Tenstat Pty Limited (ATF Tenstat Yennora Trust) v Valuer-General
[2004] NSWLEC 230
•04/07/2004
Land and Environment Court
of New South Wales
CITATION: Tenstat Pty Limited (ATF Tenstat Yennora Trust) v Valuer-General & Anor [2004] NSWLEC 230 PARTIES: APPLICANT:
Tenstat Pty Limited (ATF Tenstat Yennora Trust)FIRST RESPONDENT:
SECOND RESPONDENT:
Valuer-General
Woolworths Limited
ABN 88 000 014 675FILE NUMBER(S): 31470 of 2003 CORAM: Lloyd J KEY ISSUES: Valuation of Land :- comparison of sales LEGISLATION CITED: Valuation of Land Act 1916 s 6A(1), s 38(1) and s 40(2) CASES CITED: DATES OF HEARING: 05/04/2004; 06/04/2004 and 07/04/2004 EX TEMPORE
JUDGMENT DATE :04/07/2004 LEGAL REPRESENTATIVES:
APPLICANT:
Mr M D Young (barrister)
SOLICITORS:
Phillips FoxFIRST RESPONDENT:
SECOND RESPONDENT:
Mr J B Maston (barrister)
SOLICITORS:
I V Knight
Crown Solicitor
Ms J M Jagot (barrister)
SOLICITORS:
Corrs Chambers Westgarth
JUDGMENT:
IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES
31470 of 2003
7 April 2004Lloyd J
TENSTAT PTY LIMITED (ATF TENSTAT YENNORA TRUST)
ACN 003 091 370
- Applicant
- Respondent
HIS HONOUR:
1 The applicant, Tenstat Pty Limited, is the owner of a large parcel of land known as Nos. 2-30 Dursley Road, Yagoona and also known as lots 3 and 4 in deposited plan 791494 (“the land”). This is an appeal by the applicant pursuant to s 38(1) of the Valuation of Land Act 1916 against the Valuer-General’s determination of an objection to a valuation of the land, on the ground that the value assigned is too low. The applicant contends that the value of the land is $25,400,000.
2 Woolworths Limited (“Woolworth”) is a tenant of the property under a long-term ground lease, expiring on 29 January 2023 but with an option for renewal for a further 12 years. Woolworths was, by consent, added as a party and contends that the value assigned by the Valuer-General is too high. It contends that the value of the land is $16,970,000.
3 The Valuer-General, of course, contends that the value assigned is just right, namely, $20,000,000.
4 The subject land has an area of 13.76 hectares with street frontages on three sides, namely, Dursley Road, Fairfield Road and Dennistoun Avenue. The land is within zone No. 4(a) General Industrial under the relevant local environmental plan, although there is residential development on the opposite side of Dennistoun Avenue. The land is generally rectangular in shape, but there is an L-shaped extension along Dursley Road beyond the main rectangular part of the land for a distance of about 176.6 metres and having a depth of about 45 metres.
5 A 15-metre building line setback applies to the Dursley Road frontage and a 30.48-metre building line setback applies to the Fairfield Road and Dennistoun Avenue frontages. Parking is permitted subject to six metres setback from the street frontages. The land has direct access to a railway siding. Although Woolworths does not make use of this siding, it may be seen as an attraction for a hypothetical purchaser.
6 The land is developed by way of a large warehouse building, a separate four-storey office building, car parking, fencing and associated landscaping. A concrete-lined stormwater channel dissects the south-eastern corner of the site near the L-shape extension along Dursley Road. The stormwater channel is formed with concrete bed and banks. A concrete bridge straddles the channel and it provides access to a car parking area within the land on the other side of the channel.
7 The site has been subjected to cut and fill to create the level area upon which the warehouse building stands. The improvements, other than land improvements such as the cut and fill, must of course be ignored for the purpose of valuing the land: s 6A(1) of the Valuation Act. The relative narrowness of the L-shaped extension along Dursley Road and the presence of the stormwater channel across the south-eastern corner of the land, may tend to limit the uses to which those areas may be put. Mr D F Bowen, the applicant’s valuer, states that the area from the drain up to and including the L-shaped strip may be used for parking as part of it used at present.
8 It is self evident that this L-shaped area may not be as valuable as an independent building site. The area to the south-east of the stormwater channel, including the L-shaped extension, comprises a discrete part of the land with arguably less development potential than the balance of the land. However, because this section of the land can be used for parking, it may not be of such a different nature that it attracts a different value from the balance of the land. The Court notes that the car parking area across the stormwater channel in the south-eastern part of the site is at present the subject of a limited consent for a period of two years from 18 August 2003. Woolworths had applied for a temporary car park there whilst alternative office accommodation is constructed at Norwest Business Park, which I understand is in another part of the metropolitan area. At the completion of the two-year period of the consent, this area is to be rehabilitated and landscaped at its pre-existing levels. Of course, the Court is required to disregard this improvement.
9 The parties have each relied upon the evidence of a valuer: Mr D F Bowen for the applicant, Mr M O’Leary for the Valuer-General and Mr G Jackson for Woolworths. Each valuer agrees that the highest and best use of the subject land is for industrial development of which the present use is but one example. At the base date of valuation, namely 1 July 2002, the subject land was, as I have noted, zoned General Industrial 4(a) under the relevant local environmental plan. The land is also subject to the council’s Development Control Plan No. 3 Industrial Code and the council’s Car Parking Code No.1.
10 The substantial differences between the valuers are in the application of several so called comparable sales to the subject land. The Court has had the benefit of the evidence of the valuers and has had the further benefit of a view with representatives of the parties of the various sales relied upon.
11 It is clear, particularly as a consequence of the view, that for a variety of reasons none of the sales relied upon is of properties that are truly comparable to the subject land. As a consequence, all the sales have had to be adjusted to take account of such things as the various sales dates, deductions for improvements, size, location, the nature of the particular site and the like, when comparing those sales with the subject land.
12 The greatest assistance is to be derived from the sales of land of reasonably similar size to the subject land, and since the land is to be valued in its unimproved state, more assistance is to be obtained from sales of vacant land, intended for industrial use, than sales of land with improvements.
13 The Court is thus disinclined to have much regard to the sales of improved land such as, for example, the sale in Percival Road, Smithfield, amongst others, where in that particular case the existing industrial buildings occupied only about 20 per cent of the site, and the sale involved a lease-back to the vendor. This is not to say that sales of improved properties are always irrelevant – it is just that greater reliance can be placed on the sales of unimproved properties if such sales are available. Even in the case of sales of unimproved land, the Court is not prepared to have much regard to the sales of smaller parcels or of those which present particular difficulties, such as the land opposite the subject land in Fairfield Road, Yennora, which required and still apparently requires extensive site remediation works due to its contamination and on which any building requires piling for its foundations.
14 There is also a difficulty with two sales in Seven Hills. Apart from being smaller parcels than the subject land, those sales are in a different type of industrial area, far from the subject land, and thus upon which not a great deal of reliance can be placed.
15 The Court is driven to the conclusion that the sales of vacant industrial land in the Greystanes Estate are perhaps the more reliable, although even those sales will have to be subjected to some adjustment. Apart from being sales of completely vacant land, the Court notes that they appear to be in a significantly superior location to the subject land with superior access and subject to a more flexible planning regime under State Environmental Planning Policy No. 5.
16 The Greystanes Estate land is also superior to the subject land in that it does not have any residential interface. The nearest residential development is completely out of sight, on the other side of a hill. It is also a modern, purpose built, large-lot industrial estate. Having regard to the fact that the Greystanes Estate is in a clearly superior location, some discount must be made to those sales to account for that. Mr O’Leary discounts those sales by ten per cent for location alone. Mr Bowen on the other hand, discounts them by five per cent for location alone.
17 Having regard, however, to the fact that not only is the Greystanes Estate is a modern, purpose built industrial estate, and the fact that it does not suffer from the disadvantage of having any residential interface, the Court is of the view that Mr O’Leary’s overall approach is to be preferred and the various adjustments he has made in comparing them to the subject land are also to be preferred. In short, the Court prefers the overall approach of Mt O’Leary to the analysis of the sales of vacant industrial land in the Greystanes Estate and their application to the subject land. Having viewed the Greystanes Estate (as well as the subject land) there is, however, one particular sale in the Greystanes Estate which the Court is not prepared to have much regard to, being one lot which is severely affected by an electricity easement.
18 It is to be remembered that s 40(2) of the Valuation of Land Act puts upon the appellant the onus of proving its case. The Court is not persuaded that either the applicant in the present case, or Woolworths, has discharged the onus of proving that the Valuer-General’s valuation should be disturbed. The valuation of the Valuer-General is confirmed and the appeal is dismissed.
- [COUNSEL MADE SUBMISSIONS ON COSTS]
19 HIS HONOUR: The will be no order as to costs.
I hereby certify that the preceding 19 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd.
Associate
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