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Oscar 2009 - service charge analysis for Retail Parks produced by Jones Lang LaSalle
Citation preview
Foreword Contents
Foreword 2
Introduction 4
ExecutiveSummary 5
Thedatabase 6
Averageservicecharge 8
Locationandsize 15
Lookingtothefuture 21
Definition of terms 22
Geographicalareas 24
Contacts 25
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
2 �
Data ContributorsIamparticularlypleasedtohavebeeninvitedtoprovidetheforewordtothissixtheditionoftheJonesLangLaSalleRetailParkOSCARintheseverychallengingtimesforbothLandlordsandTenants.TherehasrightlybeenagreatdealoffocusonServiceChargesasbothRetailersandLandlordsconcentrateontightcostcontrol.Greatertransparency,dialogueandsharingofbestpracticearecriticaltocostcontrolandqualitybenchmarkinginformationisanessentialfactorinthisprocess.TheJonesLangLaSalleOSCARresearchprovidesthisqualitybenchmarkinginformationandtheRetailParkOSCARconcentratingontheOutofTownretailsectorgivesthatspecialistedgethatisrequired.
Inotethatthesizeofthedatabasehasbeenenhancedthisyearmaintainingthecredibilityoftheconclusionsdrawnfromtheresearch.Itnowcoversaround one fifth of all multi let retail parks in the UK. The spread of parks includedandtheirmanagementthroughmanyseparateorganisationsensuresthatdistortionsfromanyparticulargroupwillbeminimised.
Itisgoodtoseethattheanalysisonbudgetshasbeenincludedagainthisyearasthisaddstothetotheoverallpictureandhelpstomaketheresearchmorecurrentandusable.Itmustbeanaimforthisaspecttobebroughtfullyuptodatesoitcanbeusedtoinformbudgetpreparationsinthenearfuture.FinallyIwouldliketothankJonesLangLaSalleforcollatingthedatainthereportandforpresentingtheanalysisinsuchaclearandconcisemanner.
Francis Wright Director - Property Management – Retail PRUPIM
The accurate measurement and monitoring of costs set out in the OSCAR report is an essential tool for the Chartered Surveyor in developing effective property management strategies and measuring management performance.
The Royal Institution of Chartered Surveyors (RICS) has worked closely with Jones Lang LaSalle to ensure that the industry Service Charge Cost Categories are compatible with those used in OSCAR. The highly respected OSCAR work is a considerable contribution towards our objective of more consistency and transparency within the property management sector.
Christopher Edwards
Chair,RICSServiceChargeGroup
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
4 5
JonesLangLaSalle’sRetailParkOSCARisnowinits6thyearofpublicationandrepresentsthemostextensivesurveyofservicechargesformulti-letretailparks in the UK.
RetailParkOSCAR2009providesresearchon2008reconciledservicechargecostsand2009servicechargebudgets.
InRetailParkOSCARwehavecategorisedallparksbasedonthetenantuserforeachunittoestablish�groupsbasedontheirkeycharacteristics.Thishasprovedareliablemeasureoverthelast4yearsandwehaveretainedthistoensurecontinuity.
The guide “benchmarks” on Parks with varying classifications, sizes and locationsforbothreconciledservicechargesandbudgets.
Ourthanksyetagaingotoourcontributorsandtheirmanagingagentsfortheirveryconsiderablehelpinprovidingthedata.
AnalysisonservicecostsandbenchmarkingforindividualRetailParkscanbeprovidedbytheJonesLangLaSalleRetailParkOSCARTeamifrequired.
Introduction
• Thedatabasecoversjustunderone fifth of multi-let retail parks(asidentified by Trevor Woods Associates) in the UKandincludes76 bulky goods parks, 102 retail parks and 60 shopping parks
• Clear evidence of the effects of the economic environment on decisions of Landlords and their agents is identified in both 2008 service charges and 2009 service charge budgetswithpressurestominimiseanycostincreases
• The inclusion of income in services charges and service charge budgets has been seen to be increasing in this research as noted below
• 2008 reconciled Service Charges
• Are 7.2% below 2008 service charge Budgetsandintheretailparkclassthisdecreaseisover14%
• across the database are £1.07 per sq ft (£11.52 psm) rising 11.5% from £0.96 per sq ft (£10.33 psm) in 2007 well ahead of inflation
• on a “like for like” database (using the same properties for 2008 and 2007) the annual increase is 5.2%
• TheaverageonBulky Goods Parks is £0.88persqft(£0.74psf2007), on Retail Parks is £0.99 per sq ft (£0.99 per sq ft 2007) and onShopping Parks is £1.46 per sq ft (£1.25 psf 2007).
• Key Trends - 2008 reconciled Service Charges(against2007reconciled Service Charges)
• Whilst costs under the heading of Managementhaveincreasedby 16.4%intotal,withinthatManagement feeshavereducedwhileAdministrationcoveringsitecosts,auditsandHealth&Safetyhas increased by 39.2%.
• Utilities roseby 2.3%
• Soft Servicesremainsthe largest element but reduced to 56.6%ofcostsandunderthatheadingPromotionshaveincreased by 70%butoffasmallbase.
• Hard Servicesremainsavariablecomponentrepresentingjustover 18% of expenditure.
• Incomealthoughsmallshowsa562.5% increasethisyear.
• 2009 Service Charge Budgets
• Areonaverage£1.07 per sq ft (£11.52 psm) down by 5.3% from £1.1�persqft (£12.16 psm) budgeted in 2008.
• have reducedon2008 Budgets for the first timesincethestartofthe research and this is reflected in all classes of park.
• onBulky Goods Parks are £0.83 per sq foot (£0.87 psf 2008), on Retail Parks is £1.04 per sq foot (£1.13 psf 2008) and on Shopping Parks is £1.38 per sq foot (£1.44 psf 2008).
• are 4.6% higher than reconciled service charges 2008forthesameparks.Itislikelythat2009budgetswereagreedbeforethefullextentofthesavingsversus2008budgetswereknown.
• Key Trends - 2009 Service Charges Budgets (against 2008 Budgets)
• Managementfeeshaveincreased by 3.7%andAdministrationcoveringsitecosts,auditsandHealth&Safetyhas increased by 20.3%.
• Utilities riseby9%
• Soft Services reduced by 3.7%,butunderthatheadingPromotionshaveincreased by 5.6%butoffasmallbase.
• Hard Servicesremainsconstantrepresentingjustover 18% of expenditure,
• Incomealthoughsmallshowsa96.4% increasethisyear
Executive Summary
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
6 7
The database
TheoverallnumberofParksinthecombineddatabaseisverysimilartoRetailParkOSCAR2008.The2008reconciledservicechargesdatabasehasincreasedby10%althoughthe2009servicechargebudgetdatabasehasmarginallydecreased.
Thetotalof2�9Parksoverallrepresentsinexcessof19%ofallmulti-letRetail Parks (Trevor Woods Associates) in the UK and is a significant body ofdatatodrawsoundconclusionsaboutservicecharges.
Thisyearsome�0parkshaveleftthedatabaseand19parksbeenincluded for the first time. This level of variation can result in some of the headlinecomparisonsbetweenyearsproducinginconsistentresults.Toallowforthisanadditionalcomparisonhasbeenmadeusingthesameparksyearonyearandthisispresentedasamorereliableyardstickwhereappropriate.
Dataispresentedmainlyinimperialunitswithconversionstometricwhereappropriateandthisyear’sanalysisisbasedon:• Overall • a total floor area of 29.4 million sq ft (2.7 million sq m) • 2,229units • Datafromthe10leadingretailparkowners• Reconciled Service Charges 2008 • 216RetailParks • Atotalspendof£�0millionin2008• Service Charge Budgets 2009 • 221RetailParks • Atotalbudgetedspendofover£�0.�millionin2009
• Approximately85%oftheParksincludedwithinthedatabasearemanagedbyourcontributorsandtheirmanagingagents
• Tenant user information for each Unit has been analysed for all Parks to provide a classification for each Park.
The classification of the parks included in the research is:
Reconciled Service Charges 2008Classification Total Spend Number Number Area
of Parks of Units (Sq Ft)
Bulky Goods £4,952,�46 67 �92 5,9�7,494
Retail £11,478,071 97 890 12,4�6,696
Shopping £1�,61�,866 52 755 8,629,172
Budgeted Service Charges 2009Classification Total Budget Number Number Area
of Parks of Units (Sq Ft)
Bulky Goods £4,881,609 68 400 5,984,056
Retail £11,7�8,21� 95 878 12,�27,211
Shopping £1�,659,056 58 829 9,478,205
ShoppingParksatthe“topend”sharemanyofthecharacteristicsofshoppingcentresalthougharerecognisablydifferentinlocationandlayout.Acomparativestudyonthisaspectremainsanareaforresearchinfutureyears.
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
8 9
Theoverallaveragereconciled service charge ratecalculatedfromthetotaldatabasewas£1.07 per sq ft (£11.52 per sq metre)whichrepresentsan11.5% uplift on last year (Retail Park OSCAR 2008). This increase is in part a reflection of the changes to the database this year and when the same Parks ineachyeararecomparedona“likeforlike”basistheupliftis5.2%.
Thelowestratewas£0.1�persqft,thehighest£5.�1persqftandthemidrangefrom£0.6�to£1.25persqft.
Average service charge rates by Park ClassificationClass AverageService MainRange
ChargeRate Mid50%
Bulky Goods Parks £0.88persqft £0.54to£0.84persqft
Retail Parks £0.99persqft £0.6�to£1.17persqft
Shopping Parks £1.46persqft £0.87to£1.79persqft
The classifications continue to retain clear differences in terms of running costs,althoughoverlapdoesoccuratthemargins.
RECONCILED SERVICE CHARGES BY COMPONENT PERCENTAGES
TheanalysisonindividualservicelinesatParksistabledbelowusingtheheadingsrecommendedintheRICSCodeofPractice.
Average service charge components by percentage across all Parks 2008 2009 Dif
Management 17.5% 20.4% 16.4%
ManagementFee 8.8% 8.�% -6.1%
Administration 8.7% 12.1% �9.2%
Utilities 6.2% 6.�% 2.�%
Soft Services 57.6% 56.6% -1.6%
Landscape/Cleaning 28.4% 26.2% -7.8%
Security 28.2% 28.8% 2.4%
Promotions 1.0% 1.7% 69.4%
Hard Services 19.0% 18.�% -�.8%
Income -0.2% -1.6% 562.5%
Comment
ManagementManagement FeesasapercentagehavedecreasedinRetailParkOSCAR2009 and now on average are 8.3% (8.8% in Retail Park OSCAR 2008)
AdministrationcostsasapercentageofexpenditurehaveincreasedmarkedlyinRetailParkOSCAR2009to12.1%(8.7%inRetailParkOSCAR2008). This heading includes site management costs covering rates, insuranceandsitemanagers’costs,auditfeesandHealth&Safety.
Site Management Costs are the most significant element of the Administration.Datahasbeenprovidedseparatelyfor149parksandthetotalsrunfrom£85to£281,5�0.ThisrangerepresentsthedifferentlevelsofsiteservicesprovidedacrosstherangeofParksfrombulkygoodsparkstofullymanagedshoppingparksthathavemanyoftheservicesofshoppingcentres.Theaveragerateis£0.1�persqftandthemidrangeis£0.02to£0.14.Lookingatthedifferentclassesofparkstheratesareasfollows:
Class Numbers of Parks Average Rate
BulkyGoodsParks 4� £0.10persqft
RetailParks 67 £0.12persqft
ShoppingParks �9 £0.20persqft
ItisapparentthatthelargeincreaseinAdministrationisrelatedprimarilytoSiteManagementCosts,butthisincreasewillhavebeendistortedbythechangesinthedatabasethisyear.ThesitecostswerenotprovidedseparatelyforalotofParksinpreviousyearsandwhilemanymoreParksareshowingsitecostsseparatelythisyearmeaningfuldetailcomparisonsarenotpossibleat present. It is significant that Landlords are increasingly showing site costs as a specific heading rather than showing them as part of another category suchassecurityorhealth&safetyashashappenedinthepast.
Audit Feesarerecordedseparatelyforoverhalftheparksandrangefrom£220to£�,900.
Health & Safety expenditure (which is included within Administration) isseparatelyrecordedon165Parksandinthemajorityofcasescoversassessingandauditing.However,itisnoticeablethatforsomeParkstheexpendituremayincludesome degree of implementation and 27 Parks (over 16% of the total) had expenditureinexcessof£5,000.Costsrangeupto£0.29persqftwithanaverageof£0.0�persqft,thesameasRetailParkOSCAR2008.
Average service charge
Class Numbers of Parks Average Rate
BulkyGoodsParks 50 £0.04persqft
RetailParks 71 £0.02persqft
ShoppingParks 44 £0.0�persqft
Theaveragespendwas£2,157perpark(downfrom£2,842inRetailparkOSCAR 2008) with the lowest £40 and the greatest £14,530.
110Parksspentinexcessof£1,000,comparedwith97ParksinRetailParkOSCAR2008.
UtilitiesUtilities costs have increased again this year as a percentage of expenditure,butbylessthanpreviouslyandamountedto2.�%.
Class AverageRate
BulkyGoodsParks £0.04persqft
RetailParks £0.05persqft
ShoppingParks £0.07persqft
ShoppingParksremainasthehighestconsumersofutilities.
Soft ServicesLandscape/Cleaningcostsgenerallyvariedfrom£0.04persqftto£1.55persqftandoverallshowapercentagedecreaseon2008of7.8%.Themidrangeisfrom£0.19persqftto£0.�8persqft.
Class MidRange AverageRate
BulkyGoodsParks £0.17to£0.�7persqft £0.�0persqft
RetailParks £0.19to£0.�6persqft £0.�0persqft
ShoppingParks £0.22to£0.40persqft £0.��persqft
PreviousresearchhasshownthatLandscapeandCleaningcostsaremainlydependentuponthephysicallayoutofaPark,theextentoftheexternal areas and qualitative influences related to the class of parks.
Landscape/Cleaning Rate Per Car SpaceThisrelatesthecleaningandlandscapecoststoameasureoftheextentoftheexternalareasofapark,inthiscasethenumberofcarspacesonapark.
Using data on 121 parks where the number of car spaces were provided thecostsofcleaningandlandscapingwereanalysedtoshowratespercarparking unit. No overall pattern was discernible, but as last year within the midrangesomeconsistencyisdetectable.Thisrateisprovidedasaroughcomparativeonthelandscapingandcleaningcostsforparksasfollows:
Class Rangeperspace MidRange Average
All £1�.7�to£2�2.80 £42.75to£8�.42 £68.68
Bulky (35) £16.36 to £153.57 £41.18 to £80.24 £63.97
Retail (57) £13.73 to £141.83 £40.41 to £80.74 £66.03
Shopping (29) £21.23 to £232.80 £47.68 to £87.05 £79.97
Security–TherangeforthoseParkswithSecurityexpenditurewaslessthan£0.01throughto£1.98persqftwiththeaverage£0.�4persqft.Thisaverageshowsanincreasefrom£0.�0persqftseeninRetailParkOSCAR2008.SecuritycostsincreasefromBulkyGoodsParksthroughtoShoppingParks.
Class MidRange Average
Bulky (40) £0.04 to £0.22 per sq ft £0.21 per sq ft
Retail (76) £0.08 to £0.40 per sq ft £0.31 per sq ft
Shopping (49) £0.19 to £0.75 per sq ft £0.50 per sq ft
SecurityasaproportionofallcostshasincreasedfromRetailParkOSCAR2008,andnowamountstonearly�0%oftotalcosts.
PreviousresearchhasshownthatthelevelofSecurityismostlikelytobeareactiontothelocalenvironmentaswellasqualityofservicetothePark.
Promotionscostshaveincreasedbynearly70%inRetailParkOSCAR2009.15Parksrecordedexpenditureunderthisheading,withtheexpenditure ranged from under £74 to £171,982. 5 Parks are classified as ShoppingParks,9asRetailParksand1asaBulkyGoodsParks.
PromotionsremainrarelyincludedwithintheservicechargeofRetailParksduetooccupiersadoptingnationalpromotionsasopposedtolocalpromotions.Inmanycaseslandlord’scontributionstothisheadingarealsoprominent.
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
10 11
• Hard Servicestheratepersqft/mreducesfromBulkyGoodstoRetailParksandthenincreaseswithShoppingParks.
• Income although generally at a low level is starting to become significant withbothRetailandShoppingParks.
• Insurance. Not included.• Exceptional expenditureincludedwithinhardservices.
SERVICE CHARGE BUDGETS 2009
TheoverallaverageservicechargebudgetrateforRetailParkOSCAR2009calculatedfromthetotaldatabasewas£1.07 per sq ft (£11.52 per sq metre)[RetailParkOSCAR2008was£1.1�persqft].Thehighestratewas£4.44persqftandthelowest£0.0�persqft.
Average Budget ratesClass AverageServiceChargeRate MainRangeMid50%
BulkyGoodsParks £0.8�persqft £0.59to£0.92
RetailParks £1.04persqft £0.67to£1.16
ShoppingParks £1.�8persqft £0.79to£1.82
Budget Components by Park ClassificationService Bulky Goods (68) Retail (95) Shopping (58)
Management
ManagementFee 8.8%-£0.07 8.8%-£0.08 7.9%-£0.11
Administration 9.8%-£0.10 9.5%-£0.09 14.5%-£0.20
Total 18.7%-£0.16 18.�%-£0.19 22.4%-£0.�1
Utilities 6.7%-£0.05 5.6%-£0.06 7.0%-£0.10
Soft Services
Cleaning&Landscaping �2.5%-£0.27 28.8%-£0.�0 2�.�%-£0.�2
Security 17.1%-£0.14 27.�%-£0.29 ��.8%-£0.47
Promotions 0.�%-£0.00 0.4%-£0.00 1.7%-£0.02
Total 49.9%-£0.42 56.5%-£0.59 58.7%-£0.81
Hard Services 24.9%-£0.20 20.0%-£0.20 1�.9%-£0.20
Income -0.2%-£0.00 -0.�%-£0.00 -2.1%-£0.0�
100%-£0.8� 100%-£1.04 100%-£1.�8
Comment
• Managementcostsasaratepersqft/mrisesfromBulkyGoodsParksthroughRetailParkstoShoppingParkswiththeincreasingservicelevels.Administrationisalargerproportionthanmanagementfees.
• UtilitiescostsaresimilarshownintheratepersqftfromBulkyGoodstoRetailParks,butthenrisetoShoppingParksinlinewithincreasedservicerequirements.
• Soft Services. OverallthecostsincreaseacrosstherangeofParkClassesasbothapercentageofexpenditureandaratepersqft/m.
Cleaning/Landscapeexpenditureincreaseinmonetarytermsacrosstherange (Bulky to Shopping).
Security costs increase across the Park classifications both in terms of percentageofexpenditureandratepersqft/m.
Promotions are concentrated in the Shopping Park classification with onlyasmallamountinotherclasses
• Hard Services costsreduceasapercentageofexpenditureandtheratepersqft/mfromBulkyGoodsParkstoShoppingParks,buttheratepersqftisstaticacrosstherange.
• IncomeisgenerallyatalowlevelforBulkyGoodsParks,increasesforRetailParksandisnoticeablyhigherinShoppingParks
• Insurance. Not included.
• Exceptional Expenditureisincludedwithinhardservices
Hard Services
Repairsrangedfromzeroto£0.72persqftanddecreasedby�.8%overRetailParkOSCAR2008.Datafrom11Parkshadrepairscostinginexcessof£0.50persqftofwhichonly�wererecordedas“Exceptional”.Onafurther1�Parksrepaircostswerebetween£0.50and£0.40persqftandofthoseonly�showedtheexpenditureasbeing“Exceptional”.Thisresearchsuggeststhatuseoftheexceptionalcategoryforrepairsremainsrelativelylimited.
Repair costs by Park Classification
Class MidRange Average
Bulky (67) £0.12 to £0.28 per sq ft £0.21 per sq ft
Retail (97) £0.11 to £0.25 per sq ft £0.21 per sq ft
Shopping (52) £0.11 to £0.26 per sq ft £0.25 per sq ft
RepairexpenditurebasedonthisresearchindicatesthattheclassofParkisnotthemajordeterminateinthelevelofexpenditure.Otherresearchhasindicated costs are influenced by Age of Park, previous lack of works, lease responsibilityandimprovements.
Income
IncomerepresentsinterestcreditedtoservicechargesbysomeLandlordsandincomegeneratedincommonareasofsomeoftheParks.Bothoftheseitemshavetheeffectofreducingservicechargeswheretheyappear.Thiselementhasgrowndramaticallythisyearinexcessof500%and66Parks,some�0%ofthedatabase,arenowrecordingincomeinsomeform.Thisrangesfrom£7upto£214,000andtotals£477,�90.Incomespecifically from commercialisation is shown for 23 Parks.
While the headline increase may be distorted by the changes in the databasethisyearandasmallnumberofspecialsituationswhereparksbenefit from some particular feature such as a car park income, the underlyingtrendisformoreparks’servicechargestoincludeincome.
Class MidRange Average
Bulky (13) -£0.03 to -£0.004 per sq ft -£0.004 per sq ft
Retail (33) -£0.02 to -£0.006 per sq ft -£0.04 per sq ft
Shopping (20) -£0.05 to -£0.01 per sq ft -£0.01 per sq ft
SERVICE CHARGE COMPONENTS BY PARK CLASSIFICATION
Service Bulky Goods (67) Retail (97) Shopping (52)
Management
Managementfee 8.5%-£0.07 9.0%-£0.08 7.6%-£0.11
Administration 12.�%-£0.11 10.4%-£0.11 1�.5%-£0.20
Total 20.8% - £0.18 19.3% - £0.19 21.1% - £0.31
Utilities 6.3% - £0.05 5.9% - £0.05 6.6% - £0.10
Soft Services
Cleaning&Landscape �2.4%-£0.29 28.8%-£0.29 21.7%-£0.�2
Security 17.5%-£0.15 28.5%-£0.28 ��.1%-£0.48
Promotions 0.4%-£0.00 0.6%-£0.01 �.0%-£0.05
Total 50.3% - £0.45 57.9% - £0.58 57.8% - £0.84
Hard Services 23.1% - £0.20 19.2% - £0.19 15.8%- £0.23
Income -0.6% - £0.00 -2.4% - £0.02 -1.3% - £0.02
Totals 100% - £0.88 100% - £0.99 100% - £1.46
Individualratesareaffectedbyroundsto2decimalplaces
Comment
• Managementcostsasaratepersqft/mincreaseacrosstheParkclasses (Bulky Goods to Shopping) as would be expected
• Utilities costs rise in rate per sq ft/m for the Shopping Park classification aswouldbeanticipated
• Soft Services.Cleaning&LandscapeMaintenanceasapercentageofspend falls across the range of Park classifications and the rate per sq ft/mincreasebetweenRetailParksandShoppingParks
Security costs increase across the Park classifications both in terms of percentageofexpenditureandratepersqft/m.
PromotionsarenowshownforbothRetailandShoppingParks. OveralltheSoftServicescostsincreaseacrosstherangeofPark
Classesasaratepersqft/m.inlinewiththeincreasedprovisionsintheRetailandShoppingParks
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
12 1�
SERVICE CHARGE 2008 COMPARISON WITH 2007 (OSCAR 2008)
Comparisonofreconciledservicecharge2008withreconciledservicecharge2007
Database ParkClass 2007 2008 Difference
Whole Overall £0.96 per sq ft £1.07 per sq ft £0.11 per sq ft 11.5%
Whole Bulky £0.74 per sq ft £0.88 per sq ft £0.14 per sq ft 18.9%
Whole Retail £0.99 per sq ft £0.99 per sq ft £0.00 per sq ft 0.00%
Whole Shopping £1.25 per sq ft £1.46 per sq ft £0.21 per sq ft 16.8%
This analysis shows rising costs much greater than inflation overall and steepcostincreasesforallparkclasseswiththeexceptionoftheRetailParks.ThedatabasevariedintermsofnumbersandtypesofParksbetweenthetwoyears.Inthedatabasethereare157Parksthatarecommontothetwoyears and a comparison including only those Parks (adjusted database) is shown
Database ParkClass20072008Difference
Adjusted Overall (157) £0.96 £1.01 £0.05 per sq ft
persqft persqft persqft 5.2%
Adjusted Bulky (54) £0.74 £0.80 £0.06 per sq ft
persqft persqft persqft8.1%
Adjusted Retail (72) £1.01 £1.00 -£0.01 per sq ft
persqft persqft persqft-1.0%
Adjusted Shopping (31) £1.24 £1.40 £0.16 per sq ft
persqft persqft persqft12.9%
Analysis shows a year on year increase of 5.2% overall, a figure under half the comparison of the full database. The increase is highest for Shopping Parks, less for Bulky Goods Parks, but with a reduction for Retail Parks.
2009 BUDGET SERVICE CHARGE COMPARISON TO 2008 BUDGET SERVICE CHARGE
Comparisonbetweenbudgetsfor2008and2009fortheentiredatabase.
Database ParkClass 2008 2009 Difference
Whole Overall £1.13 per sq ft £1.07 per sq ft -£0.06 per sq ft -5.�%
Whole Bulky £0.87 per sq ft £0.83 per sq ft -£0.04 per sq ft -4.6%
Whole Retail £1.13 per sq ft £1.04 per sq ft -£0.09 per sq ft -8.0%
Whole Shopping £1.44 per sq ft £1.38 per sq ft -£0.06 per sq ft -4.2%
This research shows a year on year decrease in budgets of 5.3% across all classes, but with a higher decrease for Retail Parks this year.
Using only the same Parks in each year, analysis on this adjusted database isasfollows:
Database ParkClass 2008 2009 Difference
Budget Adjusted Overall (196) £1.13 £1.07 -£0.06 per sq ft persqft persqft -5.�%
Budget Adjusted Bulky Goods (62) £0.83 £0.82 -£0.01 per sq ft
persqft persqft -1.2%
Budget Adjusted Retail (84) £1.15 £1.04 -£0.11 per sq ft
persqft persqft -9.6%
Budget Adjusted Shopping (50) £1.46 £1.42 -£0.04 per sq ft
persqft persqft -2.7%
CommentThereareyearonyeardecreasesforeachclassindividuallyandoverallreflecting the market recessionary influences. Retail Parks show the most markeddecreases.
COMPARISON OF RECONCILED SERVICE CHARGE 2008 TO BUDGETED SERVICE CHARGE 2009
ThissectioncomparestheReconciled 2008 service charge figures with theBudgeted 2009 service charge figures to assess likely future variations incosts.Thisincludesonlythosepropertiescommontoeachdatabaseofwhichtherewere199.
Database Park Class RECONCILED BUDGET Difference
2008 2009
Reconciled/Budget (199) Overall £1.03 per sq ft £1.08 per sq ft £0.05 per sq ft
4.9%
Reconciled /Budget (59) Bulky £0.79 per sq ft £0.84 per sq ft £0.05persqft
6.�%
Reconciled /Budget (90) Retail £0.98 per sq ft £1.06 per sq ft £0.08 per sq ft
8.2%
Reconciled /Budget (50) Shopping £1.41 per sq ft £1.40 per sq ft -£0.01persqft
-0.7%
This analysis shows an overall increase of 4.9% across all Park Classes, which is less than previous years and is a reflection of the recessionary influences and low inflation.
COMPARISON BETWEEN BUDGETS 2008 WITH THE RECONCILED SERVICE CHARGES FOR 2008 FOR THE SAME PARKS
Database Park Class BUDGET 2008 ACTUAL 2008 Difference
Budget Adjusted Overall (187) £1.11 per sq ft £1.03 per sq ft -£0.08 per
sqft-7.2%
Budget Adjusted Bulky Goods (59) £0.79 per sq ft £0.78 per sq ft -£0.01 per
sqft-1.�%
Budget Adjusted Retail (84) £1.16 per sq ft £0.99 per sq ft -£0.17 per
sqft-14.7%
Budget Adjusted Shopping (44) £1.41 per sq ft £1.43 per sq ft £0.02 per sq
ft1.4%
CommentThis shows a saving between budgets and reconciled service charges particularly with Retail Parks as a class. This suggests that Landlords for that class may have cut costs during 2008 and put off expenditure. However, for Bulky Goods Parks and Shopping Parks the budgeting and actual are very close.
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
14 15
Location and size
RECONCILED SERVICE CHARGE BY SIZE AND PARK CLASS
Consistentlyresearchinpreviousyearshasshownthatoverallthe“Size”of individual Parks is seen to be an influence on costs, lowering costs persqftorsqmwithincreasingarea.However,thisismaskedinsomeclassifications by issues of quality, of service and local surroundings. We havenotrepeatedthisanalysisforOSCAR2009.
RECONCILED SERVICE CHARGE BY LOCATION AND SERVICE COST AnalysisinearlierOSCARshasdemonstratedthatthereisaregionalinfluence on costs within Parks with costs tending to be less in the North. This is less strong than “size” influence and can be masked by issues of qualityandareactiontothelocalenvironmenttothepark.InthisOSCARwehavenotcarriedoutfurtheranalysisonthisaspect.
SERVICE CHARGES BY LOCATION, SIZE AND PARK CLASSIFICATION
Park Size Service South North NationalClassification (No of Parks) (No of Parks) Average
BulkyGoods <100,000 £1.00per £0.62per £0.91per
sq ft (35) sq ft (10) per sq ft (45)
Management £0.24 £0.14 £0.20
Man.Fees £0.08 £0.07 £0.08
Administration £0.16 £0.07 £0.12
Utilties £0.06 £0.0� £0.05
Soft Services £0.46 £0.�1 £0.42
LandscapeMaint £0.�5 £0.25 £0.�2
Security £0.11 £0.06 £0.10
Promotions - - -
Hard Services £0.24 £0.14 £0.2�
Income - -£0.01 -
Park Size Service South North NationalClassification (No of Parks) (No of Parks) Average
100,000 £0.71per £1.02per £0.81per
to 200,000 sq ft (13) sq ft (6) sq ft (19)
Management £0.1� £0.21 £0.16
Man.Fees £0.06 £0.08 £0.06
Administration £0.07 £0.1� £0.10
Utilties £0.04 £0.07 £0.05
Soft Services £0.�8 £0.51 £0.42
LandscapeMaint£0.2� £0.�0 £0.25
Security £0.15 £0.21 £0.17
Promotions - - -
Hard Services £0.17 £0.2� £0.19
Income -£0.01 - -
>200,000 £0.77per £0.88per £0.81per
sq ft (2) sq ft (1) sq ft (3)
Retail <100,000 £1.08per £1.00per £1.06per
sq ft (30) sq ft (12) sq ft (42)
Management £0.29 £0.21 £0.27
Man.Fees £0.10 £0.08 £0.09
Administration £0.19 £0.1� £0,18
Utilties £0.04 £0.05 £0.04
Soft Services £0.56 £0.58 £0.57
LandscapeMaint£0.�6 £0.�6 £0.�6
Security £0.18 £0.21 £0.20
Promotions £0.01 - £0.01
Hard Services £0.29 £0.17 £0.25
Income -£0.12 -£0.01 -£0.08
100,000 £1.06per £0.89per £1.01per
to 200,000 sq ft (24) sq ft (11) sq ft (35)
Management £0.19 £0.17 £0.18
Man.Fees £0.09 £0.08 £0.09
Administration £0.10 £0.09 £0.09
Utilties £0.06 £0.04 £0.06
Soft Services £0.61 £0.46 £0.57
LandscapeMaint £0.25 £0.25 £0.25
Security £0.�1 £0.21 £0.�1
Promotions - - -
Hard Services £0.20 £0.2� £0.21
Income - -£0.01 -
0.2
0.4
0.6
0.8
1.0
1.2
0
OSCAR
Rates
Per
Sq F
oot
Retail Park OSCAR - Headline Rates
Year
2004 2005 2006 2007 20092008
BudgetsReconciled SC
COMPARISON OF SERVICE CHARGE BUDGETS AND RECONCILED SERVICE CHARGE YEAR ON YEAR
Agraphhasbeenpreparedtoshowtheheadlineratespersqftoverthelast6years.
Thisclearlyshowstheyearonyearincreasesforthereconciledservicecharges. In the first 3 years this is distorted by changes in database and in realitywewouldexpecttheincreasetobemoregradual.Budgetrateshavebeen shown since first collected and these highlight the fall recorded for 2009.
Onthebasisofthisevidenceweexpectbudgetsfor2010andreconciledservicechargesfor2009tobegenerallystableshowinglittleifanyincrease.
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
16 17
Park Size Service South North NationalClassification (No of Parks) (No of Parks) Average
>200,000 £0.82per £0.85per £0.8�per
sq ft (13) sq ft (7) sq ft (20)
Management £0.14 £0.1� £0.14
Man.Fees £0.07 £0.07 £0.07
Administration £0.07 £0.06 £0.07
Utilties £0.06 £0.07 £0.06
Soft Services £0.51 £0.52 £0.50
LandscapeMaint £0.2� £0.27 £0.24
Security £0.27 £0.2� £0.26
Promotions £0.01 £0.02 £0.01
Hard Services £0.12 £0.14 £0.1�
Income - -£0.01 -
Shopping <100,000 £1.56per £0.91per £1.�9per
sq ft (11) sq ft (4) sq ft (15)
Management £0.�4 £0.16 £0.�0
Man.Fees £0.12 £0.09 £0.11
Administration £0.22 £0.07 £0.19
Utilties £0.09 £0.06 £0.08
Soft Services £0.8� £0.51 £0.7�
LandscapeMaint £0.�6 £0.28 £0.�4
Security £0.45 £0.2� £0.�9
Promotions £0.01 - -
Hard Services £0.29 £0.18 £0.27
Income - - -
100,000 £1.02per £1.�0per £1.12per
to 200,000 sq ft (14) sq ft (8) sq ft (22)
Management £0.17 £0.2� £0.19
Man.Fees £0.09 £0.11 £0.10
Administration £0.08 £0.12 £0.09
Utilties £0.06 £0.0� £0.05
Soft Services £0.61 £0.82 £0.68
LandscapeMaint £0.28 £0.26 £0.27
Security £0.�� £0.56 £0.40
Promotions - - -
Hard Services £0.19 £0.24 £0.21
Income -£0.01 -£0.02 -£0.01
Park Size Service South North NationalClassification (No of Parks) (No of Parks) Average
>200,000 £2.40per £1.59per £2.0�per
sq ft (8) sq ft (7) sq ft (15)
Management £0.5� £0.�7 £0.46
Man.Fees £0.18 £0.11 £0.14
Administration £0.�5 £0.26 £0.�2
Utilties £0.15 £0.14 £0.15
Soft Services £1.�2 £0.96 £1.16
LandscapeMaint £0.46 £0.�2 £0.40
Security £0.70 £0.59 £0.67
Promotions £0.16 £0.04 £0.09
Hard Services £0.41 £0.16 £0.28
Income -£0.01 -£0.05 -£0.0�
Comments
• Analysishastakenthevariantsofsizeandlocationandappliedtheseto service charge cost expenditure within the different classifications of Parkstoprovideasimplebenchmark.Theusefulnessoftheseresultsisverydependentuponthesizeoftheindividualdatabaseineachclassification and the number of Parks included is shown in the table in bracketsalongsidetheappropriaterate.
Thisyearwehaveincludedthenationalaveragetoassistwithcomparison
• Thehighestratewas£2.40persqftforShoppingParksintheSouth,over200,000sqft,whilethelowestwas£0.62persqftinBulkyGoodsParks in the North under 100,000 sq ft.
• Earlieranalysisofsizeandlocationshowsthattheratepersqftwilltendto decrease with size, and be lower in the North. A qualitative effect can beanticipatedandforShoppingParkstobethemostexpensiveandBulkyGoodsthelowest.
• With Bulky Goods Parks the results are very variable. On the small parks there is a wide divergence between South and North with Management administration, Utilities, Landscape maintenance and Hard Services beingmuchmoreexpensiveintheSouth.Theseservicesseemtoindicatethatthereisastrongqualitativedifference.ThemediumParksin the North are substantially more expensive than those in the South
withManagementadministration,Landscapemaintenance,SecurityandHardServicesasthemaindifferences.Thisagainseemstobeaqualitativedifference.ThenumberoflargeBulkyGoodsParksincludedinthedatabaseislimitedandthereforeonlytheheadlineratesareshown.
• Results for Retail Parks follow the expected influences of size, location and classification, although the differential for medium sized parks between South and North is greater than might be expected withSecuritybeingtheprincipalvariant.AcrossthelargeparkstheNorth becomes marginally more costly than the South.
• Results for the Shopping Parks are more influenced by issues of quality with the result that for Parks in the North the costs increase withsize.IntheSouthmediumsizedParksaretheexceptiontothisincreasewithsizewhereManagementadministration,Landscapemaintenance,SecurityandHardservicesarethemainareasofdifference.
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
18 19
Park Classification Size Service South (No of Parks) North (No of Parks) National Average
Bulky Goods <100,000 £0.86 per sq ft (37) £0.74 per sq ft (11) £0.83 per sq ft (48)
Management £0.20 £0.1� £0.18
Man.Fees £0.07 £0.07 £0.07
Administration £0.1� £0.06 £0.11
Utilties £0.05 £0.04 £0.05
Soft Services £0.�7 £0.�4 £0.�6
LandscapeMaint £0.29 £0.28 £0.29
Security £0.08 £0.06 £0.07
Promotions - - -
Hard Services £0.2� £0.2� £0.2�
Income - - -
100,000to
200,000 £0.76 per sq ft (11) £0.95 per sq ft (6) £0.83 per sq ft (17)
Management £0.1� £0.16 £0.14
Man.Fees £0.06 £0.09 £0.07
Administration £0.07 £0.07 £0.07
Utilties £0.0� £0.11 £0.06
Soft Services £0.40 £0.47 £0.4�
LandscapeMaint £0.2� £0.28 £0.25
Security £0.17 £0.20 £0.18
Promotions - - -
Hard Services £0.20 £0.21 £0.20
Income - - -
>200,000 £0.85persqft £0.91persqft £0.87persqft
(2) (1) (3)
Retail <100,000 £1.20 per sq ft (30) £1.02 per sq ft (12) £1.15 per sq ft (42)
Management £0.�0 £0.21 £0.27
Man.Fees £0.11 £0.10 £0.10
Administration £0.19 £0.11 £0.17
Utilties £0.05 £0.06 £0.05
Soft Services £0.58 £0.58 £0.58
LandscapeMaint £0.�7 £0.�4 £0.�6
Security £0.21 £0.24 £0.22
Promotions - - -
Hard Services £0.26 £0.16 £0.24
Income - - -
Benchmark - budgets by location, size and park classification
Park Classification Size Service South (No of Parks) North (No of Parks) National Average
100,000to
200,000 £1.07 per sq ft (23) £1.01 per sq ft (9) £1.05 per sq ft (32)
Management £0.18 £0.19 £0.18
Man.Fees £0.09 £0.09 £0.09
Administration £0.09 £0.10 £0.09
Utilties £0.05 £0.06 £0.05
Soft Services £0.61 £0.52 £0.59
LandscapeMaint £0.27 £0.29 £0.27
Security £0.�4 £0.2� £0.�2
Promotions - - -
Hard Services £0.22 £0.25 £0.2�
Income - - -
>200,000 £0.86 per sq ft (13) £0.75 per sq ft (8) £0.82 per sq ft (21)
Management £0.14 £0.11 £0.1�
Man.Fees £0.08 £0.07 £0.07
Administration £0.06 £0.04 £0.06
Utilties £0.05 £0.06 £0.05
Soft Services £0.54 £0.4� £0.51
LandscapeMaint £0.2� £0.27 £0.25
Security £0.�1 £0.15 £0.25
Promotions - £0.01 £0.01
Hard Services £0.14 £0.15 £0.14
Income - - -
Shopping <100,000 £1.48 per sq ft (13) £0.78 per sq ft (5) £1.29 per sq ft (18)
Management £0.�0 £0.�8 £0.�2
Man.Fees £0.11 £0.12 £0.11
Administration £0.19 £0.26 £0.21
Utilties £0.07 £0.07 £0.07
Soft Services £0.8� £0.64 £0.78
LandscapeMaint £0.40 £0.�4 £0.�8
Security £0.4� £0.�0 £0.40
Promotions - - -
Hard Services £0.27 £0.18 £0.25
Income - -£0.50 -£0.1�
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
20 21
Management - Site Management Resources
While there were substantial increases under this heading in 2008 our assessmentofthemarketpredictsthatSiteManagementResourceswillremainfairlyconstantintermsofcost,withmostcompaniesadoptinganoorlowannualsalaryincrease.Therangeofskillsnowexpectedfromfacilitiesandbuildingmanagementpersonnel,withmanagementoftightbudgetsandsupplierliaisoncomingincreasinglytothefore,requireahigherthaneverleveloftrainingwhichmayincreasenon-wagecosts.Increasedsupportfromcentralteamsandthesubsequentre-allocationofonsiteresourcemaylessentheseeffectsoverall.Pressureonalimitedpoolofsuitably qualified staff, with corresponding increases in market wage rates, maynotbecomeanissueasgoodcandidatesofferingtransferableskillscould be identified from a wider range of backgrounds than those common amongstcurrentsitemanagementpersonnel.
Utilities - Energy
Wholesale prices have fallen from the peak of 2008 but have returned to ageneralupwardtrendwithoccasionalvolatilevariancefromdaytoday.Network charges are increasing across the UK to pay for the modernisation ofutilityinfrastructure.Theintroductionoffeed-intariffsprovidesopportunitiesforsomebutthecostofthissubsidyisbornebyallusers.
The carbon reduction commitment (CRC) has proved to be a costly administrativeburdenintheregistrationphaseandwillcontinuetobesofortheevidencepacks.However,theprovisionofclearinformationonenergyconsumptionisfundamentaltoenergymanagementandpotentialcostreductionstotheoccupiersandlandlordsadvantage.
TherolloutofautomaticmeterreadersongasandsmallerelectricitysupplieswillhaveadirectadvantageforthelandlordsonCRCandoccupiersforenergyandcostmanagement.ThecurrentundercapacityofinstallationteamstomeettheCRCearlyadoptionmetricswilleaseastheyearprogresses.
Utilities - Water
The industry regulator has agreed to above inflation rises to finance investmentinaginginfrastructure.
Soft Services - Security
Securitycostswillgenerallyremainconstantforthethirdsuccessiveyear. Wage increases will be restricted to those sites where recruitment orretentionofstaffisbecomingproblematic.Concernsaboutjobsecuritywhichaccompaniedtheonsetoftherecessionhadledtoreducedchurnlevelsbutathirdyearofwagefreezesmaynowmakerelativelyminorvariationsinwageratesacompellingreasontomove.
Re-visiting specifications and greater use of technology, especially the use ofremotemonitoring,canstillleadtooverallcostreductionsevenwhenwageratesarethreateningtopushcostsup.
Soft services - Cleaning and Environmental
Theeconomicenvironmentwillleadtoathirdyearofminimalcostincreasesfor cleaning. Wages account for the majority of total cleaning costs and as cleaningisagenerallylowpaidindustryminimumwagelevelsbecomeasignificant driver. Increases to minimum wage have put pressure on costs but changes to specifications and the use of machinery can mitigate this and allowoverallcleaningchargestobemaintainedatconstantlevels.
Waste disposal costs continue to rise with year on year above inflation increases in landfill tax being the most significant element. This has encouragedgreatereffortstorecyclebuttheeconomicenvironmenthasledtothereductioninthemarketformanyrecycledproductswhichcouldoffsetsome collection charges. Active efforts to reduce waste going to both landfill andrecyclingwillthereforebethebestwayofkeepingcostincreasesaslowaspossible.
Hard Services - M&E Services
Annual maintenance costs have remained flat as a direct result of the financial climate with tenants looking to minimise their expenditure and landlordsbeingaffectedbyvoidspaces.Insomecases,thescopeofmaintenanceservicinghasbeenreducedineitherthelevel,orfrequencyofmaintenance,toreducecostsfromthepreviousyear.Engineersalarylevelshavebroadlyremainedstatic,althoughthisisexpectedtoincreaseintheshort/mediumtermastheamountofqualityskilledengineersremainsinshortsupply.
Looking to the future
Park Classification Size Service South (No of Parks) North (No of Parks) National Average
100,000 £1.25 per sq ft (14) £1.23 per sq ft (10) £1.24 per sq ft (24)
to200,000
Management £0.20 £0.29 £0.24
Man.Fees £0.09 £0.11 £0.10
Administration £0.11 £0.18 £0.14
Utilties £0.05 £0.07 £0.06
Soft Services £0.75 £0.64 £0.71
LandscapeMaint £0.�2 £0.28 £0.�0
Security £0.4� £0.�6 £0.41
Promotions - - -
Hard Services £0.25 £0.2� £0.24
Income - - -
>200,000 £2.01 per sq ft (7) £1.45 per sq ft (9) £1.69 per sq ft (16)
Management £0.5� £0.�1 £0.�9
Man.Fees £0.17 £0.10 £0.1�
Administration £0.�6 £0.21 £0.26
Utilties £0.18 £0.12 £0.14
Soft Services £1.07 £0.91 £1.00
LandscapeMaint £0.�7 £0.�� £0.�6
Security £0.6� £0.55 £0.59
Promotions £0.07 £0.0� £0.05
Hard Services £0.25 £0.12 £0.17
Income -£0.01 -£0.02 -£0.02
Comments• Analysis of this data has included the size, location and classification of
Parksandappliedthesetobudgetedservicecoststoprovideasimplebenchmark.ThenumberofParksineachcategoryisshowninthetableinbracketsalongsidetheappropriaterate.
• Thehighestratewas£2.01persqftforShoppingParksintheSouthover200,000sqft,whilethelowestwas£0.74persqftforBulkyGoodsParks in the North under 100,000 sq ft.
• AswithReconciledservicechargesthepreviousresearchonsizeandlocationshowsthattheratepersqftwillgenerallydecreasewithsize,and be lower in the North while a qualitative effect can be anticipated
andforShoppingParkstobethemostexpensiveandBulkyGoodsthecheapest.
• RunningcountertothisareBulkyGoodsParksinthemiddlesizerangeof 100,000 to 200,000 sq feet in the North which are more expensive and thelownumberofunitsinthelargersizerangemakesanyconclusionsunsound.
• TheotherexceptionstotheexpectedpatternaretheShoppingParkswherethelargeparksintheSoutharemoreexpensivemainlyduetoincreasesinSoftServicesandManagementAdministrationandinthe North costs increase with size through the range again due to Soft ServicesandManagementAdministration.
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
22 2�
Bytheendof2010allACsystemsshouldhavebeeninspectedbyandAccreditedEnergyAssessortomeetlegislativerequirements.ThereportsshouldprovideanotherusefultoolinwhichtheinformationcanbecollatedandreviewedagainstthewholebuildingservicesandfabrictorealisepotentialenergysavingsandreductioninCO2levels
Hard Services - Fabric Repairs and Maintenance
Tenantscontinuetoincreaseemphasisontheirbuildingsbeingpresentedinexcellentorderasthereisamovetomaintainandenhanceexistingspaceratherthanre-locate.Plannedmaintenanceprogrammesarenowwellestablishedandtheseshouldhavetheeffectofsmoothingyear-on-yearcostsandreducingunplannedexpenditure
Conclusion
Thereisageneralunderstandingthattheeffectsoftheeconomicenvironmentaremorepersistentthanhadbeenimaginedtwoyearsagoandthesuppliermarketsunderstandthatwidespreadcostincreaseswill
not be tolerated. Wages will generally remain static with limited increases in certainareasandcostsavingscanstillbeachievedbycarefulconsiderationof specifications, increased use of technology and diligent management of suppliers.
The key conclusions to be drawn from this research indicate that the economic environment has exerted a major influence on the Retail Park service charges through the responses of Landlords and their agents • The increase of service charges from 2007 to 2008 on “like for like”
parks was 5.2% against the budgeted increase of 6.4%• The 2008 reconciled service charges overall were 7.2% lower than
budgeted • The service charge budgets overall for 2009 are 5.3% lower than the
service charge budgets overall for 2008
Definition of terms
• Types of Retail Parks: Theresearchinearlieryearshasshownthat“planninguser”whichisexhibitedintheuseofeachretailunit,isthemajordeterminateinthegeneration of footfall on Retail Parks and thereby the principle influence on runningcosts.HenceatoneendofthescaleaDIYunitwillhaveadifferentleveloffootfallandrequireadifferentlevelofservicingthanafashionoutlet.Analysisoftheunituserinformation(tenantanalysedastradingin“bulkygoods”, “fashion” or “retail”) on each Park has determined the dominant classification of that Park.
• Bulky Goods Parks (65%+ of unit users are in “bulky goods”) and 76 Parks are in this classification.
• Retail Parks(under�0%unitusersin“fashion”andclothingandnotabove 65% of unit users in “bulky goods”) and 102 are included.
• Shopping Parks (�0%+ofunitusersarein“fashion”andclothingorusuallyfoundinhighstreetlocations,butnotmorethan65%in“bulky goods”) with information from 60 included.
• Size Bands–Thesehavebeenselectedasfollows
• Under 100,000 sq ft (9,290 sq m) covering 116 Parks. • Over 100,000 sq ft (9,290 sq m) but less than 200,000 sq ft
(18,580 sq m) includes 81 Parks. • Over 200,000 sq ft (18,580 sq m) covering 41 Parks. • Thisgenerallyrepresentsafairlyevendistributionbetweenthe
first two categories while the latter one probably reflects the lesser numbersoflargerParksinexistence.
OSCAR – is an acronym for Office Service Charge Analysis Research. ThisanalysiswascommencedbyJonesLangLaSallenearly�0yearsagodealing initially only with office service charges. This was joined by Retail OSCARafterafewyearsdealingwithshoppingcentreservicecharges.TheOSCARnamehasbeenretainedforRetailParksOSCAR.
Data-ThedataonwhichRetailParkOSCARiscompiledisfromtheservicechargecostspaidbyOccupierstoOwnersofRetailParks.ThecostsdonotincludedirectcostsbornebyOccupiersinrelationtothemaintenance,repairanduseoftheirowndemisedunit.Informationhasbeenprovidedonboth“reconciled”servicechargesandservicechargeBudgets
Reconciled Service Charges-Thedataforthe“reconciledServiceCharge” analysis is in the main drawn from audited or certified Service Chargeaccountsmainlyfallingwithinthe2008calendaryear.AllcostsarenetofVAT.
Service Charge Budgets -Thedatafor“Budget”analysiscomesfrombudgetsissuedtotenantsfortheyearmainlyfallingwithinthe2009calendaryear.AllcostsarenetofVAT
Cost-Rates-Thecost-rateshavebeencalculatedbydividingthetotalServiceCharge costs by the gross internal floor area of the retail units within the Park.
Expenditure Definitions
• Management
• ManagementFeechargedforthemanagementofthePark • Administration-Sitesupervision,Health&Safetycompliance,
auditingaccountsandcostsofanysitestaff.Dataforthisheadingisprovidedinvariousheadingsfromdifferentcontributors.TheuseofthissummaryheadingwhilenotreferredtointheCodeofPracticeenablesresultstobeshowninaconsistentmannerforcomparison
• Utilities –Costsofelectricity,gasandwaterpaidforbytheLandlord
• Soft Services • Landscape/Cleaning–CleaningandLandscaping.Thesetwo
headingshavebeencombinedastheyoftenoverlapandsomeOperatorswillputspendunderoneheadingandsomeintheother.We have sought to avoid this confusion by pulling the figures together.
• Security–Costofsecuritycoverandsecurityequipment
• Promotion–Anypromotionalcostsrecoveredviatheservicecharges
• Hard Services–Fabric,DrainageandM&Erepairsandmaintenance.Thisalsoincludesexceptionalexpenditure
• Income –Anyincomecreditedtotheservicechargefromlettingsorinterest
• Insurance–InsurancepremiumshavebeenexcludedfromthisanalysisasinalotofParksinsurancecostsarenotincludedinservicecharges
• Exceptional Expenditure–Dataincludedwithinhardservices.
ThesecostheadingshavebeenpreparedtofollowtheRICSCodeOfPractice–ServiceChargesinCommercialProperty.
Retail Park OSCAR 2009 – Service Charge Analysis for Retail Parks
24 25
Jones Lang LaSalle, 25 Bank Street, Canary Wharf, London E14 5EG +44 (0)20 3147 6040
www.joneslanglasalle.co.uk/OSCAR
Contacts
Management Services
Nigel WheelerChairman of Management Services+44 (0)20 3147 [email protected]
David GriffinDirector ofManagement Services+44 (0)20 3147 [email protected]
Gavin BlackwellAssociate Director ofManagement Services+44 (0)20 3147 [email protected]
Richard AnglissLead Director Management Services+44 (0)20 7399 [email protected]
COPYRIGHT © JONES LANG LASALLE, IP, INC. 2009. All Rights Reserved. While every effort has been made to ensure accuracy andcompleteness, we cannot offer any warranty that factual errors may have occurred. Jones Lang LaSalle cannot accept any legal responsibilityfor any damage or loss suffered by reason of any inaccuracy or incorrectness concerning information and material in this report.
Geographical areas
Location–Thegeographicalareashavebeenchosenasfollows;
Region 1 – London and South East, South, South West, Wales, Midlands and East Anglia with 163 Parks
Region 2 – North (area north of Cheshire, Derbyshire, Nottinghamshire and Lincolnshire) Scotland and Northern Irelandwith75Parks
This selection was adopted because of the lack of a major influ-enceon“costofservices”forRetailParkOSCAR,ofLondonandthe South East, which is contrary to both Retail OSCAR and Office OSCAR service charge analysis. A straight North South divide has thereforebeenadoptedasbelow
Nigel [email protected] +44 (0) 20 3147 1395
RichardAnglissLeadDirectorManagementServicesrichard.angliss@eu.jll.comT +44 (0) 20 3147 5168
CatherineLambertHeadofShoppingCentreManagementcatherine.lambert@eu.jll.comT +44 (0) 20 3147 1263
LucyOldhamDirectorShoppingCentreManagementlucy.oldham@eu.jll.comT +44 (0) 20 3147 7878
[email protected] +44 (0) 1603 646948
Management Services
Contacts
Jones Lang LaSalle, 40 Bank Street, Canary Wharf, London E14 5EG +44 (0)20 3147 6040
Contacts
Property and Asset Management
Nigel WheelerChairman of Property and Asset Management +44 (0)20 3147 [email protected]
David GriffinDirector ofProperty and Asset Management +44 (0)20 3147 [email protected]
Gavin BlackwellAssociate Director ofProperty and Asset Management +44 (0)20 3147 [email protected]
Richard AnglissLead Director Property and Asset Management +44 (0)20 7399 [email protected]
COPYRIGHT © JONES LANG LASALLE, IP, INC. 2011. All Rights Reserved. While every effort has been made to ensure accuracy andcompleteness, we cannot offer any warranty that factual errors may have occurred. Jones Lang LaSalle cannot accept any legal responsibilityfor any damage or loss suffered by reason of any inaccuracy or incorrectness concerning information and material in this report.