Property Management Checklist - British Retail Consortium

Property ManagementChecklistProperty costs can account for anywhere between 10 and 40 percent of aretailer’s fixed costs, which is often second only to a company’s wages bill.However, for many small retailers, property costs can be their greatest expense.Property costs are made up of a number of different elements. Theseinclude rent, service charge and utility bills. With a few simple managementimprovements, it is possible to achieve savings in all these areas. The greatestsavings can often be achieved in service charges. By actively engaging with yourlandlord you can begin to ensure you are receiving value for money and efficiencyfor your service charge contribution. In difficult economic times it is in theinterest of all parties to make savings where possible. If you haven’t already doneso, now is an ideal time to begin that process with your landlord.While improving your understanding of how efficiently your service charges arebeing managed we hope you will also consider the value for money that can beachieved in other property cost areas. This booklet is designed to help you alongthat journey.British Retail Consortium, 21 Dartmouth Street, London, SW1H 9BP020 7854 8900. info@brc.org.uk. www.brc.org.uk.

There are some basic steps every retailer should take in order to manage andmaintain a strong and efficient property portfolio. Many of these steps areset out in this simple guidance booklet. It will enable you to begin an effectivedialogue with your landlord or their management agent about the services youpay for and receive. This should assist you to assess whether you are receivingvalue for money across a number of property management areas. As a result, youshould feel more comfortable when talking to your landlord or a managementagent about your concerns.Beyond this booklet there are a number of documents that can guide you ingreater detail through specific property management issues These include:••The Lease Code of Practice. This document promotes fairness in commercialleases and provides occupiers with tools and information to enable them tonegotiate the most appropriate deal possible at the time.The Service Charge Code of Practice. This document sets out best practicefor service charge management and what you should expect from yourlandlord or their management agent in relation to service charges.These documents can be found at the following websites:http://www.servicechargecode.co.uk/http://www.leasingbusinesspremises.co.uk/If you are unsure about any issue of concern relating to your landlord,prospective landlord or a managing agent then please seek professionaladvice.Rents•••Ask for monthly rents (at rent review and lease renewal). If you don’t askyou don’t get.Don’t agree to additional charges to move to monthly rents.You are entitled to receive a VAT invoice for rent. If you aren’t receivingone, then speak to your landlord or managing agent. If you have furtherconcerns speak to HM Revenue and Customs.British Retail Consortium, 21 Dartmouth Street, London, SW1H 9BP020 7854 8900. info@brc.org.uk. www.brc.org.uk.

Service Charges•••••••••••••••Service charges operate on a not for profit/not for loss basis.Ensure your service charge covers only the service provided and nothingmore.Check that the service charge bill represents what was agreed under thelease.Is your service charge the correct percentage for the shop space in thecentre/building?Don’t contribute to the service charge for a food court, unless you’reoperating in it.Question and challenge your service charge bill.Insist on having sufficient details to understand your bill and what you arecontributing to.Work with the landlord/agent to understand the bill and iron out anydiscrepancies.Ensure the management fees are transparent (operated on a not forprofit/not for loss basis).Ensure your bill and the relationship you have with your landlord/agent iscompliant with the Service Charge Code of Practice.Examine whether the tendering process in the centre/building is asefficient and cost effective as it could/should be.Procurement practices should maximise value for money.While there will be commission on insurance, make sure it is reasonable.Don’t agree service charges as rent.You shouldn’t be covering refurbishment costs in the last five years ofyour lease.Green/Energy use issues• Encourage the landlord to install sub-metering (you can’t reduce what youcan’t measure).• Encourage the landlord to set up a working group, made up of thelandlord and a representative from each tenant, to address environmentalperformance in the building.• Develop an action plan for the centre/building which both tenants and thelandlord are signed up to.• Landlords should invest in improvements to the building, tenants shouldhelp cover the costs of maintenance.British Retail Consortium, 21 Dartmouth Street, London, SW1H 9BP020 7854 8900. info@brc.org.uk. www.brc.org.uk.

British Retail Consortium andPropertyThe British Retail Consortium (BRC) is the lead trade association for the UKretail sector and the authoritative voice of the industry to policy makers and themedia.The BRC has been a dominant voice on retail-specific property issues for manyyears. Our successful Rent Monthly campaign has doubled the number ofretailers on monthly rental terms in four years. The BRC has also been at theforefront of an industry-wide initiative that aims to address simple, value-formoneymeasures relating to service charges. The Ten Point Plan (which sets outsimple steps towards achieving savings on service charges) has been adopted byleading landlords and agents and accomplished significant savings in centres upand down the UK. However, more can still be achieved.Retail is one of the UK’s success stories but currently faces a challenging tradingand regulatory environment. This booklet is one of the BRC’s many contributionsto ensuring retailers thrive and maintain their outstanding record.For further information about the BRC’s property policy work, please contactBeth Hinde, Property, Energy and Transport Policy Advisor, 020 7854 8942,elizabeth.hinde@brc.org.uk. www.brc.org.uk.British Retail Consortium, 21 Dartmouth Street, London, SW1H 9BP020 7854 8900. info@brc.org.uk. www.brc.org.uk.