If you're a business owner or investor, understanding business property valuation is crucial. Whether you're planning to buy, sell, lease or invest, having clarity on how commercial properties are valued can save you money and help you make informed decisions. From rateable values to market-based appraisals, this guide breaks it all down for you.
Business property valuation refers to the process of estimating the worth of a commercial property. This value plays a vital role in decisions related to taxation, investment, insurance, and sales. Whether you're dealing with an office space, retail unit or warehouse, valuations help establish the true financial picture of your asset.
There are several recognised methods to calculate a commercial property's value:
This approach compares similar properties recently sold in the same location. It's commonly used for retail units and offices.
Suitable for rental properties, this method values based on expected income, adjusting for occupancy rates and market rent.
This estimates the cost of rebuilding the property, subtracting depreciation. Often used for specialised buildings with few comparables.
Commercial property rate valuation is primarily used by local authorities to calculate the business rates you owe. It is based on the property's rateable value, which reflects the open market rental value as assessed by the Valuation Office Agency (VOA).
You can find and check your business rates via the GOV.UK portal. You'll need your postcode or address.
The formula is generally:
Rateable Value x Multiplier = Business Rates Payable
The multiplier is set annually by the government and may vary based on location or relief schemes.
It's wise to get your commercial property valued:
Typically, RICS-certified surveyors or registered valuers conduct valuations. They follow professional standards and ethical codes to ensure transparency and accuracy.
Rateable value is the estimated annual rental value of a property on the open market at a set valuation date. It is used to calculate small business rates.
The Valuation Office Agency usually updates rateable values every five years, though it may vary depending on government changes.
Yes, you can challenge your property's rateable value through the Check, Challenge, Appeal process.
Understanding business property valuation is essential for planning, compliance, and making smart financial decisions. Whether you're calculating your commercial property rate valuation for tax, investment or insurance purposes, having the right information—and experts to guide you—makes all the difference.
Need help with your valuation? Reach out to a certified commercial property valuer today and ensure you’re making informed, profitable decisions.
