• Foreword
• Executive summary
• The database
• The sample structure
• National average component service charges
• National average component service charges by percentage
• Total service charge by building location and by building size
• Component service charges by building location
• Service charge trends 1983-2006
• Looking to the future
• Definition of terms
• Geographical areas
• Data contributors
• Contact us
• Download OSCAR PDF

Component service charges by building location

All property types

Management Fees and Site Management Resources

Whilst the average cost of Management Fees and Site Management Resource now appears fairly consistent across all property types and locations (i.e. c. £0.50 to £0.75 per sq ft), there is far greater volatility in the Site Management Resource costs. This is most likely service quality led, but may also demonstrate inconsistencies in the approach to recovering Site Management Resource costs.

Gas and Water

Gas and Water costs appear very consistent across all property types and locations, with little variance in upper and lower limits in real terms (however, the variances in relative terms are high), i.e:

	Average Regional Cost	Average Regional Range
Gas	£0.30 per sq ft	± 57% from mean
Water	£0.11 per sq ft	± 67% from mean

Security

The results start to show a consistency in the cost of Security between air-conditioned and non air-conditioned properties outside of the central London. The average costs rank as follows:

	A/C	Non A/C
West End	£1.60 per sq ft	£1.40 per sq ft
City & Docklands	£1.40 per sq ft	£0.90 per sq ft
Greater London	£0.90 per sq ft	£0.90 per sq ft
All other regions	£0.50-0.75 per sq ft	£0.50-0.75 per sq ft

This indicates a range of Security costs that are driven by service expectation and perceived threat.

However, there is a great volatility in real terms in the cost of Security at any given location, with an average range between upper and lower limits is £1.11 or ± 58% from the mean.

Cleaning & Environmental

Cleaning & Environmental costs also appear very consistent across all property types and locations, with an average regional cost of £0.73 per sq ft and range between the upper and lower limits of ± 44% from mean.

M&E Services

M&E Services show a fairly consistent step up in cost between non air-conditioned and air-conditioned properties at any given location (on average £0.35 per sq ft). The average costs rank approximately as follows:

	A/C	Non A/C
City & Docklands	£1.70	£1.40
West End	£1.50	£1.25
Greater London	£1.25	£0.80
All other regions	£1.00	£0.50

This illustrates a hierarchy in service delivery and expectation, ranging from basic reactive maintenance to full planned preventative maintenance, with focus on the resilience of systems.

Lifts & Escalators

The cost of Lift and Escalator maintenance for the non air-conditioned buildings in our sample appear a little erratic, with an especially high range of costs for those buildings in the Midlands region. The average regional cost of Lift and Escalator maintenance cost across both property types is £0.33 per sq ft. If we disregard the result of non air-conditioned buildings in the Midlands region, the other average regional costs fit quite closely around this average.

Fabric Repair and Maintenance

The average regional cost across both property types is £0.56 per sq ft. However, there is significant variance around this value, which reflects the typically reactive nature of this head of expense.

We are seeing evidence of there being a 'core' service charge cost to run a building regardless of whether it is air-conditioned or non air-conditioned. Over and above this, increased Electricity and M&E Services costs arise on air-conditioned properties. Finally, additional variations in cost then occur driven by service expectation.

Air-Conditioned

Within reason, we can see a similar cost profile across all locations for:

• Management Fees
• Site Management Resources
• Gas
• Water

Properties located in City & Docklands, West End, Greater London and South East) show a higher spend on Security and M&E Services.

Electricity

There is an indication of a stepped increase in Electricity costs for City & Docklands and West End compared to all other locations (i.e. average cost of £1.00 compared to £0.75 per sq ft). However, in general terms, the Electricity results appear surprisingly uniform across all locations:

• Average cost c. £0.90 per sq ft
• Lower limit c. £0.40 per sq ft
• Upper limit c. £1.40 per sq ft

The wide range between upper and lower limits may stem from variance with any of the following factors:

• Tenant recharging
• Tariff rate
• Consumption and operational hours

Buildings located in the City, Docklands and West End show a higher cost per sq ft in respect of Electricity and M&E Services, generally due to the greater specification and sophistication of these buildings. The cost of Security for buildings in the South East has shown an appreciable increase in the past year and is now close to those found in the City, Docklands and West End.

The remaining heads of expenditure appear relatively consistent across all locations as detailed within CHARTS 19-24. The exception being Site Management Resources (i.e. building management staff costs), where there is quite a significant 'fall away' of costs in the Outer Regions and Midlands.

Non Air-Conditioned

Buildings located in the City, Docklands and West End cost more in terms of M&E Services and Security and Management fees. As noted in previous OSCAR reports, the following heads of expenditure appear to be more erratic across all locations:

• Lifts & Escalators
• Fabric Repair and Maintenance
• Site Management Resources

We would comment further under each of the cost headings:-

Electricity

There is some indication of a stepped increase in Electricity costs for the City & Docklands and West End locations compared to all other locations, as demonstrated by the air-conditioned properties. However, this is not so clear cut and the cost of Electricity is fairly erratic across all regions. Again, this could be attributable to any combination of variance with:

• Tenant recharging
• Tariff rate
• Consumption and operational hours

CHART 19 Component service charge City & Docklands A/C buildings (spread of middle 50% of service charge costs)

CHART 20 Component service charge West End A/C buildings (spread of middle 50% of service charge costs)

CHART 21 Component service charge Greater London A/C buildings (spread of middle 50% of service charge costs)

CHART 22 Component service charge South East A/C buildings (spread of middle 50% of service charge costs)

CHART 23 Component service charge Midlands A/C buildings (spread of middle 50% of service charge costs)

CHART 24 Component service charge Outer Regions A/C buildings (spread of middle 50% of service charge costs)

CHART 25 Component service charge City & Docklands Non A/C buildings (spread of middle 50% of service charge costs)

CHART 26 Component service charge West End Non A/C buildings (spread of middle 50% of service charge costs)

CHART27 Component service charge Greater London Non A/C buildings (spread of middle 50% of service charge costs)

CHART 28 Component service charge South East Non A/C buildings (spread of middle 50% of service charge costs)

CHART 29 Component service charge Midlands Non A/C buildings (spread of middle 50% of service charge costs)

CHART 30 Component service charge Outer Regions Non A/C buildings (spread of middle 50% of service charge costs)