Landlords need to interact on green issues and service charges, say occupiers
Occupiers are still least satisfied with landlords’ service charge arrangements and interaction with them on green issues, according to the latest Occupier Satisfaction Survey.
The report, from the Property Industry Alliance and the UK chapter of CoreNet Global, shows an overall occupier satisfaction score of 5.4 out of 10, up from 4.9 last year. But the satisfaction level with landlords’ service charge arrangements was 4.3 (4.2 last year) and occupiers rated landlords’ interaction on sustainability at just 4.0 – the lowest rating of all categories in the survey. Although this last figure is up from 3.5 the previous year, it clearly remains an area of importance to occupiers on which landlords still have to make considerable progress in terms of interaction with occupiers. More than 77% of the occupiers surveyed said a minority or none of their landlords had contacted them during the past year about energy saving plans, EPCs, DECs or the CRC scheme.
Of the occupiers surveyed, 56% said that all or a majority of their landlords had provided a service charge budget, while 19% said this was the case for about half of landlords and 24% said a minority or none of their landlords had done this. A total of 71% of occupiers surveyed had challenged a service charge account during the past 12 months.
Retail occupiers, with a score of 5.2 (5.1 last year), and office occupiers, with a 5.6 rating (5.2), were more satisfied than their counterparts in industrial properties, which had a score of 4.9 (4.6). The gap between large occupiers and SMEs narrowed, with large occupiers recording a score of 5.4 (5.3) and SMEs 5.0 (4.2).
Occupiers gave high marks for their satisfaction levels with regard to the rent review terms and conditions achieved through lease negotiations with their landlords, at 6.2 (5.8), and the leasing process itself, also at 6.2 (5.5) out of 10. They also awarded a satisfaction rating of 6.2 (5.3) for the process of handing a property back to the landlord.
Landlords scored 5.3 (4.7) for the level of their communications. A majority of occupiers (57%) said that contact levels with their landlords were about right, which was the same as last year, while 33% said contact was not frequent enough – a large improvement year-on-year. The survey showed that 26% of occupiers had contact with their landlord less than once every 12 months, 29% once every 6-12 months, 27% once every 3-6 months, and 15% on a weekly or monthly basis.
Landlords scored 5.3 for their insurance arrangements (up from 4.9) and also for the application for consent process (up from 4.0). They were awarded 5.2 (4.6) for dilapidations claims negotiations over the past 12 months. Satisfaction levels regarding the rent review process fell to 5.1 from 5.4 last year.
