Property Solutions have developed a theoretical model of service charge costs based on various internal and external sources of information. This includes an extensive investigation of a typical regional city covering some 15 million sq ft of office premises backed up by over 10 years of hands-on experience working on over 1,000 buildings for clients in various locations throughout the UK.
This national guide to actual service charges in multi-let commercial premises is published annually by Jones Lang Lasalle (JLL). The 2002 report is based on data from 281 buildings with a total net lettable area of c15 million sq ft - an average building size of 53,381 sq ft. The information is drawn from JLL's clients as well as 8 institutional landlords.
Oscar shows average service charge costs of £5.22 per sq ft for air-conditioned buildings and £3.69 per sq ft for non air-conditioned buildings but makes no statements about what service charges should be. A detailed comparison between our benchmark costs and those reported by JLL shows Oscar costs are some 30% higher than our benchmarks. This is entirely consistent with our findings when seeking value-for money service charges for our clients. Service charge savings can be achieved.
In 2002 it was reported that there were 978 million sq ft of offices in the UK. (Source: University College London, Jan 2002) This stock has doubled in the last 10 years. We estimate that c. 40% is multi-let. The tenants of this 391m sq ft will be paying service charges estimated at £2 billion. From our experience of typical cost savings achievable office tenants could collectively be over-paying by up to £600m per annum nationally!!