The cadastral value of Castorama's hypermarket was successfully disputed

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18 January 2017

The project on assessment appeal of Castorama’s hypermarket was successfully completed. The hypermarket’s location is Ekaterinburg, Shefskaya str., 107, with total area of 11 087, sq.m. and cadastral number 66:41:0110014:156. The cadastral value of the property was set at 773 312 575, 66 (69 748,23 rub. sq.m.). The preliminary analysis conducted by the experts of VALRUS indicated that the cadastral value was higher than the market one. Based on the results of full valuation, the market value of the property was determined as 445 100 000 (four hundred forty five million one hundred thousand) rubles (40 145.39 rubles / sq m).

The report was submitted to the Commission under the Rosreestr of Sverdlovsk region.The requirements of the Commission of Yekaterinburg for the quality of the reports are very high, one of the highest in Russia. For instance, during appraisal work it is a must to prepare a detailed review of the market with the references to sources not only of general and analytic information, but of all price information used in the review. Analogues used in calculations should be identified with an accuracy of the cadastral number of each object, all price forming characteristics are to be adjusted and confirmed. It should be pointed out that at the time of the submission in 2016 there was a precious little amount of large successfully contested properties in Yekaterinburg.

After receiving a few formal comments on the report we convinced our client not to handle the case to a court, but to contest a property value in the Commission once more. To defend the report Mr. Pavel Kartsev personally attended the Commission’s meeting. The Commission asked a lot of questions on appraisal methodology, determination of rent payments, and the possibility of comparability of rent payment with that in the million cities, procedure of its payments depending on turnover of the trading company.

Reduction of cadastral value was -42,4% (328,2 mln.rub). Castorama saved 4.9 mln.rub. on property tax payments per calculation on one tax period (1 year).

Commission's decision

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Castorama is part of British Kingfisher company. Kingfisher group – is more than 900 shops in Europe and Asian markets, it takes a leading position on the market for home of household goods and repair in Europe, the third-largest DIY chain in the world. 'Kingfisher' Group is an international business. More than 50% of sales and the Company's profit are made by the countries outside the UK. The International activity of “Kingfisher” is implemented in China, Poland, Italy, Spain, Greece and others. In Russia the activity is carried out by "Castorama Rus". The company puts great stress on the chain development in the regions.The first store was opened in 2006 in Samara. The format of stores- hypermarkets with area of 10 000 sq.m. with assortment over 35 thousand items.Today the chain in Russia consists of 19 stores which are located in Moscow and Moscow region, St. Petersburg, Perm, Samara, Tolyatti, Rostov-on-Don, Omsk, Krasnodar, Voronezh, Nizhny Novgorod, Saratov, Yekaterinburg, Chelyabinsk and Ufa.