The Bellrock Service Charge Operating Report (SCOR) for offices has been released this week.
The Bellrock Real Estate Service Charge Operating Report (SCOR) for Offices 2023 has now been released. Developed in association with the Metropolitan State University of Denver, the 2023 report highlights a greater need for compliance across the Offices sector.
The table below highlights compliance rankings against the 16 accounting requirements of the 2018 Professional Standard. The table illustrates how, in addition to the failure to comply with the ‘must’ requirements, compliance was also lacking across many of the other 12 metrics.
Interestingly little has changed from the 2022 SCOR results, which suggests there are still unresolved issues as to how the fundamental requirements of the Professional Standard are being adopted.
The report provides useful insight into 2023 office service charges and highlights key data such as:
- The medians of the total service charge for office buildings in London and the Rest of the UK were £12.06 and £7.85 per sq. ft., respectively.
- The four most significant RICS Cost Classes are Soft services, Hard services, Utilities and Management, which together represent approximately 92% of total budgeted annual service charge spend during 2023.
- Over the last three years, the reported medians show that there is a large overall increase of 45% in service charge costs between 2021 and 2023. Utilities and Exceptional expenditure, rising by 113% and 53% respectively over the three years are the cost classes contributing most to this increase.
In addition to benchmarking the offices sector, service charge data, the report also identifies areas for improvement. Commenting on the report’s findings, Andrew Morley MRICS ACIArb, Head of Real Estate Services, Bellrock said:
“RICS, through the Professional Standard, has attempted to galvanise the industry and set out mandatory requirements as a driver towards best practice.
Sadly, the statistics continue to show that improvements are too little and too slow. In practice, it is clear to me that there are significant aspects of property management that need to be improved and other developing trends that are contrary to the key objectives of the Standard.
However, I remain hopeful that the next iteration of the Standard will move things forward and all stakeholders will embrace it with good intent.”
Business insight powered by academia
The Service Charge Operating Report (SCOR) is based on unbiased, academically validated insights aimed at providing supporting data for offices 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 65 office buildings in London and the Rest of the UK (ROUK).
In addition to the Office SCOR, our Shopping Centres SCOR is available now. Retail Parks will be published in early 2024. The result will be a uniquely comprehensive overview of UK service charges. Vital for anyone looking to make their management more transparent and constructive.
