaux Street, I also discard this sale.

Other improved sales

1. I reject the following sales as comparables for arriving at the land value of the subject property for predominantly residential use.

1. 437/439 Elizabeth Street sold in November 2007 and comprises a very small site area of 94 m 2 and having regard to its superior location cannot be considered comparable to the subject property. Mr Hill's analysis shows a rate of $3,203 per m 2 of FSA as at 1 July 2007.

1. 421 - 423 Elizabeth Street was analysed by both valuers who adopted widely differing views as to the value of the improvements (Mr Foley-Jennings $800,000 and Mr Hill $500,000) with the result that as at 1 July 2007 the respective analysed rates of floor space area were $1,600 and $2,246 per m 2 respectively. This property is in a superior position to the subject property, better suited to commercial development and for that reason I do not consider that it can be properly regarded as a comparable.

1. 467 Elizabeth Street comprises a group of three terrace houses sold in May 2006. It has a land area of 217 m 2 . Once again, widely differing views were expressed as to the value of the improvements; Mr Hill's analysis shows $2,903 per m 2 while Mr Foley-Jennings' analysis shows $1,843 per m 2 of FSA as at 1 July 2006.

Market movement

1. The valuers agree that the land values peaked in 2007. Mr Hill considers that the market declined 10% to July 2008 and then remained static to July 2009. Mr Foley-Jennings considers that land values remained static from July 2007 to July 2008, but then declined 12.8%. I prefer Mr Hill's evidence on this particular point.

Valuation conclusion

1. I have decided that a more reliable assessment of the land value of the subject property can be derived from an adjustment of the sale of 246/248 Cleveland Street indicating a land value of $1,719 per m 2 FSA, rather than a comparison of my analysis of 147 - 149 Regent Street, which shows $1,777 per square metre of FSA.

1. The FSA of this property is 784.74 m 2 . The land values to be applied are $1,719 per square metre of FSA for the base dates of 1 July 2008 and 2009 and $1,910 per square metre of FSA for the base date of 1 July 2007.

1. Land value, 1 July 2007, $1,498,853 rounded to $1,498,900.

1. Land values, 1 July 2008 and 1 July 2009, each $1,348,968 rounded to $1,349,000.

529 - 531 Elizabeth Street

1. As already noted, the valuers, in the joint report, agreed that the highest and best use of this property was, " As a retail/commercial development with basement car parking having regard to the existing approved commercial use on the subject land as at the relevant base dates ." In their joint report, they acknowledged that the current planning controls would limit FSA to 582.4 square metres, being approximately 25% of the FSA of the existing improvements.

1. During evidence, Mr Foley-Jennings recanted from that position referring to his " Hypothetical Feasibility Valuation Study " as at 1 July 2007, showing on one assumption that the development in accordance with the existing improvements was not viable (indicating a negative land value) and on another resulting in a land value of only $500,000.

1. Mr Hill did not provide a feasibility study to support his contention as to the highest and best use of the land and appeared to place great weight on the fact that the existing improvements were in place. However, he acknowledged that where an existing development would not be permitted under the general law prevailing at the relevant base, s 6A(2) does not require that the land must be valued on that assumption; the key words in ss 2 (a) being " the land may be used, or may continue to be used ".

1. Miss Carpenter submitted that the use of a feasibility study to determine land value should only be undertaken in the absence of comparable sales and referred to the judgment of Pain J in Trust Company Ltd ATF Opera House Car Park Infrastructure Trust No 1 v Valuer General (No3) [2011] NSWLEC 85 at [42] to support her view. The important difference is that Mr Foley-Jennings did not use his feasibility study to determine land value, but only to demonstrate that development of the property for commercial purposes in accordance with the existing use was not viable.

1. There has been for many years commercial office development in the vicinity of Central Railway Station. On the eastern side of the Station this development has been concentrated in Elizabeth Street extending south from Albion Street to Devonshire Street, in Devonshire Street itself, in Chalmers Street extending south from Devonshire Street, where it is interspersed with residential developments overlooking Prince Alfred Park, and in Foveaux Street. Mr Foley-Jennings' feasibility study confirmed an opinion which I formed on the view that at each of the base dates the highest and best use of this property was not for commercial office space, but for a mixed use development with predominantly residential accommodation in accordance with the current development controls, namely, a floor space ratio of 2:1 and a maximum height limit of 15 m. The existing improvements on the land are an example of economic obsolescence; in other words, improvements that may have been economically viable at the time they were constructed, but would not be replicated at any of the base dates, due to external influences reducing the demand for commercial office space in the immediate vicinity of the subject property.

1. Accordingly, I conclude that this property should be valued under s 6A(1) of the Act. The values that I have applied to the adjacent property are equally applicable to this property, namely, $1,910 per m 2 of FSA as at 1 July 2007 and $1719 per m 2 of FSA as at the two subsequent base dates, subject to an allowance to reflect the adverse effect of the setback from the original Elizabeth Street frontage and the value of the land improvements.

1. During the hearing, the parties agreed that access to any new development on this land across land in the ownership of the Council of the City of Sydney would be available without cost or penalty.

1. However, the fact that such new development would be set back from the original street frontage, thus limiting advertising potential to any ground floor retail tenant and street exposure to the new building (which would have a tendency to reduce its appeal). In addition, some landscaping works, at the landowner's expense, on the Council owned land would need to be undertaken requiring negotiations with the Council.

1. Mr Hill made no adjustment. Mr Foley-Jennings considered that a deduction of 1.85% of land value would be appropriate, but I consider that a deduction of 2.5% is more appropriate having regard to the sum which this percentage generates.

Valuation conclusion

1. The FSA of this property is 582.4 m 2 .

1. As at 1 July 2007 the land value is $1,112,384 less 2.5% becomes $1,084,574 plus the agreed value of the land improvements, $58,240. The resultant figure of $1,142,814 is rounded to $1,142,800.

1. As at 1 July 2008 and 2009 the land value, had each date, is $1,001,146 less 2.5% becomes $976,117 plus the agreed value of land improvements, $69,160. The resultant figure of $1,045,277 is rounded to $1,045,300.

Orders

1. The orders of the Court are as follows:

(1)   The appeals are allowed.

(2)   523 - 527 Elizabeth Street Surry Hills. The land value under s 6A (1) of the Act is determined at $1,498,900 at the base date of 1 July 2007, $1,349,000 at each of the base dates of 1 July 2008 and 1 July 2009.

(3)   529 - 531 Elizabeth Street Surry Hills. The land value under s 6 A (1) of the Act is determined at $1,142,800 at the base date of 1 July 2007, and $1,045,300 at each of the base dates of 1 July 2008 and 1 July 2009.

(4)   The respondent is to amend the Register of Land Values to reflect the land values determined.

E Craig Miller

Acting Commissioner of the Court

Decision last updated: 09 March 2012