Retail Oscar warns of rise in shopping centre servie charges

Property Management

ISSN: 0263-7472

Article publication date: 1 May 2000



(2000), "Retail Oscar warns of rise in shopping centre servie charges", Property Management, Vol. 18 No. 2.



Emerald Group Publishing Limited

Copyright © 2000, MCB UP Limited

Retail Oscar warns of rise in shopping centre servie charges

Research released by Jones Lang LaSalle reveals that the average service charge in a shopping centre has risen to £3.05 per sq.ft, 3.75 per cent higher than the average last year. Enclosed air conditioned centres remain the most expensive, where average costs have risen to £3.91 per sq.ft.

Jones Lang LaSalle's Retail OSCAR, which is in its second year, also shows that security has become the major item of expenditure in the majority of the centres. The regional variations in cost have narrowed and the costs of administration, security and cleaning make up more than half the costs of running a shopping centre.

Graham Howat, Jones Lang LaSalle's Shopping Centre Management Group, said:

Whilst this increase may not surprise retailers who have been on the receiving end of service charge demands increasing at a rate above the prevailing level of inflation, the survey identifies the key components of the service charge and how much of the cost relates to labour intensive tasks. Wage cost inflation for the same period was 4.6 per cent. Thus Managing Agents and Owners of property have been successful in controlling costs year on year.

MEPC, Land Securities, Prudential, Legal and General, Standard Life, Norwich Union, Great Portland Estates and LaSalle Investment Management have supported the report, which analyses the service charges of 131 shopping centres in the UK with a floor area of over 32 million sq.ft and annual expenditure of £98 million.

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