The Galleria, Hatfield. Service Charge Forecast 01 April March 2012

Transcription

1 The Galleria, Hatfield Service Charge Forecast 01 April March 2012 Gross Area 311,936 square feet Date opened 1989 Annual footfall 5.2 million

2 Service Charge Booklet Contents Executive Summary Service Charge Budget Schedule Allocation of Costs Summary of Variances Additional Information Asset Management System (Major Works) Contacts Apportionment Schedule The primary purpose of this booklet is to provide details of our forecast Service Charge costs for 2011/2012. The booklet contains schedules showing 2011/2012 budget against 2010/2011 budget with explanations of any significant variances. The schedules also show 2009/2010 actual reconciled costs as a further reference point. We trust that you will find the information useful; it is supplemented by the Land Securities Retail Portfolio booklet which contains generic statements relevant to all our properties.

3 Executive Summary The total forecast expenditure for the Service Charge year April 2011 to March 2012 is: 2,774,761 This represents an increase of 0.2% on the budget for 2010/11 and a rate per square foot of As we have put a significant focus on applying the principles of the Ten Point Plan over the last few years to keep Service Charge costs as low as possible, I have included the attached graph to show the 2011/12 budget in the context of historical levels of expenditure. 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , / / / / / /12 Budget Actual As illustrated above we reduced the overall service charge budget in 2009/10 versus the previous year by 4%. Following this we also made a saving of 9% against budget in 2009/10. For 2011/12 there has been a slight increase of 0.2% in the Service Charge budget from 2010/11 which increases the chargeable rate per square foot to Following the fire legislation changes in April 2006, Land Securities replaced the fire alarm on budget, completing the works in November Further to our communication earlier in 2007, the landlord forward funded all the works which have now been repaid in full in 2010/11 ahead of schedule without compromising planned maintenance and enhancement initiatives. Tim Stirling Centre Director T: ext 223 M: E: tim.stirling@landsecurities.com

4 Service Charge Budget Schedule Budget ( ) Variance % Budget ( ) Actuals ( ) Management 664, % 634, ,105 Management Fees 145, % 136, ,109 Site Management Resources 505, % 487, ,898 Health, Safety & Environmental 13, % 10,619 26,098 Utilities 419, % 411, ,803 Electricity 339, % 348, ,295 Gas 40, % 25,000 16,904 Water 38, % 37,524 37,604 Soft Services 978, % 1,005,042 1,030,827 Security 324, % 361, ,284 Cleaning & Environmental 429, % 400, ,881 Marketing & Promotions 225, % 243, ,662 Hard Services 443, % 536, ,366 Mechanical & Electrical Service 336, % 366, ,637 Lift & Escalators 40, % 79,371 39,256 Suspended Access Equipment 1, % 1,773 2,233 Fabric Repairs & Maintenance 63, % 88, ,240 Income -11, % -16,184-18,038 Interest 0 0.0% Income From Commercialisation -11, % -16,184-17,738 Insurance 140, % 127, ,197 Engineering Insurance 11, % 12,992 9,409 All Risks Insurance Cover 129, % 103,938 99,501 Terrorism Insurance % 10,592 11,287 Exceptional Expenditure 139, % 70,000 20,163 Major Works 139, % 70,000 20,163 Total 2,774, % 2,768,266 2,667,423

5 Allocation of Costs The Galleria ALL TENANTS Management 664, ,256 Management Fees 145, ,066 Management Fees 145, ,066 Accounting Fees 0 0 Site Management Resources 505, ,847 Staff Costs 427, ,865 Site Offices/Accommodation 77,982 77,982 Health, Safety & Environmental 13,343 13,343 Health & Safety 13,343 13,343 Utilities 419, ,607 Electricity 339, ,995 Electricity Lighting 339, ,995 Gas 40,937 40,937 Gas 40,937 40,937 Fuel Oil (Heating) 0 0 Fuel Oil (Heating) 0 0 Water 38,675 38,675 Water 38,675 38,675 Soft Services 978, ,611 Security 324, ,363 Security 324, ,363 Cleaning & Environmental 429, ,248 Cleaning 243, ,563 Waste Management 90,095 90,095 Housekeeping / Sundry Costs 32,701 32,701 Landscaping (External) 38,889 38,889 Seasonal Decorations 24,000 24,000 Marketing & Promotions 225, ,000 Hard Services 443, ,005 Mechanical & Electrical Service 336, ,680 Fire Precautions Maintenance 18,746 18,746 Fire Precautions Repairs 16,500 16,500 General Engineering Maintenance 186, ,782 General Engineering Repairs 29,313 29,313 Lighting/Electrical Maintenance 2,598 2,598 Lighting/Electrical Repairs 30,000 30,000 General Machinery 2,704 2,704 Heat/Air Con/Comfrt Cool Maint 20,037 20,037 Heat/Air Con/Comfrt Cool Repairs 30,000 30,000 Lift & Escalators 40,613 40,613 Lift/Escalator Maintenance 40,613 40,613 Lift/Escalator Repairs 0 0 Suspended Access Equipment 1,756 1,756 Suspended Access Equipment 1,756 1,756 Fabric Repairs & Maintenance 63,956 63,956 Internal Maintenance 43,496 43,496 External Maintenance 20,460 20,460 Income -11,159-11,159 Interest 0 0 Income From Commercialisation -11,159-11,159 Insurance 140, ,941 Engineering Insurance 11,022 11,022 Lift/Escalator Insurance 0 0 Heat/Air Con/Comfrt Cool Insur 11,022 11,022 All Risks Insurance Cover 129, ,919 General Insurance 129, ,919 Terrorism Insurance 0 0 Exceptional Expenditure 139, ,500 Major Works 139, ,500 Plant Replacements 104, ,500 Major Building Works 35,000 35,000 GRAND TOTAL 2,774,761 2,774,761

6 Summary of Variances Service Variance Reason Management Fee 8,618 Increases in Management Fees are as a result of the complete recalculation of the recoverable elements of our central overhead costs which also identified a number of areas of Service Charge expenditure that we had previously neglected to recover, mainly in respect IS and HR services. Additionally there have been a number of significant increases in employment related costs. These increases are explained in more detail in the generic booklet that accompanies this document. Site Management Resource Health, Safety & Environmental 18,549 For a number of years we have failed to recover all the costs of providing on site IT equipment, software licences and support. It is the inclusion of these costs and an allocation of the HR costs relating to on-site staff that has mainly led to this increase. 2,724 Increase in data circuit services and administration charges applied. Gas 15,937 Increase in consumption costs due to new boiler located in the new under-croft area. Security ( 37,475) Pay increments of 3% budgeted from April 1st for contract staff has increased the contract value. The decrease is due to a proportion of security costs having been reallocated to Site Management Resources for customer services assistance. Cleaning & Environmental Marketing & Promotions 29,044 Additional hours required facilitating the cleanliness of leisure and external areas and pay increments of 3% budgeted from April 1st for contract staff have increased the contract value. ( 18,000) Saving allocated in order to reduce overall budget. Mechanical & Electrical Services ( 29,944) Decrease due to early repayment of fire alarm last year. AMS works of 46,000 last year not included in this years M&E budget. AMS works for 2011/12 have been reallocated to Major Works. Lifts & Escalators ( 38,758) Decrease due to AMS works of 40,000 last year not included in this year s lifts and escalators budget. AMS works for 2011/12 have been reallocated to major works.

7 Summary of Variances Service Variance Reason Fabric Repairs & Maintenance ( 24,680) Saving allocated in order to reduce overall budget. Engineering Insurance ( 1,970) Saving due to change of supplier following the retender carried out by the Land Securities insurance team. All Risks Insurance Cover 25,981 All risks cover premium includes the provision for terrorism so there is a 13.4% variance on the total all risks and terrorism from This is to allow for buildings inflation and forecasted rating increases in 2011 for both Property Owners Liability and buildings rent premiums. Terrorism Insurance ( 10,592) Terrorism insurance is now included within the all risks insurance cover premium. Major Works 69,500 AMS works last year included within M&E and Lifts & Escalators budgets totalling 86,000; AMS works have now all been re-allocated to Major Works. Please see AMS Major Works for a breakdown of 11/12 AMS works.

8 Additional Information Apportionment Service Charge expenditure is apportioned according to individual square footages. There is no weighted apportionment within any of the leases at the Galleria. Service Partners Key services are provided by the following service providers: Service Service Partner Contract Duration Next Re-tender Cleaning GBM 3 years 2012 Waste Management Futur 1 year 2011 (Waste Collection) Waste Management ACM 3 years 2013 (Compactors / Bailers) Security MITIE 3 years 2012 M&E Services Inviron 3 years 2012 Environment & Sustainability The Galleria was nominated to represent Land Securities in order to successfully retain Certification Approval of the groups Environmental Management System Standards (ISO 14401). 2010/11 Environmental Achievements: Replacement of the lighting control system. Installation of CO2 sensor to activate extract fans when CO2 is detected. Installation of presence detection on light fittings. Replacement of light fittings and lamps with energy efficient alternatives. Rainwater harvesting (due for installation Feb / Mar 2011) funded by the landlord 2010/11 Waste Management Achievements: The Galleria this year to date has achieved a waste management recycling volume of 54%. Increases on food waste recycling year on year by 191% and mixed waste recycling of 180%. The Galleria sponsored and was a finalist in the inaugural Herts Green Awards /12 - Environmental Targets: LS Group targets were set to reduce average CO2 emission by 30% by 2020 (compared to 2000/2001) which leads to interim reduction targets for the Galleria of 5.8% over the next three years. In 2011 the Galleria will replace existing T8 type lighting with T5 fluorescent from the landlord s budget. Waste management recycling target for 2011/12 is 70%. The Galleria will hold two Environmental Planet networking events.

9 Asset Management System (Major Works) Land Securities have for a number of years utilised an Asset Management System (AMS) that helps us plan major items of building fabric and building services repairs/renewals. This year planned expenditure is focussing over the coming 5 year period and on works with a contract value in excess of 20,000. The results are shown on the graph and the table below. The scale and timing of this expenditure is revisited each year in the preparation of the Service Charge Booklet and figures may therefore be may be postponed or revised as required by property and market conditions. Service Budget ( ) Budget ( ) Budget ( ) Budget ( ) Budget ( ) 2011/ / / / /2016 Fabric Works 35, ,000 95,000 75,000 0 Resurface roads. Resurface roads. Resurface roads. Resurface roads. Planar Glazing. Replace roof bearings. Re-paint North end wall & mast structure. Replace roof bearings. Re-paint South end wall structure. Replace roof bearings. General M&E Works 79,500 25,000 75,000 75,000 75,000 Foul water & storm pump Lighting Electricity Data meter. Lighting Lighting PA/VA Lighting PA/VA Lighting PA/VA Lifts ,000 25,000 0 Refurbish Lift 8. Refurbish Lift 9. Heating 25,000 70,000 45,000 72, ,000 Bridge Boiler Bridge Boiler Chiller Dry Coolers Dry Coolers Chiller VRV system Main Boiler TOTAL 139, , , , , , , , , ,000 50, / / / / /16

10 Contacts Tim Stirling Centre Director T: ext. 223 M: E: Tim is responsible for all aspects of the day-to-day operation of the shopping centre and effective management, with the on-site team of the Service Charge budget. Howard Smith Portfolio Manager T: E: Howard is responsible for dealing with occupational space requirements, lettings, tenant mix, refurbishment and development matters. Charmaine Skinner Property Accountant T: ext. 222 E: Charmaine is responsible for the administration of the Service Charge - the apportionment of charges, the annual reconciliation and the production of on account and balancing charges.

11 Apportionment Schedule Land Securities Group PLC Apportionment Schedule 4770 The Galleria All Tenants TOTAL 2,774,761 2,774,761 Factors Forecast Address Tenant All Tenants All Tenants TOTAL 1 Marks & Spencer PLC 11, , ,250 2 Mexx Limited 2,564 22,808 22,808 3 C & J Clark International Limited 2,805 24,951 24,951 4 Baron Jon Menswear Limited 3,131 27,851 27,851 5 Pavers Limited 3,131 27,851 27,851 6 Cotton Traders Limited 1,802 16,029 16,029 6a Suits You Limited 1,733 15,416 15,416 7/8 Waterstone's Booksellers Ltd 10,577 94,085 94,085 9 Vacant 2,336 20,779 20, Gant UK Ltd 2,157 19,187 19, Clinton Cards (Essex) Limited 2,850 25,352 25,352 12/13 HMV UK Limited 6,070 53,994 53,994 14/15/16 GAP 7,550 67,159 67,159 17a Funk Rock 2,728 24,266 24,266 17b The Countryside Trading Company 2,618 23,288 23,288 17c Sportsdirect.com Retail Limited 7,700 68,494 68, Calvin Klein 1,591 14,152 14, Antler 2,090 18,591 18, Austin Reed Limited 2,090 18,591 18, Mountain Warehouse Limited 2,054 18,271 18, Daniel Footwear 1,901 16,910 16, Trespass 2,107 18,742 18, Jaeger 2,107 18,742 18, The Clinkard Group Limited 2,621 23,315 23, Farah 2,107 18,742 18, Pringle of Scotland Limited 1,955 17,390 17, The Jewellery Outlet Ltd 1,372 12,204 12,204 29a/b Allwellangood 1,430 12,720 12,720 29c Moss Bros 3,493 31,071 31,071 29d Caffe Pitti 1,760 15,656 15, NBC Apparel 37, , , Camile 3,022 26,882 26, The Body Shop International PLC 2,289 20,361 20, Baggage Factory 2,087 18,564 18, Yumi 1,801 16,020 16, Carlad 1,894 16,848 16, Playtex 1,200 10,674 10, The Carphone Warehouse UK Ltd 1,717 15,273 15, Bedeck 1,717 15,273 15, Ghost Limited 1,717 15,273 15, Denby 1,717 15,273 15, Laura Ashley 3,493 31,071 31,071 46/47 Choice Discount Stores Limited 8,968 79,773 79, Vacant 3,500 31,134 31, Superdrug Stores PLC 5,019 44,645 44, Choice Home 3,365 29,933 29, R&S 1,690 15,033 15, Mileta Sports Limited 1,576 14,019 14, Madhouse 1,643 14,615 14, Officers Club 1979 Limited 2,322 20,655 20, Past Times 1,500 13,343 13, The John David Group PLC 2,275 20,237 20, The Works Retail Limited 2,275 20,237 20, Bling & Things 1,937 17,230 17, Le Creuset 1,214 10,799 10, French Connection 2,950 26,241 26, Costa Limited 1,154 10,265 10, Nike 4,952 44,049 44, Bella Italia 5,327 47,385 47,385 63a/b Vacant 3,100 27,575 27, Heng Jia (Holdings) Limited 4,515 40,162 40, Roma Leisure (Central) Limited 3,036 27,006 27, Nandos Chickenland Limited 4,546 40,438 40,438 66a Vacant 567 5,044 5, UCI Exhibition (UK) Limited 41, , , McDonald's Real Estate Company 7,230 64,313 64, Frankie & Benny's 3,244 28,856 28, Chiquito 3,688 32,806 32,806 71/72 ilaichi 3,970 35,314 35,314 75/76/77/78 Whittard of Chelsea PLC 1,297 11,537 11,537 79/80 Claire's Accessories UK Ltd 1,585 14,099 14, Eleganze 4U 280 2,491 2,491 83/84 Music Sales Ltd 1,474 13,112 13, Pineapple 809 7,196 7, Bijoux 959 8,531 8,531 87/88/89 Thorntons PLC 2,154 19,160 19,160 90/91 Vacant 1,591 14,152 14,152 91a Vacant 478 4,252 4, Vacant 809 7,196 7, My Specs 809 7,196 7,196 94/95 Vacant 1,064 9,465 9, Big Poster 925 8,228 8, Julian Graves 1,972 17,542 17, Jeff Banks 988 8,789 8, Oak Denim 988 8,789 8, Fiorelli 922 8,201 8, Town Centre Restaurants 2,400 21,349 21, Caspian UK Group Limited 3,600 32,023 32, Shake 'A' Shake 430 3,825 3,825 TS7 Jaweed Popal 239 2,126 2, ,936 2,774,761 2,774,761