City Exchange, Leeds. Service Charge Forecast 01 April March 2016

Transcription

1 City Exchange, Leeds Service Charge Forecast 01 April March 2016 Gross Lettable Area 120,848 square feet Date opened 1977 Last refurbished 2005

2 Service Charge Booklet Contents: Executive Summary Service Charge Budget Schedule Allocation of Costs Summary of Variances Additional Information Asset Management System (Major Works) Apportionment Schedule Contacts Introduction The primary purpose of this booklet is to provide details of our forecast of Service Charge costs for next year. The booklet therefore contains schedules showing next year s budget against the budget for this year with an explanation of any significant variances. The schedules also show last year s actual reconciled costs as a further reference point. We trust that you will find the information useful; it is supplemented by the Principles and Explanatory Notes booklet which contains generic statements relevant to all our properties under the following headings: Introduction RICS Code of Practice Service Charge Policy Statement Generic Explanatory Notes Consumer Marketing Insurance Senior Management Contact Details 2

3 Executive Summary The total forecast expenditure for service charge year April 2015 to March 2016 is: 697,497 The service charge forecast for 2015/16 shows a slight decrease of ( 4,062) or (0.6)% resulting in a rate per square foot of Full details of this variance can be found in the Summary of Variance section of this booklet. Costs have reduced in various sections of the forecast, however, operational requirements have necessitated an increase of maintenance costs for the heating and cooling system. This new maintenance regime will improve the efficiency of the system and reduce inconvenience caused by plant breakdowns. We have welcomed a number of new occupiers over the last year and have facilitated the fit out contractors in such a way so as to keep general disruption to a minimum. We consistently look for ways to improve our service delivery. We have improved query management by utilising the commissionaire services as the first point of contact. This has improved our response times in addition to providing a more personal touch. The management team will continue to look at innovative ways to increase the high standard of service delivery to enable all our occupiers to trade effectively from City Exchange. Kevin Duffy General Manager T: M: E: kevin.duffy@landsecurities.com 3

4 Service Charge Budget Schedule Budget ( ) Variance ( ) Variance (%) Budget ( ) Actual ( ) Management Fees 43, % 42,269 35,101 Site Management Resources 36,841 1, % 35,484 27,352 Health, Safety & Environment 4,363 (134) (3.0)% 4,497 2,602 Management 84,428 2, % 82,250 65,055 Electricity 104,249 (8,202) (7.3)% 112,451 96,842 Gas 86,957 (7,638) (8.1)% 94,595 91,951 Fuel Oil 120 (120) (50.0)% Water 18,000 (5,400) (23.1)% 23,400 23,128 Utilities 209,326 (21,360) (9.3)% 230, ,921 Security 45,328 3, % 41,840 35,400 Cleaning & Environmental 68,120 (6,864) (9.2)% 74,984 73,383 Soft Services 113,448 (3,376) (2.9)% 116, ,783 Mechanical & Electrical Services 175,579 45, % 129, ,777 Lifts & Escalators 11,145 2, % 8,572 9,055 Suspended Access Equipment 4, % 4,165 2,913 Fabric Repairs & Maintenance 23,493 1, % 21,726 5,898 Hard Services 214,466 50, % 164, ,643 Engineering Insurance 2,829 (3,892) (57.9)% 6,721 2,687 Insurance 2,829 (3,892) (57.9)% 6,721 2,687 Major Works 73,000 (28,000) (27.7)% 101, ,446 Exceptional Expenditure 73,000 (28,000) (27.7)% 101, ,446 TOTAL 697,497 (4,062) (0.6)% 701, ,535 4

5 Allocation of Costs Management Fees 43,224 43,224 Management Fees 43,224 43,224 Staff Costs 28,633 28,633 Site Offices / Accommodation 8,208 8,208 Site Management Resources 36,841 36,841 Health & Safety 4,363 4,363 Health, Safety & Environmental 4,363 4,363 Management 84,428 84,428 TOTAL ALL Electricity - Lighting 98,921 98,921 Electricity Tax CRC 5,328 5,328 Electricity 104, ,249 Gas 80,021 80,021 Gas Tax CRC 6,936 6,936 Gas 86,957 86,957 Fuel Oil Fuel Oil Water 18,000 18,000 Water 18,000 18,000 Utilities 209, ,326 Security 45,328 45,328 Security 45,328 45,328 Cleaning 45,220 45,220 Waste Management 1,920 1,920 Housekeeping / Sundry Costs 19,980 19,980 Seasonal Decorations 1,000 1,000 Cleaning & Environmental 68,120 68,120 Soft Services 113, ,448 Fire Precautions Maintenance 10,716 10,716 Fire Precautions Repairs 5,040 5,040 General Engineering Maintenance 84,986 84,986 General Engineering Repairs 6,900 6,900 Lighting / Electrical Maintenance 2,052 2,052 Lighting / Electrical Repairs 5,681 5,681 Heating / Air Conditioning / Comfort Cooling Maintenance 34,284 34,284 Heating / Air Conditioning / Comfort Cooling Repairs 25,920 25,920 Mechanical & Electrical Services 175, ,579 Lift / Escalator Maintenance 7,905 7,905 Lift / Escalator Repair 3,240 3,240 Lifts & Escalators 11,145 11,145 Suspended Access Equipment 4,249 4,249 Suspended Access Equipment 4,249 4,249 Internal Maintenance 20,876 20,876 External Maintenance 2,617 2,617 Fabric Repairs & Maintenance 23,493 23,493 Hard Services 214, ,466 Lift / Escalator Insurance 1,591 1,591 Heating / Air Conditioning / Comfort Cooling Insurance 1,238 1,238 Engineering Insurance 2,829 2,829 Insurance 2,829 2,829 Plant Replacements 25,000 25,000 Major Building Works 48,000 48,000 Major Works 73,000 73,000 Exceptional Expenditure 73,000 73,000 Sub Total 697, ,497 Total 697, ,497 Grand Total 697, ,497 5

6 Summary of Variances Service Budget 15/16 Budget 14/15 Variance Variance % Management 84,428 82,250 2, % Management Fee - An inflationary increase has been applied to management fees for 2015/16 budgets. Site Management Resources An increase of 1,357 is due to an increase in staff salaries. Health, Safety and Environmental A slight saving of ( 134) has been made in training. Service Budget 15/16 Budget 14/15 Variance Variance % Utilities 209, ,686 ( 21,360) (9.3)% Utilities - There is an overall reduction in utility costs due to an effective purchasing strategy and is aligned to the current consumption levels. Electricity 104,249, a reduction of ( 8,202). Gas - 86,957, a reduction of ( 7,638). Water - 18,000, a reduction of ( 5,400). Service Budget 15/16 Budget 14/15 Variance Variance % Soft Services 113, ,824 ( 3,376) (2.9)% Security An increase of 3,488, is due to an increase in labour costs. Cleaning and Environmental Slight increases in the costs for window cleaning and sanitary services have been offset following a review of the cleaning schedules resulting in a saving of ( 6,864). 6

7 Summary of Variances Service Budget 15/16 Budget 14/15 Variance Variance % Hard Services 214, ,078 50, % Mechanical and Electrical Services - Savings have been made on General Engineering Maintenance ( 3,648) and Lighting Repair ( 4,500), the latter because of the extensive replacement of aging luminaires in the escape staircases that was undertaken in 2014/15. As equipment ages maintenance repairs costs increase, subsequently there is an increase of 9,000 for repairs to chillers and air handling equipment. The remaining increase, is due to a change in the servicing of the air conditioning equipment in the ceiling voids. We will be undertaking a more frequent and comprehensive maintenance regime, this will be timed to cause minimum disruption to the day to day routines of the occupiers. This new regime will help to increase the efficiency of heating and cooling systems and therefore reduce the number of disruptive breakdowns. Lifts - There is an increase of 2,573 in lift repairs, this is due to the age of the lifts, and subsequent increase in wear and tear. Fabric Repairs and Maintenance There is an increase of 1,767 for general building repairs for the cyclic repairs to lobbies and toilet areas. Service Budget 15/16 Budget 14/15 Variance Variance % Insurance 2,829 6,721 ( 3,892) (57.9)% The saving is due to a decrease in the general engineering insurance premium. Service Budget 15/16 Budget 14/16 Variance Variance % Exceptional Expenditure 73, ,000 ( 28,000) (27.7)% A full breakdown of Exceptional Expenditure is available in the AMS section of this booklet. 7

8 Additional Information Apportionment The service charge is apportioned based on the area of each of the demised offices. A schedule of apportionment showing the amounts attributed to each occupier is included within this booklet. Service Partners Key services are provided by the following service providers: Service Service Partner Contract Duration Next Re-tender Cleaning OCS Extension of existing contract for 18 months March 2016 Waste Management Cawleys 3 years March 2017 Security OCS Extension of existing contract for 18 months M&E Services NG Bailey Extension to the existing 3 year contract Lifts Orona Extension to the existing 3 year contract March 2016 April 2016 April 2016 Environmental Achievements The waste contract was retendered in June 2014 and appointed to Cawleys, one of the leading independently owned recycling companies in the UK. Zero waste to landfill will be maintained and recycling rates will be improved therefore further reducing our waste costs. The above signifies Land Securities commitment to reducing our impact on the environment. We will continue to review how we control our energy, deal with our waste streams and investigate innovative ways to further reduce our carbon footprint. Utilities Each individual occupier is metered separately. These meters are located in the central plant rooms on each level. The Landlords electricity supply is metered separately. 8

9 Community Activity (CR) As a Company, Land Securities is committed to making a difference to local communities through corporate responsibility and the notable highlights are: Employment Trinity Leeds appoints a local charity partner annually, decided through a tender process with interested parties. The current charity is St Vincent s which works with individuals in the local community who are in financial difficulty and require assistance with debt advice, numeracy, literacy and IT. Trinity Leeds has run a StepUP programme with the charity which has equipped job seekers with the necessary skills required for returning to employment. Other CR activity involves local schools through the Make The Grade initiative plus partnerships with Leeds College of Art. Local Authority Regular meetings are held with Leeds City Council to help align objectives and partnership working. BACIL (Business Against Crime In Leeds) continues to be a priority, with the Centre Manager taking a place on the board. Local young offenders visit Trinity Leeds as part of their rehabilitation. Health Land Securities will continue to work with Mencap for their national charity partnership until 31 March 2016 and will aim to raise funds and awareness through activity in the Centre. 9

10 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 therefore may be postponed or revised as required by property and market conditions. Service Budget ( ) Budget ( ) Budget ( ) Budget ( ) Budget ( ) 2015/ / / / /2020 Major Building Works Repoint brick work to north/south east elevation and repair coping at high level 48,000 Recover West Roof W1 90,000 Recover Central Roof W4 90,000 Total Major Building Works 48,000 90,000 90,000 Major M&E Works Strategic Repairs 25,000 Chiller Replacement - phased 100, ,000 Boiler replacement 45,000 Refurbish Lifts phased works 400, ,000 Total Major M&E Works 25, , , , ,000 TOTAL 73, , , , ,000 Repoint Brickwork/Repair Coving - 48,000. This is part of the ongoing works to repoint the high level brickwork on the elevations of the building and repair the copings around the perimeter. Strategic Repairs - 25,000 Rather than replace the lifts we will repair strategic parts of them which will enable us to prolong their life by up to two years. 10

11 Apportionment Schedule ALL 697,497 H Tenant Address P R O M S Factors Total Kaplan Financial Ltd 1st Floor (Whole) City Exchange 15,405 88,319 QA Limited 2nd Floor South & North West 11,677 66,946 Leeds & Partners Limited 2nd Floor West Wing (part) City Exchange 4,876 27,955 Capita Hartshead Solutions Ltd 3rd Floor North City Exchange 8,217 47,109 Landsecurities Plc 3rd Floor South City Exchage 8,236 47,218 Vacant 3rd Floor West City Exchage 4,829 27,685 Vacant 4th Floor West Cty Exchange 4,824 27,657 The Secretary of State for Communities and Local Government 4th Floor North & South City Exchange 16,481 94,488 Vacant 5th Floor North Wing City Exchange 8,450 48,445 Vacant 5th Floor South Wing City Exchange 8,450 48,445 VOID 6th Floor North Wing City Exchange 8,450 48,445 Webanywhere Limited 6th Floor South West, City Exchange 3,327 19,074 Vacant 6th Floor South East, City Exchange 5,123 29,371 Masta Limited 7th Floor City Exchange 8,470 48,560 Vacant 2nd Floor North East 4,845 27, , ,497 11

12 Contacts The Team responsible for City Exchange are:- Kevin Duffy General Manager T: M: E: Kevin is responsible for the overall operational and strategic running of the development. Dave Downes Centre Manager T: M: E: Dave is responsible for all aspects of the day to day operation of the development. Emma Lawson Portfolio Manager T: M: E: Emma is responsible for dealing with occupational space requirements, lettings, tenant mix, refurbishment and development matters. Sarah Parkin Management Surveyor T: M: E: Sarah is responsible for the consideration of tenants applications for Landlord consents in respect of assignments, sub-lettings, alterations and general enquiries regarding leases. Julie Goddard Property Accountant T: E: Julie is responsible for the administration of the Service Charge - the apportionment of charges, the annual reconciliation and the processing and allocation of invoices. 12