Valuation of licensed leisure property 2nd edition

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

The standard includes best practice recommendations and mandatory requirements for RICS members and RICS-regulated firms.

The initial development process was undertaken through a series of forums involving tenants, operators, valuers, trade bodies and other stakeholders. Following this, an expert group of valuers was formed to develop the standard. The expert group did not include employees of pub companies or people operating licensed leisure businesses. The expert group members acted for landlords and tenants and came from a range of valuation firm sizes.  

The standard is mainly for RICS members and RICS-regulated firms, however, it also includes a section for non-valuation professionals, which seeks 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.

There are a range of matters relating to the operation, occupation, ownership and management of pubs covered by the Pubs Code, PCA and wider regulations and guidance, but this professional standard is exclusively focused on valuation s. 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, regulations and considerations. 

The standard provides guidance and some recommendations for the valuation of licensed leisure real estate assets for all purposes. Its scope does not run beyond this. The standard references the RICS Rules of Conduct and the RICS Valuation – Global Standards, which include mandatory requirements for the way RICS members and RICS-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 RICS-regulated firms undertaking this work to follow the Rules of Conduct remains.  

Each of those terms is used in the 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 Valuation – Global Standards (VPGA 4).

If your concerns 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 RICS-regulated firms. For detailed information on how to raise a concern, please see the RICS website. Concerns will need to relate to a specific RICS member or RICS-regulated firm and not be a general query. RICS only has regulatory authority over its members and regulated firms.

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

The standard reflects a contemporary licensed leisure market and it is hoped it will help support the sector. The aim of the standard is to support RICS 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.