Andrew Ricketts (Valuation Officer) v Cyxtera Technology UK Limited

For rating purposes, whether a building is ready for beneficial occupation depends on its intended purpose. A data hall designed to be actively managed, controlled and adapted by its operator may be beneficially occupied even though areas remain uncustomised for particular customers.

The distinction is between unfinished features of the building and equipment or adaptable fittings introduced for immediate use. Customer-specific cabling, racks and cold-aisle arrangements did not prevent the operator’s occupation of fully serviced white space as a data centre.

A tribunal may decline to entertain a late, substantial change of case, particularly where no valuation evidence supports the proposed new effective date.

The Valuation Officer appealed decisions of the Valuation Tribunal for England concerning alterations to the 2010 Rating List for Cyxtera’s Slough data centre.

The Tribunal below had excluded uncustomised white space in data halls from the hereditament, on the basis that it was not capable of beneficial occupation. It had also excluded a linked building, 631 Ajax Avenue, on 13 March 2013 because it remained in contractors’ hands.

The principal issue was whether white space, already equipped with power, cooling, lighting, security and fire protection but awaiting customer-specific adaptation, formed part of the hereditament. A further issue was whether the Upper Tribunal could alter the list from a later 2013 date under regulation 38(7) of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009.

1. Appeal allowed in part. White space formed part of the hereditament on the first three material dates. The appeal failed in relation to 13 March 2013.

2. Readiness for beneficial occupation must be assessed by reference to the building’s intended purpose. The relevant purpose was not merely occupation by customers and their IT equipment. The data centre was intended also for Cyxtera’s active occupation, management, control and continuous adaptation of the space.

3. White space had been handed from the construction team to the operational team with power, cooling, lighting, security and fire protection operating. It was therefore capable of, and in fact subject to, Cyxtera’s beneficial occupation as a data centre. Its lack of customer-specific cabling, racks, cages and cold-aisle containment did not alter that conclusion.

4. Consistently with Post Office v Nottingham City Council [1976] 1 WLR 624, the inquiry distinguishes incomplete building works from equipment and fittings needed for immediate use. Moving floor and ceiling tiles and attaching customer-specific cabling or cages did not structurally alter the building. In any event, those works were unnecessary to Cyxtera’s beneficial occupation.

5. The Tribunal accepted that 631 did not form part of the hereditament on 13 March 2013. Assuming that regulation 38(7) could permit a later alteration, it declined to exercise any such discretion. The Valuation Officer had advanced the proposed later date only shortly before and at the hearing, without amending the statement of case, and produced no valuation evidence for it.

6. The rating list was to show rateable values of £685,000 from 1 April 2010, £685,000 from 22 July 2010, £1,220,000 from 30 September 2010, and £1,220,000 from 13 March 2013.

• Upper Tribunal (Lands Chamber): allowed the Valuation Officer’s appeal on the extent of the hereditament for the first three material dates, but refused the proposed later alteration relating to 631 Ajax Avenue.
• Valuation Tribunal for England: in decisions dated 25 and 27 November 2019, reduced the assessments after excluding white space and, at the fourth date, 631 Ajax Avenue.