The Bellrock Real Estate Service Charge Operating Report (SCOR) for Retail Parks has been released today following the recent Offices and Shopping Centres publications, and so completing our Real Estate SCOR portfolio for 2023.
The Bellrock Real Estate Service Charge Operating Report (SCOR) for Retail Parks has been released today following the recent Offices and Shopping Centres publications, and so completing our Real Estate SCOR portfolio for 2023. Now we have all three reports we can highlight our findings across the board.
Developed in association with the Metropolitan State University of Denver, the 2023 reports all share a common theme – the greater need for transparency and compliance across all three sectors.
However, care must be taken in terms of drawing conclusions from the comparative “sector-based” compliance analysis. Across the 16 metrics reported in the table below, there are clear differences between the overall level of compliance between the commercial retail and office sectors. In addition, the results for retail parks closely mirror those for shopping centres across many metrics, although there are differences.
Encouragingly, the compliance results from UK shopping centres, multi-let offices and retail parks, do show that some managing parties are trying hard to improve the relevance, representational accuracy, and comparability of the information contained within service charge accounts.
However, further work is needed to meet both the mandatory and “best practice” requirements contained in the Royal Institute of Chartered Surveyors (RICS) Professional Standard. As a result, the compliance results for some of SCOR’s 16 “must” and “should” accounting requirements are still going unmeasured and unenforced, and as such there is a clear need for meaningful improvement.
SCOR’s compliance results suggest that accounting improvement is needed in many areas, especially in terms of:
- The timely delivery of annual service charge accounts.
- Providing a certifying statement that the amounts seeking to be recovered are in accordance with the lease.
- A statement about how insurance claims are accounted for.
- Supporting the accounts by including an independent review in line with the Institute of Chartered Accountants in England and Wales (ICAEW) Technical Release.
- A correct understanding of accrual accounting and its application.
- Improvements in the management, administration and reporting of funds.
“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.”
Russell Heath BSc (Hons) MRICSBellrock Real Estate’s Head of Occupier Services
“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.
Andrew Morley MRICS ACIArbHead of Real Estate, Bellrock
However, I remain hopeful that the next iteration of the Standard will move things forward and all stakeholders will embrace it with good intent.”
What is SCOR?
Now in their 12th year, the Service Charge Operating Reports (SCOR) are based on unbiased, academically validated insights aimed at providing supporting data for offices, retail parks and shopping centres across the UK, and they are independently reviewed by Dr Andrew Holt of the Metropolitan State University, Denver.
Contact
For further information, please contact:
Gemma Williams, Head of Marketing and Communication, Bellrock Group
gemma.williams@bellrockgroup.co.uk
