National average component service charges
The average figures for service charges are:
- Air-conditioned building costs have increased by 1% to £6.94 per sq ft.
- Non air-conditioned building costs have stayed relatively unaltered rising to £5.47 per sq ft from £5.45 per sq ft for the previous year.
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By way of comparison the Retail Price Index increased by 4% during the same period.
Analysis of cost categories.
Air-conditioned and non air-conditioned properties show close parity in the following heads of expenditure.
• Management fees
• Site Management Resources
• Gas
• Water
• Cleaning and environmental
• Lifts and escalators
Air conditioned buildings cost more in terms of:
• Electricity
• Security
• M and E Services
Non air-conditioned buildings cost more in terms of:
• Fabric repairs and maintenance.
Our brief observations on each of the cost categories are as follows:
Utilities
As predicted in the previous OSCAR report electricity continues to show a sharp increase in costs for air-conditioned buildings (15.5%) and a more moderate rise (5.3%) for non air-conditioned properties This reflects the volatility in the wholesale energy market and the fact that air conditioned buildings are generally occupied for longer hours than non air conditioned properties.
In comparison, the costs for gas and water have been more stable, with costs marginally decreasing for gas in both categories and rising slightly for water in air conditioned buildings and decreasingly marginally for non air-conditioned properties.
Security
This category has shown some of the steepest rises in costs for air-conditioned properties. This reflects the trend we have seen in the previous three years, of occupiers requiring a higher level of manned security to act as a more obvious deterrent against crime and potential terrorist activity in higher profile air-conditioned buildings. The working time directive and SIA licensing have also served to increase costs. In non air-conditioned properties the costs have remained relatively static, which is a reflection of the fact that they represent lower profile buildings, but also follows increases investment in security costs over a number of previous years.
Cleaning and environmental
There has been a slight rise of 2.0% for air-conditioned buildings and a fall of 1.7% for non air-conditioned properties. This category is driven largely by labour rates which have remained relatively static during the period under review.
M and E Services
This category shows a slight decrease of 2.5% for air-conditioned buildings and a marginal increase of 2.7% for non air-conditioned space.
Lifts and escalator maintenance
Costs have fallen back under both building types. The costs under non air-conditioned buildings have fallen back considerably, but this appears to be driven by the costs recorded from the previous year being exceptionally high. This aside, the ten year average for both building types appears very flat with costs consistently around £0.20 - £0.25 per sq ft.
Fabric repair and maintenance
As detailed above this is the one category where costs are higher on a per sq ft basis for non air-conditioned buildings. This is due largely to more aged stock of non air-conditioned buildings in the sample size therefore requiring greater ongoing maintenance.
Site Management Resources
The costs of on site staff in non air-conditioned buildings have risen appreciably over the previous year. However, if we examine the non airconditioned trend analysis in Chart 32 it will be noted that since 2003 the average annual increase has been at circa 4.5%. The exceptional year was in 2006 when costs under this heading fell. We now consider that the 2006 figure reflected some anomalies in the data from last year and that the rise will continue at inflation or just above to take into account such items as working time directives and wage increases.
National average component service charges
National average component service charges by %
