Service charge components
This details the data for the individual service lines at Parks and is tabled below using the headings recommended in the RICS Service Charge code of practice.
CHART 4
Average service charge components by percentage across all Parks
Major Service Lines (Landscape, Cleaning, Security and Repairs)
In OSCAR 2007 they represent 75.39% of spend, compared to 79%in OSCAR 2006.
Management Fees
As a percentage they have increased in OSCAR 2007 and now on average represent just over 8.5%.
Administration Costs
As a percentage of expenditure they have again increased in OSCAR 2007 to over 9.5%.
Health & Safety
Expenditure is separately recorded within data on 147 Parks and generally covers assessing and auditing issues. Costs range up to £0.18 per sq ft with an average of £0.03 per sq ft, up from £0.01 in OSCAR 2006 and representing an uplift of 200%.
The average spend was £3,873 per park (up from £1,746 in OSCAR 2006) with the lowest £37.50 and the greatest £41,697. 108 Parks spent in excess of £1,000.
The increase in spending on this heading is equally reflected in those Parks that are included in both 2006 and 2007 data and therefore may show a significant trend.
CHART 5
Health & Safety
Utilities
Costs have increased as a percentage of expenditure by over 29%, reflecting the substantial increases in the energy market in 2005/6. This is the second consecutive year that this cost component has risen.
Soft Services - Landscape/Cleaning
Costs generally varied from £0.04 per sq ft (£0.43 per sq m) to £1.59 per sq ft (£17.12 per sq m) and overall show a small percentage decrease on 2006 (3.49%). The mid range is from £0.19 per sq ft (£2.05 per sq m) to £0.37 per sq ft (£3.98 per sq m).
CHART 6
Cleaning
- Landscape and Cleaning costs are dependant upon the physical layout of a Park and qualitative influences including the frequency and extent of service.
- Rate Per Car Space - We obtained data on 140 parks which specified the number of spaces. Using this data as a unit of measure we were able to analyse the cost of Cleaning and Landscaping in relation to the number of spaces. While no clear pattern was observed, the returns (costs per car space) for the mid range in Bulky Goods Parks are much more consistent than for other Classes of Parks.
CHART 7
Cost of cleaning and landscape per car space
Soft Services - Security
The range was £0.00 through to £1.68 per sq ft (£18.08 per sq m) with the average £0.23 per sq ft (£2.48 per sq m) and has remained virtually static as a percentage of expenditure since OSCAR 2005. Considering the range by Class of Parks, the results show that Security costs decline from Shopping Parks to Bulky Goods Parks.
- Where manned security is provided during the day (beyond opening & closing service yard gates) the costs continue to be significant, totalling nearly 30% of all costs across the whole database and slightly up on last year.
- The level of Security is most likely to be a reaction to the local environment as well as quality of service to the Park.
CHART 8
Security
Soft Services - Promotions costs
These have increased in OSCAR 2007. 12 parks recorded expenditure under this heading, with the expenditure ranging from under £240 to in excess of £100,000 and representing a rate of up to £0.26 per sq ft (£2.80 per sq m). 7 Parks are classified as Shopping Parks, 4 as Retail Parks and one as a Bulky Goods Park. However, Promotions are rarely included within the service charge of Retail Parks as occupiers generally adopt national promotions as opposed to local promotions.
Hard Services - Repairs
As a cost heading across all Parks, this component ranged from zero to £0.91 per sq ft (£9.80 per sq m) and decreased by 13% as a percentage of expenditure compared with OSCAR 2006. 10 Parks (out of 238) had repairs costing in excess of £0.50 per sq ft (£5.38 per sq m) and a further 15 were above £0.40 per sq ft (£4.31 per sq m). Repair costs by Class of Park are shown below.
- Costs are influenced by the age of the Park, previous lack of works, lease responsibility and improvements.
- Repairs on a sample of 34 sites were compared with the age of the site, but no clear relationship was observed.
- Separate information on exceptional or refurbishment costs has generally been difficult to clearly identify within the data provided, although we expect the RICS code of practice will make further analysis possible in future years. Only 15 Parks reported exceptional costs and these ranged from £0.18 per sq ft (£1.94 per sq m) to £0.55 per sq ft (£5.92 per sq m).
CHART 9
Repairs
Income
This has been included for the first time and represents interest credited to service charges by some Landlords and income generated in common areas of some of the Parks. Both of these items have the effect of reducing service charges where they appear.
CHART 10
Average percentage components and rates (£) by park class
Average percentage components and rates (£) by park class
- Management costs both as a percentage of expenditure and a rate per sq ft/m increase across all Park classes.
- Utilities costs rise as a percentage of expenditure and rate per sq ft/m across all Park classifications.
- Landscape Maintenance as a percentage of spend falls across the range of Park classifications, although it rose in monetary terms.
- Security costs increase across all Park classifications both in terms of percentage of expenditure and rate per sq ft/m.
- Promotions are concentrated in the Shopping Park classification with only a small amount in Retail Parks.
- Overall, the Soft Services costs increase across the range of Park Classes as both a percentage of expenditure and a rate per sq ft/m.
- Hard Services fall as percentage of expenditure from Bulky to Shopping while as a rate per sq ft/m it increases from Bulky to Shopping.
- Income is generally at a low level although is noticeably higher in Retail Parks.