Service Charge Expenditure Report 2016-17 Lewisham ... Shopping... · outstation upgrades, ... is reduced as a result of any form ... expenditure - these allowances have been made

Service Charge Expenditure Report 2016-17

Lewisham Shopping Centre

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2Service Charge Expenditure Report 2016-17

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Explanation of Schedules

Actuals 2016-17

Apportionment

Summary of Variances

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Anchor-Welcome3Service Charge Expenditure Report 2016-17

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Actuals 2016-17

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Welcome to the 2016-17 Service Charge Reconciliation Booklet for Lewisham. As with previous years, this booklet has been prepared to provide our occupiers with details of actual service charge expenditure over the last financial year. In 2016 we transitioned to new soft and hard services providers: Interserve & NG Bailey on portfolio-wide contracts. This enabled us to provide significant saving to the security related codes.In September 2016, we launched our Share Your Thoughts initiative, where guests can give quantitative and qualitative feedback on all aspects of their visit to the Centre and their interactions with amenities and our staff. This feedback is discussed and analysed by both Portfolio and Centre Management teams, and shared with Service Partners. This allows us to make more informed decisions about the things our customers care about, and to track improvement across the centre. In March, we also launched our Rewards & Recognition programme to motivate Service Partner staff to provide excellent customer service.Major works included Building Management System outstation upgrades, sprinkler repairs and roof repairs to help ensure the Centre’s infrastructure remains strong. In the past year, we also maintained our H&S and Environmental compliance to ISO18001 and ISO14001 standards and 94% (Very Good) in our internal environmental audit and 95% (Excellent) in our internal health and safety property health check. In the forthcoming period, we are investing in the physical appearance of the centre and improving guest services based upon our customer feedback items such as the refurbishment of the public toilets, mall entrance redecoration, new internal wayfinding and mall directories, internal redecoration and providing more half-term activities. Significant landlord contributions to the above will all help to raise the standards at Lewisham in line with our customer and portfolio expectations. Finally, we are to recruit a new Operations Manager to fill the role that is currently vacant.I hope you find this booklet useful and informative and, as always, if you have any queries concerning the content then please do not hesitate to contact me.

Warm regards

Paul Redden Centre Manager

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“Our deep understanding of consumer expectations of convenience, comfort and entertainment means that our properties are managed to support our retail partners in achieving strong performance”


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Inside this document

Our Obligations As a responsible Landlord we have a duty of care to act with professional care, diligence, integrity and objectivity in managing the provision of services within the property.For best practice, we endeavour to provide our Customers with the following key elements;

— Service Charge Customer Statement— Service Charge Expenditure Report— Service Charge Allocation and Apportionment — Service Charge Operational Overview of Variances

ActualsThis report has been produced by Landsec, the Landlord of the property, and relates to the service charge period of 1 April 2016 - 31 March 2017. This service charge statement was prepared on an accruals basis.

Royal Institution of Chartered Surveyors (RICS) Code of Practice, Third Edition This report has been produced having regard to the best practice guidelines for service charges in commercial property and endorses the principles set out in the third edition of the RICS Code of Practice.

Both Landsec and the Tenant are still bound by the existing lease terms, which take precedence over the Code of Practice but would encourage our occupiers, like ourselves, to be guided by The Code wherever possible.

Schedule of Assumptions and ExclusionsEmpty Unit Voids and Caps - We pay the service charge for any void or empty unit and any service charge contribution which is reduced as a result of any form of concession or capping.

Service Charge Exclusions - The service charge costs will NOT include:

— Initial costs in relation to the original design and construction— Setting up costs that are part of the original development— Improvement costs above normal maintenance, repair or replacement except where an improvement can be justifi ed to provide benefi t to the occupiers— Redevelopment costs— Costs which relate to individual occupiers

Payment of Interest - It is our policy not to apply interest to on-account service charge contributions. However, we do not apply any of our bank charges back to the service charge.

Certifi cation

Certifi cation Period 1 April 2016 to 31 March 2017

Building

I hereby certify that, the attached statement of reconciled service charge expenditure records the true cost to the Landlord of providing the services to the property for the period 1 April 2016 to 31 March 2017, in accordance with the terms of the lease and, where practicable, the RICS Code of Practice Service Charges in Commercial Property (Third Edition).

Signed:

Andy Williams F.C.C.ASenior Finance Manager Landsec

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At year end there are amounts totalling £387,936.38 which have been provided for in the service charge expenditure - these allowances have been made to account for expenditure where invoices have not been received.


VATAll service charge expenditure is shown exclusive of VAT. VAT will be charged at the appropriate rate on all service charge payments demanded/invoiced by Landlord.


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Actuals 2016-17

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The cost summaries on the following pages show the actuals for the service charge year and identify the allocation of costs across the various elements of the property (i.e. schedules). Where there is more than one schedule there is a separate column on the Allocation of Costs Summary for each. This is to ensure that costs are appropriately allocated and that customers only contribute toward the services from which they benefi t.

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Explanation of the Schedules

Schedules

The service charge schedules are set out as follows;

ALL Services which benefit all occupiers

PROMOTIONS Promotions and marketing for the benefit of retail occupiers

REFUSE All tenants excluding Sainsbury’s, who have a separate contract to manage their own waste

ROMER HOUSE Services specific to occupiers of Romer House, a small office block located above the main entrance to the shopping centre


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Figures rounded to the nearest decimal point.

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£2,115,076

Actuals - OverviewYear Ending 31 March 2017

Total Actuals

Management and Insurance £413,536 19.6%

Utilities £245,848 11.6%

Soft Services £1,068,946 50.5%

Hard Services £328,929 15.6%

Income (£36,066) (1.7%)

Other Contributions £93,883 4.4%


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Service Charge Expenditure Schedule

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Actuals - Expenditure SummaryYear Ending 31 March 2017

Lewisham Shopping CentreService Charge Expenditure Schedule

Actual (£) Budget (£) Variance (£) Variance (%) Actual (£) 2016-2017 2016-2017 2016-2017 2016-2017 2015-2016Management Management Fees 119,868 119,868 0 0.0% 114,236

Site Management Resources 269,787 350,288 (80,501) (23.0%) 288,031

Health, Safety & Environmental 18,935 33,569 (14,634) (43.6%) 16,192

Management Sub-total 408,590 503,725 (95,135) (18.9%) 418,458 Utilities

Electricity 195,667 217,934 (22,267) (10.2%) 207,251

Gas 15,855 21,294 (5,439) (25.5%) 14,981

Water 34,326 38,000 (3,674) (9.7%) 32,555

Utilities Sub-total 245,848 277,228 (31,380) (11.3%) 254,788 Soft Services

Security 567,181 620,223 (53,042) (8.6%) 568,873

Cleaning & Environmental 421,907 419,875 2,032 0.5% 399,998

Marketing & Promotions 79,858 80,353 (494) (0.6%) 79,089

Soft Services Sub-total 1,068,946 1,120,451 (51,504) (4.6%) 1,047,959 Hard Services

Mechanical & Electrical Services 224,148 237,147 (12,999) (5.5%) 205,378

Lift & Escalators 15,177 20,604 (5,427) (26.3%) 19,891

Fabric Repairs & Maintenance 89,604 101,091 (11,487) (11.4%) 92,675

Hard Services Sub-total 328,929 358,842 (29,913) (8.3%) 317,944 Income

Income From Commercialisation (36,066) (34,621) (1,445) 4.2% (40,670)

Income Sub-total (36,066) (34,621) (1,445) 4.2% (40,670) Insurance

Engineering Insurance 4,946 4,922 24 0.5% 6,677

Insurance Sub-total 4,946 4,922 24 0.5% 6,677 Exceptional Expenditure

Major Works 98,374 110,000 (11,626) (10.6%) 89,881

Other Exceptional Items (4,491) 0 (4,491) 0.0% (4,361)

Exceptional Expenditure Sub-total 93,883 110,000 (16,117) (14.7%) 85,520 Total 2,115,076 2,340,547 (225,470) (9.6%) 2,090,677


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ROMER DEFINED TOTAL ALL PROMOTIONS REFUSE HOUSE UNITSManagement Management Fees 119,868 115,073 0 0 4,795 0 Management Fees 119,868 115,073 0 0 4,795 0Site Management Resources 269,787 267,195 0 0 2,593 0 Staff Costs 223,764 221,171 0 0 2,593 0 Site Offices/Accommodation 46,023 46,023 0 0 0 0Health, Safety & Environmental 18,935 18,401 0 0 534 0 Health & Safety 18,935 18,401 0 0 534 0Management Sub-Total 408,590 400,669 0 0 7,921 0 Utilities Electricity 195,667 193,586 0 0 2,081 0 Electricity Lighting 186,268 184,273 0 0 1,995 0 CRC Electricity 9,399 9,313 0 0 86 0Gas 15,855 12,804 0 0 3,051 0 Gas 14,754 11,867 0 0 2,887 0 CRC Gas 1,101 936 0 0 164 0Water 34,326 33,721 0 0 605 0 Water 34,326 33,721 0 0 605 0Utilities Sub-Total 245,848 240,111 0 0 5,737 0 Soft Services Security 567,181 567,181 0 0 0 0 Security 567,181 567,181 0 0 0 0Cleaning & Environmental 421,907 363,969 0 47,717 10,222 0 Cleaning 314,575 305,060 0 0 9,515 0 Waste Management 47,717 0 0 47,717 0 0 Housekeeping / Sundry Costs 23,458 22,752 0 0 707 0 Landscaping (External) 777 777 0 0 0 0 Seasonal Decorations 35,381 35,381 0 0 0 0Marketing & Promotions 79,858 0 79,858 0 0 0 Marketing/Promotions 79,858 0 79,858 0 0 0Soft Services Sub-Total 1,068,946 931,150 79,858 47,717 10,222 0

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ROMER DEFINED TOTAL ALL PROMOTIONS REFUSE HOUSE UNITSHard Services Mechanical & Electrical Services 224,148 212,167 0 0 11,981 0 Fire Precautions Maintenance 14,647 14,647 0 0 0 0 Fire Precautions Repairs 9,944 9,944 0 0 0 0 General Engineering Maintenance 122,596 110,975 0 0 11,621 0 General Engineering Repairs 31,960 31,960 0 0 0 0 Lighting/Electrical Maintenance 1,295 1,295 0 0 0 0 Lighting/Electrical Repairs 29,562 29,269 0 0 293 0 Heat/Air Con/Comfort Cooling Maintenance 12,592 12,592 0 0 0 0 Heat/Air Con/Comfort Cooling Repairs 1,552 1,486 0 0 66 0Lift & Escalators 15,177 13,196 0 0 1,981 0 Lift/Escalator Maintenance 10,867 8,886 0 0 1,981 0 Lift/Escalator Repairs 4,310 4,310 0 0 0 0Fabric Repairs & Maintenance 89,604 87,768 0 0 1,835 0 Internal Maintenance 45,985 44,503 0 0 1,482 0 External Maintenance 43,618 43,265 0 0 353 0Hard Services Sub-Total 328,929 313,132 0 0 15,797 0 Income Income From Commercialisation (36,066) (36,066) 0 0 0 0 Promotional Income (36,066) (36,066) 0 0 0 0Income Sub-Total (36,066) (36,066) 0 0 0 0



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ROMER DEFINED TOTAL ALL PROMOTIONS REFUSE HOUSE UNITSInsurance Engineering Insurance 4,946 4,394 0 0 552 0 Lift/Escalator Insurance 2,095 1,843 0 0 252 0 General Engineering Insurance/Inspection 2,851 2,552 0 0 300 0Insurance Sub-Total 4,946 4,394 0 0 552 0 Exceptional Expenditure Major Works 98,374 88,213 0 0 10,161 0 Plant Replacements 45,000 45,000 0 0 0 0 Major Building Works 53,374 43,213 0 0 10,161 0Other Exceptional Items (4,491) (4,491) 0 0 0 0 Other Income - S/c Offset (4,491) (4,491) 0 0 0 0Exceptional Expenditure Sub-Total 93,883 83,722 0 0 10,161 0 Total 2,115,076 1,937,112 79,858 47,717 50,389 0 Other Contributions Defined Unit Contributions 0 (99,387) (1,278) (763) 0 101,428Other Contributions Sub-Total 0 (99,387) (1,278) (763) 0 101,428 Grand Total 2,115,076 1,837,725 78,580 46,953 50,389 101,428



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Service Charge

Apportionment

Service Charge

ApportionmentLewisham Shopping Centre

Service Charge ApportionmentYear Ending 31 March 2017

Please note that this apportionment represents the position at 31 March 2017. Where there have been changes in apportionment or tenancies during the year then the fi gures shown are only indicative. Along with balancing invoices/credit notes, we have issued individual statements showing a full breakdown relevant to each tenant.

The following percentage multipliers apply: % WeightingFirst 10,764 sq ft 100%

Next 5,382 sq ft 80%

Next 10,764 sq ft 60%

Next 10,764 sq ft 50%

Next 10,764 sq ft 40%

Remainder 30%

FACTORS ACTUALS ROMER ROMER Address ALL PROMOTIONS REFUSE HOUSE ALL PROMOTIONS REFUSE HOUSE TOTALDefined Unit Contributions 99,387 1,278 763 101,428

Balance to Apportion 1,837,725 78,580 46,953 50,389 2,013,648

1 The Lewisham Centre 1,839 1,839 1,839 11,702 500 336 12,539

1a/2 The Lewisham Centre 2,467 2,467 2,467 15,698 671 451 16,821


3a The Lewisham Centre 1,450 1,450 1,450 9,227 395 265 9,886

4/4a The Lewisham Centre 3,419 3,419 3,419 21,756 930 625 23,312

40a The Lewisham Centre 2,555 2,555 2,555 16,258 695 467 17,421

40b The Lewisham Centre 4,874 4,874 4,874 31,015 1,326 891 33,232

40c The Lewisham Centre 5,549 5,549 5,549 35,310 1,510 1,015 37,834

40d The Lewisham Centre 11,897 11,897 11,897 75,704 3,237 2,175 81,117



8/9 The Lewisham Centre 4,027 4,027 4,027 25,625 1,096 736 27,457

53a The Lewisham Centre 888 888 888 5,651 242 162 6,055


11 The Lewisham Centre 14,268 14,268 14,268 90,792 3,882 2,609 97,283

11/12 The Boutique Hall The Lewisham Centre 194 194 194 1,234 53 35 1,323







17 The Lewisham Centre 4,246 4,246 4,246 27,019 1,155 776 28,950











33 Riverdale The Lewisham Centre 32,005 32,005 203,658 8,708 - 212,366

34 The Lewisham Centre 3,890 3,890 3,890 24,753 1,058 711 26,523


36/37 & Store 40e The Lewisham Centre 6,518 6,518 6,518 41,476 1,774 1,192 44,441





ROMER ALL PROMOTIONS REFUSE HOUSE TOTAL 1,937,112 79,858 47,717 50,389 2,115,076

Service Charge expenditure is apportioned according to gross internal floor area based on the ‘weighted floor area’ method.

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Service Charge

Apportionment

Service Charge

ApportionmentLewisham Shopping Centre

Service Charge ApportionmentYear Ending 31 March 2017

FACTORS ACTUALS ROMER ROMER Address ALL PROMOTIONS REFUSE HOUSE ALL PROMOTIONS REFUSE HOUSE TOTAL47 The Lewisham Centre 125 125 125 795 34 23 852


55 The Lewisham Centre 748 748 748 4,760 204 137 5,100












72a & Storage 16c The Lewisham Centre 1,522 1,522 1,522 9,685 414 278 10,377


140 High Street The Lewisham Centre 397 397 397 2,526 108 73 2,707

The Mall Kiosk & Storage 16B1 1,566 1,566 1,566 9,965 426 286 10,677

Store 3 The Lewisham Centre 1,863 1,863 1,863 11,855 507 341 12,702


Store 6 The Lewisham Centre 3,898 3,898 3,898 24,804 1,061 713 26,578

Unit 1 3rd Floor, Romer House 3,348 13,699 13,699

Unit 2 2nd Floor Romer House 3,348 13,699 13,699

Unit 3 1st Floor, Romer House 5,619 22,991 22,991

Store 5 The Lewisham Shopping Centre 619 619 619 3,939 168 113 4,221

Mid-Mall Kiosk South Mall, The Lewisham Centre 75 75 75 477 20 14 511

46/46a The Lewisham Centre 3,004 3,004 3,004 19,115 817 549 20,482

30-32 The Lewisham Centre 6,178 6,178 6,178 39,313 1,681 1,130 42,123

41A The Lewisham Centre 1,735 1,735 1,735 11,040 472 317 11,830

41B The Lewisham Centre 5,897 5,897 5,897 37,524 1,605 1,078 40,207

Mall site 8 North Mall 75 75 75 477 20 14 511

63a The Lewisham Centre 705 705 705 4,486 192 129 4,807

Store 16 - First Floor 752 752 752 4,785 205 138 5,127




63b The Lewisham Centre 345 345 345 2,195 94 63 2,352


Sub Total 288,800 288,800 256,795 12,315 1,837,725 78,580 46,953 50,389 2,013,648 Grand Total 288,800 288,800 256,795 12,315 1,937,112 79,858 47,717 50,389 2,115,076

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Service Charge Actuals

(10%) to (5%)

(5%) to 0%

0% to 5%

5% to 10%

Forecast (£)2016 - 2017

Actuals (£)2016 - 2017

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Summary of VariancesYear Ending 31 March 2017

£2,340,547

£2,115,076

% Variance against forecast

(9.6%)


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There are positive and negative variances contained within the summary schedule, the major fi nancial variances are explained.

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Site management resources (£80.5k)Underspend was due to changes in the Centre Management team which included the removal of costs for a Technical Services Manager, and the loss of our Operations Manager. There were also small underspends on office furniture and non-domestic rates.

Health, Safety and Environmental (£14.6k)Underspend was due to reduced H&S consultant costs and asbestos related works.

Electricity (£22.2k)Underspend was predominantly due to a fall in actual consumption against forecast. In addition to this the unit rate achieved by Landsec was lower than anticipated due to three factors: 1) Lower wholesale costs reflective of a falling wholesale market, 2) Lower distribution & network costs as confirmed by Ofgem and 3) Lower revised pass-through costs from EDF.

Gas (£5.4k)Underspend was due to a fall in actual consumption against forecast. A mild winter meant that the Centre’s boilers were not in such high demand.

Water (£3.7k)Underspend was predominantly due to a fall in actual consumption against forecast.

Management Utilities

Budget (£) Budget (£)

Actual (£)

Variance (£)

Actual (£)

Variance (£)

£503,725 £277,228

£408,590

(£95,135)

£245,848

(£31,380)


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Security (53.0k)Reduced costs because of the tendering process and new contract and small reductions across related security codes.

Mechanical & Electrical Services (£13.0k)Underspends to general engineering codes, less than anticipated spend to heating code and to mobile access equipment hire.

Lifts & Escalators (£5.5k)Underspend to the repairs element as some repairs fell under the main contract element.

Fabric Repairs & Maintenance (£11.5k)Underspend to both internal and external repair codes due to less than anticipated repair costs.

Soft Services Hard Services

Budget (£) Budget (£)

Actual (£)

Variance (£)

Actual (£)

Variance (£)

£1,120,451 £358,842

£1,068,946

(£51,504)

£328,929

(£29,913)


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Major Works (11.6k)Underspend to AMS codes as works were less than anticipated budget predictions.

Exceptional expenditure

Budget (£)

Actual (£)

Variance (£)

£110,000

£93,883

(£16,117)

Mall generated income (1.4k)Income rise as a result of outperformance in our mall promotional activities.

Income

Budget (£)

Actual (£)

Variance (£)

(£34,621)

(£36,066)

(£1,445)


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Contacts

Land Securities Group PLC100 Victoria Street, London SW1E 5JL

+44 (0)20 7413 9000

[email protected]

landsec.com

Publication No. 5865000-SC

E16/17

Paul ReddenCentre Manager

Landsec33a Lewisham Centre, London, SE13 7HBD/L: +44 (0)20 8852 0094Mobile: +44 (0)7808 908 053

[email protected]

Karen PriceProperty Accountant

Landsec100 Victoria Street, London, SW1E 5JLD/L: +44 (0)20 7024 5178

[email protected]

Documents

Service Charge Expenditure Report 2016-17 Lewisham ... Shopping... · outstation upgrades, ... is reduced as a result of any form ... expenditure - these allowances have been made