RICS are currently undertaking a review of The capital and rental valuation of public houses, bars, restaurants and nightclubs in England and Wales, 1st edition. Red Book Global Standards, including VPGA 4 Valuation of individual trade-related properties, remain the overarching professional standards. These incorporate International Valuation Standards (IVS).
Though much of the detail in this section remains relevant, it should be read in the context of the ongoing review, with valuers and other stakeholders reminded to familiarise themselves with current relevant statute and market practice. Valuers should only undertake professional work in respect of this sector where they have the relevant experience and competence. For more information on the pending review of public house valuation guidance, please contact firstname.lastname@example.org.
The public houses section covers the capital and rental valuation of public houses. The primary RICS guidance on this subject is VPGA 4 Valuation of individual trade related properties, and the more specific The capital and rental valuation of public houses, bars, restaurants and nightclubs in England and Wales. The object of the latter is to provide practical assistance to valuers dealing with public houses.
The underlying reason for the valuation of a public house will influence the type of research the valuer should undertake, and the type of calculation needed to formulate the valuation. Public houses in the main are acquired and run for profit, and so are valued by the profits method of valuation. RICS guidance emphasises that it is important that the valuer is regularly involved in the relevant market as practical knowledge of the factors affecting the market is essential to analysis of comparable transactions.
Related RICS standards and guidance: RICS Valuation – Global Standards
Related template: Public houses valuation checklist