Better space utilisation could see property costs cut by 20%

Property performance measurement specialist Investment Property Databank has published its first occupier cost saving guide. There are no revelations here, just a valuable drawing together of extensive corporate experience.

"We hope that occupiers and their advisors will be able to understand more about where the search for any cost reductions might be concentrated as a result of reading the guide," says IPD director Christopher Hedley. "Boards should then be in a better position to judge the value for money they get from their office estates in line with business needs."

Starting from the fact that lower property costs may translate into competitive advantage, the IPD has examined expenditure on rent, rates and property operating costs. The result is an argument for moving out of London, where costs are about three times higher than in provincial centres.

Perhaps more realistically, this is also an argument for better space utilisation: more intensive occupation and flexible working techniques can both cut costs. For every saving of one square metre per person, the report says, the rent and rates bill can potentially be cut by 7-10%. Regional differences in operating costs (service charges, repairs, utilities, cleaning, security and insurance) are significant but not as pronounced.

Investment Property Databank can be contacted on 0171 482-5149.

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