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    RICS members and external stakeholders such as industry bodies, government, pub tenants and owners, have requested an update of the 2010 RICS guidance Capital and Rental Valuation of Public Houses, Bars, Restaurants and Nightclubs in England and Wales. We are proposing an updated standard under the new title Valuation of licensed leisure property including public houses, bars, nightclubs and restaurants. We ran a consultation on the updated standard that closed in July 2024. We are currently considering the responses to develop the final version. This is subject to RICS governance procedures.

    In a specialist market such as licensed leisure, the provision and consideration of professional advice can be complex. Parts of the licensed leisure market are highly regulated, and we want the views of market stakeholders on how the valuation process interacts with this, to make sure our coverage of the valuation process is clear, concise and balanced.

    FAQs

    No. The standard is limited in scope to public houses, nightclubs and licensed restaurants. There is limited coverage of digital offerings within the appendices but only in relation to licensed premises.

    The final standard will include good practice recommendations and reference mandatory requirements for RICS members and regulated firms.

    The initial development process was undertaken through a series of forums involving tenants, operators, valuers, trade bodies and other stakeholders. Following this, a working group of expert valuers developed the consultation draft. The expert working group does not include employees of pub companies or people operating licensed leisure businesses. Working group members act for landlords and tenants and come from a range of valuation firm sizes.

    The standard is mainly for RICS professionals and firms. It does include a section for non-valuation professionals, seeking to address some of the points raised in the initial forums, for example, the role of the valuer and why valuations undertaken for different reasons may give different results.

    The standard relates to the professional activities of valuers and is limited in scope to issues of valuation. Valuations of licensed leisure assets are undertaken for a range of purposes and the standard seeks to be balanced and proportionate in its coverage. The standard covers the whole of the UK and all licensed leisure assets – for which there may be differing codes and regulation.

    The standard is designed to provide guidance and some recommendations for the valuation of licensed leisure real estate assets for all purposes. Its scope does not run beyond this. The draft standard references the RICS Rules of Conduct and our Global Red Book valuation standards, which include mandatory requirements for the way RICS members and regulated firms operate.

    The role of valuation is typically to provide observations about the value of an asset. We recognise that RICS members also play an active role in lease advice, rental negotiations and asset management for tenants and landlords. The subject standard does not cover these areas except where they relate to valuation. However, the requirement for RICS members and regulated firms undertaking this work to follow our Rules of Conduct remains.

    Each of those terms is used in the draft standard. Valuation is ultimately a matter of opinion - grounded in evidence and expertise. The so called ‘profits’ method of valuation takes a set of hypothetical circumstances, which is useful to determine the market value of the asset - as opposed to the value to a particular operator. The method is recognised internationally and embodied in the RICS Global Red Book – valuation standards (at VPGA 4).

    You can comment on the terminology and coverage of methods as part of the consultation.

    Matters relevant to the subject valuation standard can be included in consultation responses. If they relate to an external regulatory matter (non-RICS), then please raise them with the relevant regulatory authority.

    We recognise that in some circumstances you may wish to raise concerns about RICS members or regulated firms. Please use this link: Report concerns about a RICS Member or RICS-Regulated Firm. This will need to relate to a specific member or firm and not be a general query. RICS has regulatory authority over its members and regulated firms only.

    Valuation is a matter of opinion, and it is not unusual for opposing parties in a negotiation related to valuation to hold different opinions.

    A revised standard reflecting a contemporary licensed leisure market is hoped to help support the sector. Its aim is to support our members with the provision of relevant advice to stakeholders so they can make informed decisions. The standard is not a policy document; information about the sustainability of the built environment can be found in the RICS manifesto.