This website uses cookies primarily for visitor analytics. Certain pages will ask you to fill in contact details to receive additional information. On these pages you have the option of having the site log your details for future visits. Indicating you want the site to remember your details will place a cookie on your device. To view our full cookie policy, please click here. You can also view it at any time by going to our Contact Us page.

Property costs key to efficient occupancy

10 December 2009

The fifth edition of the IPC Cost Code was launched last week as occupiers face a ‘new landscape’ in which reducing property occupancy is a priority.

Commenting on the publication of the latest update of the IPD cost Code last week, Christopher Headley, MD of IPD Occupiers outlined a ‘new landscape’ that occupiers face including shrinking their portfolios fast, an increased vacancy rate and surplus stock, and up to 30 percent default by sub tenants mainly through company liquidations.  Their businesses also need to be flexible to survive the economic downturn.
The average Total Occupancy Costs of an office builing account for 8-12 percent of an organisations total operating expenses.  The cost of rent represents almost one third of the TOC for most organisaitons. In the current economic circumstances these costs in the spotlight.  The Code provides RE and FMs with a standard terminology to accurate calculate and compare occupancy costs which is applicable globally.
He pointed out that lease lengths of over 20 years had reduced from 21.4 to just 3.5 percent (1992-2008) and those of up to 5 years have grown from 32.6 to 62.5 percent of the market.  He also observed that about one third of break clauses were exercised in 2008.
There had been a major change in attitude within business to retrench and refocus on core business strengths, and this has meant cutting headcounts, managing cash flow and running costs, moving to a shorter financial outlook, refocusing on CRE and FM functions.  There was a recognition that this was a time for change, he said.
The Code which was first launched in 1999 is now in its 5th edition. Changes incorporated in this edition include making a clearer distinction between annual OPEX and annualized CAPEX and a new cost measure to capture IT costs.  This covers infrastructure – cabling, connectivity, etc; hardware – phones, PCs, laptops, etc; software – operating systems, user software, etc;  and support- employment, contractor costs, etc.  There are also three useful case studies from OGC, AXA Group and Centrica and new worked example.


Contact Details and Archive...

Print this page | E-mail this page

https://www.fsifm.com
https://cleaningshow.co.uk/london


MOST VIEWED...

View more articles
Article image

Why the Law Says You Need a Nappy Bin Disposal Service

At home, parents are used to disposing of their babies’ used nappies the same way they do any other domestic waste - bagging it up and sticking it in the r...
Article image

Chris Jarvis appointed as MD for JR&Co

Julius Rutherfoord & Co (JR&Co) are delighted to announce the appointment of Chris Jarvis to the role of Managing Director....
Article image

Meeting the needs of the post-pandemic working environment

Changes driven by the impact of the Covid-19 pandemic is requiring software developers to update their offerings to meet the demands in the changing workpl...
Article image

Rinnai opens new office at The Building Centre in the heart of London

Rinnai, leader in low carbon hot water heating units and systems, is opening a new office and permanent exhibition in the renowned Building Centre in the h...
Article image

Extended service offering results from purchase of Cooltech

Ecoserv has announced it has purchased the Cooltech Environmental Engineering business in a deal worth £3.5m....
Article image

Property company enters administration with £1.4m debt

Despite receiving government support during the Coronavirus pandemic, property management company ARPM has gone into administration, it was reported earlie...
https://www.uhubglobal.com/
http://edition.pagesuite-professional.co.uk/Launch.aspx?PBID=78915b1c-0f11-4b5e-9468-ba601ad89761