The Bellrock Real Estate annual Service Charge Operating Report (SCOR) for Shopping Centres has been released this week.
Developed alongside the Metropolitan State University of Denver, the report highlights a greater need for transparency and compliance within the UK Shopping Centre sector.
This year’s report points to the fact that, although slowly improving year on year, many of the 16 RICS standards for managing and administering service charges are still going unmeasured and unenforced as shown below, and as such that there is a clear need for meaningful improvement.
The Report identifies huge opportunity to drive industrywide compliance with RICS’ Professional Standard on Service Charges in Commercial property:
- Management practice across the commercial property sector can be significantly improved.
- More transparent accounting could provide greater clarity in service charge auditing, and increase the value it adds.
- Reforms in surveyor training can bring more broadly qualified people into the industry from day one.
This objective, fact-based report serves as a challenge to redefine the occupier-agent-landlord relationship.
Business insight powered by academia
The Service Charge Operating Report (SCOR) is based on unbiased, academically validated insights aimed at providing supporting data for shopping centres across the UK. Independently reviewed by Dr Andrew Holt of the Metropolitan State University, Denver, the latest report provides accurate like-for-like comparison of 89 of the largest 100 UK shopping centres.
While inflation, political instability and conflicts around the globe mean that the sector is certainly facing some challenging conditions, the report will provide industry stakeholders with a measure of clarity. As we can see below, occupiers in London pay just under 13% more than tenants in the rest of the UK, a narrower differential in the median figures than in 2022 (30%).
Russell Heath BSc (Hons) MRICS, Bellrock Real Estate’s Head of Occupier Services, commented:
“It seems clear from our research that compliance continues to represent something of a challenge to the industry. I would encourage the RICS to seize the initiative in the forthcoming edition of the RICS Professional Standard by taking further positive steps to support greater transparency and compliance.”
In addition to the Shopping Centre SCOR, two more reports are on the way in early 2024, covering Offices and Retail Parks. The result will be a uniquely comprehensive overview of UK service charges. Vital for anyone looking to make their management more transparent and constructive.