An ongoing discussion between large retailers and the UK’s biggest landlords (members of the British Property Federation) has surfaced because retailers object to paying rents quarterly in advance saying this causes them cash flow issues. Responding, the BPF landlords ran a pilot scheme in four shopping centres to reduce overheads through service charges by delaying maintenance projects and ”and by mutually identifying changes to service requirements.”
This is very interesting because it’s been historically the landlord who sets out the level of ‘services’ that tenants receive in a shared occupancy building.
What if the tenants were able to choose the level of service they wanted in future – for example, weekly cleaning rather than daily or increased security cameras / guards near their stores. A menu-driven approach would mean that the days of one-size-fits-all may end and a more flexible service could be delivered enabling retailers to pick and choose from a range of services to suit their particular needs.
the areas where the cost review is focusing its attention include:
- Engagement with retailers
Hours of operation
Cleaning and environment
Administration, procurement and purchasing of services
Plant and fabric maintenance
Utilities and energy management