Service Charge Expenditure Report Strand. London

Transcription

1 Service Charge Expenditure Report Strand London

2 Meet Landsec Anchor Text - Meet Landsec Our people, our places, our expertise everything is experience Ann-Marie Khan, Operations Director

3 Meet Landsec Explanation of Schedules Apportionment We believe great places are for people to experience and made with the experience of great people. At Landsec, we believe great places are for people to experience and are made with the experience of great people. As the UK s largest listed commercial property company, we own and manage some of the most successful and recognisable assets in the country. In London, from the worldfamous Piccadilly Lights to the transformation of Victoria, SW1, we deliver exceptional experiences for the businesses and people that live and work in, and visit, the capital. We also aim to lead our industry in critical long-term issues from diversity and community employment, to carbon and climate resilience. Everything we do is grounded in experience and begins with people. We deliver value for our shareholders, great experiences for our customers and positive change for our communities. At Landsec, everything is experience. Find out more at landsec.com

4 Anchor Text Strand Overall there has been a 3.7% overspend against the service charge budget. 1 to the 2017/2018 Service Charge Reconciliation Booklet for Strand. As with previous years, this booklet has been prepared to provide customers with details of actual service charge expenditure over the last financial year. Overall there has been a 3.7% overspend against the service charge budget. This is largely due to costs associated with site management resources, such as warranty renewals for I.T. hardware, and unforeseen repairs to plant within the building. However, I am pleased report that Landsec funded the installation of an additional shutter for the back of Buckingham Arcade to tackle the rough sleeping and antisocial behaviour. I hope you find this booklet useful and that it meets with your requirements. However, if you have any specific questions about the information provided then please do not hesitate to contact me. Yours sincerely Hiren Patel Hiren Patel, Operations Manager 4

5 Meet Landsec Explanation of Schedules Apportionment Meet your team 1. Hiren Patel Operations Manager Hiren is responsible for the day to day running of the property, looking after you, our customer and managing all aspects of H&S and service partner performance. Hiren likes to play pool, snooker and darts and loves spending time with his family and friends. 2. David Payne General Manager Dave oversees the strategic property management of the scheme, while leading, mentoring and coaching the Operations Team. Dave has worked for Landsec for over 10 years, in both Operations and Procurement, spanning the London portfolio. Dave currently manages a team who look after properties across Paddington, Piccadilly, Victoria and Strand. 3. Mark Gard Technical Manager Mark provides first line technical support to you and our team, monitoring the performance of the M&E services and manages technical compliance. Mark is a family man who enjoys spending time cooking and gardening. In his spare time, Mark likes to play golf and is even trying to teach his partner and children to play! 4. Joe Thomson Operations Support Assistant Joe looks after the organisation and administration of the teams, data entry and co-ordination of day to day tasks. Joe has been with Landsec for just over a year and helps support several properties across the West End portfolio. 5

6 32-50 Strand 6

7 Meet Landsec Explanation of Schedules Apportionment Inside this document Certification Our Obligations As a responsible Landlord we have a duty of care to act with professional care, diligence, integrity and objectivity in managing the provision of services within the property. For best practice, we endeavour to provide our Customers with the following key elements; Service Charge Customer Statement Service Charge Expenditure Report Service Charge Allocation and Apportionment Service Charge Operational Overview of Variances This report has been produced by Landsec, the Landlord of the property, and relates to the service charge period of 1st April st March This service charge statement was prepared on an accruals basis. Royal Institution of Chartered Surveyors (RICS) Code of Practice, Third Edition This report has been produced having regard to the best practice guidelines for service charges in commercial property and endorses the principles set out in the third edition of the RICS Code of Practice. Both Landsec and the Tenant are still bound by the existing lease terms, which take precedence over the Code of Practice, but would encourage our customers, like ourselves, to be guided by The Code wherever possible. Schedule of Assumptions and Exclusions Empty Unit Voids and Caps - We pay the service charge for any void or empty unit and any service charge contribution which is reduced as a result of any form of concession or capping. Service Charge Exclusions - The service charge costs will NOT include: Initial costs in relation to the original design and construction Setting up costs that are part of the original development Improvement costs above normal maintenance, repair or replacement except where an improvement can be justified to provide benefit to the customers Redevelopment costs Costs which relate to individual occupiers Payment of Interest - It is our policy not to apply interest to on-account service charge contributions. However, we do not apply any of our bank charges back to the service charge. VAT The Landlord has chosen to opt to tax Strand. All service charge expenditure is shown exclusive of VAT. VAT will be charged at the appropriate rate on all service charge payments demanded/invoiced by the Landlord. Certification Period 1 April 2017 to 31 March 2018 Building Strand I hereby certify that the attached statement of reconciled service charge expenditure records the true cost to the Landlord of providing the services to the property for the period 01/04/2017 to 31/03/2018, in accordance with the terms of the lease and, where practicable, the RICS Code of Practice Service Charges in Commercial Property (Third Edition). At year end there are amounts totalling 36, which have been provided for in the service charge expenditure - these allowances have been made to account for expenditure where invoices have not been received. Signed: Semiha Richens Senior Finance Manager - London Landsec 7

8 Explanation of Schedules Anchor Text - Schedules Strand Charles Walden, The Zig Zag Building 8

9 Meet Landsec Explanation of Schedules Apportionment Schedules The service charge has five schedules, please see below: OFFICES Services that benefit the office customers within the property. LBAYLG Services specific to the large loading bay. LBAYSM Services specific to the small loading bay. ARCADE Services which benefit all customers. CARPARK Car park facilities in the main building. The cost summaries on the following pages show the actuals for the service charge year and identify the allocation of costs across the various elements of the property (i.e. schedules). Where there is more than one schedule there is a separate column on the Allocation of Costs Summary for each. This is to ensure that costs are appropriately allocated and that customers only contribute toward the services from which they benefit. 80 Victoria Street 9

10 Year Ending 31 March 2018 Anchor Text - Budget Strand Cardinal Place 10

11 Meet Landsec Explanation of Schedules Apportionment % Allocations Figures rounded to the nearest decimal point. Total Actual 1,018,062 Management and Insurance 153, % Utilities 82, % Soft Services 443, % Hard Services 327, % Exceptional Expenditure 10, % 11

12 Year Ending 31 March 2018 Expenditure Summary Service Charge Expenditure Schedule Management ( ) Budget ( ) Variance ( ) Variance % ( ) Management Fees 29,566 29, % 33,128 Site Management Resources 110,932 71,911 39, % 92,806 Health, Safety & Environmental 7,414 9,571 (2,157) (22.5%) 7,945 Management Sub-total 147, ,048 36, % 133,879 Utilities Electricity 69,328 68,317 1, % 59,448 Gas ,380 (10,806) (94.9%) 5,353 Water 12,897 8,650 4, % 4,839 Utilities Sub-total 82,800 88,348 (5,548) (6.3%) 69,640 Soft Services Security 271, ,149 (12,506) (4.4%) 273,792 Cleaning & Environmental 172, ,629 (8,551) (4.7%) 176,166 Soft Services Sub-total 443, ,777 (21,057) (4.5%) 449,957 Hard Services Mechanical & Electrical Service 276, ,715 17, % 276,468 Lift & Escalators 20,344 15,195 5, % 19,800 Suspended Access Equipment 6,880 3,132 3, % 6,798 Fabric Repairs & Maintenance 24,521 24,864 (343) (1.4%) 26,110 Hard Services Sub-total 327, ,906 25, % 329,176 Insurance Engineering Insurance 5,504 5,955 (451) (7.6%) 5,156 Insurance Sub-total 5,504 5,955 (451) (7.6%) 5,156 Exceptional Expenditure Major Works 10,234 10, % 0 Exceptional Expenditure Sub-total 10,234 10, % 0 Total 1,018, ,033 36, % 987,808 12

13 Meet Landsec Explanation of Schedules Apportionment Allocation of Costs (1 of 2) TOTAL ( ) ARCADE ( ) CARPARK ( ) LBAYLG ( ) LBAYSM ( ) OFFICES ( ) Management Management Fees 29, ,253 Management Fees 29, ,253 Site Management Resources 110,932 63, ,880 Staff Costs 43,480 43, Site Offices/Accommodation 67,453 19, ,880 Health, Safety & Environmental 7,414 5, ,527 Health & Safety 7,414 5, ,527 Management Sub-Total 147,913 69, ,660 Utilities Electricity 69, ,460 Electricity Lighting 56, ,533 Electricity - Lifts/Escalators 9, ,514 CRC Electricity 3, ,412 Gas Gas CRC Gas Water 12, ,897 Water 12, ,897 Utilities Sub-Total 82, ,931 Soft Services Security 271,643 3, ,917 23, ,366 Security 271,643 3, ,917 23, ,366 Cleaning & Environmental 172,078 8,719 1,005 1, ,095 Cleaning 131,571 8,612 1,005 1, ,340 Waste Management 27, ,987 Housekeeping / Sundry Costs 12, ,768 Soft Services Sub-Total 443,721 11,939 1,005 24,248 24, ,461 13

14 Year Ending 31 March 2018 Expenditure Summary Allocation of Costs (2 of 2) Hard Services TOTAL ( ) ARCADE ( ) CARPARK ( ) LBAYLG ( ) LBAYSM ( ) OFFICES ( ) Mechanical & Electrical Services 276,145 5, ,959 Fire Precautions Maintenance 18,235 1, ,479 Fire Precautions Repairs 4,294 1, ,863 General Engineering Maintenance 37, ,524 General Engineering Repairs 11,817 1, ,792 Lighting/Electrical Maintenance 16, ,682 Lighting/Electrical Repairs 5, ,182 Heat/Air Con/Comfort Cooling Maintenance 180, ,728 Heat/Air Con/Comfort Cooling Repairs 1, ,710 Lift & Escalators 20, ,342 2,447 13,556 Lift/Escalator Maintenance 15, ,482 1,435 12,559 Lift/Escalator Repairs 4, ,860 1, Suspended Access Equipment 6, ,880 Suspended Access Equipment 6, ,880 Fabric Repairs & Maintenance 24,521 5, ,489 Internal Maintenance 13, ,784 Internal Repairs 3, ,883 External Maintenance 5,031 5, External Repairs 1, ,823 Hard Services Sub-Total 327,891 10, ,261 2, ,885 Insurance Engineering Insurance 5,504 5, General Engineering Insurance/Inspection 5,504 5, Insurance Sub-Total 5,504 5, Exceptional Expenditure Major Works 10, ,234 Plant Replacements 10, ,234 Exceptional Expenditure Sub-Total 10, ,234 Total 1,018,062 97,119 2,556 30,934 28, ,171 14

15 Meet Landsec Explanation of Schedules Apportionment 15

16 Service Charge Apportionment Year Ending 31 March 2018 Anchor Text - Apportionment Strand Madina Ibrahimi, 123 Victoria Street 16

17 Meet Landsec Explanation of Schedules Apportionment FACTORS ACTUALS CAR PARK SMALL LARGE CAR PARK SMALL LARGE ARCADE (%) COSTS (%) LOADING BAY (%) LOADING BAY (%) ARCADE ( ) COSTS ( ) LOADING BAY ( ) LOADING BAY ( ) ADDRESS OFFICES (%) (INTERNAL AREA) (RATIO) (INTERNAL AREA) (INTERNAL AREA) OFFICES ( ) (INTERNAL AREA) (RATIO) (INTERNAL AREA) (INTERNAL AREA) TOTAL ( ) 34 Strand Ground & Lower Ground 0.00% 1.25% 0.00% 0.00% 10.05% 0 1, ,109 4, Strand Bsmt, Grd, L/Grd & 1st 0.00% 5.99% 0.00% 0.00% 48.32% 0 5, ,946 20,764 38/39 Strand Basement & Ground 0.00% 2.44% 0.00% 2.79% 0.00% 0 2, , John Adam Street Bsmt, Ground-2nd Floors 0.00% 0.88% 0.00% 1.00% 0.00% ,133 36/37 Strand & 2/4 Buckingham Arcade - Grd & Lwr Grd 0.00% 2.32% 0.00% 0.00% 18.71% 0 2, ,788 8,042 48/49 Strand Grd Floor & Bsmt 0.00% 3.56% 0.00% 4.07% 0.00% 0 3, , ,612 49/50 Strand Grd & Bsmt Shop 0.00% 7.38% 0.00% 8.42% 0.00% 0 7, , , Strand 5th Floor & 2 Car Sps 13.47% 9.88% 13.33% 11.28% 0.00% 115,749 9, , , Strand 6th floor & 2 Car Sps 13.49% 9.89% 13.33% 11.29% 0.00% 115,894 9, , , Strand - 7th-8th, & 2 car spaces 14.86% 10.90% 13.33% 12.44% 0.00% 127,688 10, , , Strand 4th Floor & 2 Car Sps 13.46% 9.88% 13.33% 11.27% 0.00% 115,681 9, , , Strand - 2nd Flr, & 2 Car Sps 13.37% 9.81% 13.33% 11.20% 0.00% 114,912 9, , , Strand - 3rd Floor, & 2 Car Spaces 13.47% 9.88% 13.33% 11.28% 0.00% 115,766 9, , , Strand Ground & Lower Ground 0.00% 0.47% 0.00% 0.00% 3.82% ,183 1, Strand Lower grd Floor & Part Basement 6.88% 5.05% 0.00% 5.76% 0.00% 59,114 4, , , Strand 1st Floor and 3 Car spaces 10.98% 8.06% 20.00% 9.20% 0.00% 94,367 7, , ,302 32/33 Strand Ground & Lower Ground 0.00% 2.37% 0.00% 0.00% 19.09% 0 2, ,907 8, % 100% 100% 100% 100% 859,171 97,119 2,556 28,282 30,934 1,018,062 17

18 Year Ending 31 March 2018 Anchor Text - Variances Strand Joana Catarina Rocha De Carvalho, Victoria Street 18

19 Meet Landsec Explanation of Schedules Apportionment Service Charge % Variance against forecast 3.7% -10% to -5% -5% to 0% 0% to +5% +5% to +10% 982,033 Forecast ( ) ,018,062 ( )

20 Year Ending 31 March Strand Management Utilities 111,048 88,348 Budget Budget 147,913 82,800 Actual Actual 36,865 Variance ( 5,548) Variance Site Management Resources The adverse variance is due to an overspend against payroll, which occurred across our portfolio. There was an overspend against IS costs, primarily due to IT hardware warranty renewals, which are important for the IT security and resilience of the property. Health, Safety & Environmental A favourable variance has been achieved under this heading due to audit fees being less than budgeted. Gas There has been a significant saving under this heading due to the budget being set too high. The minimal spend this year is due to the changeover of utility suppliers, which caused delays in receiving our half hour automatic meter readings, which required us to change the recharging methodology to incorporate the service charge amounts. Going forward for 2018/19, the budget will be in line with this new methodology. Water The reason for the overspend against water is primarily due to a large credit that was applied to last years accounts, this led to numbers for the 2017/18 budget being skewed. The actuals for this year are in line with the 2018/19 budget. 20

21 Meet Landsec Explanation of Schedules Apportionment Hard Services Insurance 301,906 5,955 Budget Budget 327,891 5,504 Actual Actual 25,985 ( 451) Variance Variance Mechanical & Electrical Service This year there were a few unforeseen repairs, including a replacement pressure relief valve, sprinkler repairs and a replacement inverter pump. Engineering Insurance A reduction in the group insurance premium resulted in a saving against forecast. Lift & Escalators There is an overspend on this line due to unforeseen repairs that were needed to the lifts in the small loading bay and offices. Suspended Access Equipment This heading sees an overspend due to unforeseen repairs to the cradle and the inclusion of D2E International consultant s costs. 21

22 Contacts Hiren Patel Operations Manager Landsec 16 Palace Street, London SW1E 5JD D/L: +44 (0) Mobile: +44 (0) landsec.com David Payne General Manager Landsec 100 Victoria Street, London SW1E 5JL D/L: +44 (0) Mobile: +44 (0) landsec.com Ann-Marie Khan Operations Director Landsec 100 Victoria Street, London SW1E 5JL D/L: +44 (0) Mobile: +44 (0) landsec.com Publication No. SCE2017/ Land Securities Group PLC 100 Victoria Street, London SW1E 5JL +44 (0) landsec.com