Owners want to see total occupation costs, which include the service charge, to be more competitive to attract retailers and to reduce their non-recoverable liability. So how do we reduce costs, but raise service levels?

Typically, with operational costs accounting for some 60 per cent of the service charge, this is often seen as an easy win. FM can basically go two ways. You can focus on cost reduction eating into service quality and reducing customer satisfaction and supplier profits, or on real value-added services to retailers.

Traditionally, it has been acceptable to procure services locally or nationally, where possible, to achieve economies of scale. But is this the best way to achieve the savings and standards now expected?

We have all seen for ourselves the fantastic service levels they have in America, compared to far lower standards here. An interesting service model which is gaining momentum across the market is the Total Facilities Support concept. It goes a step further than the traditional outsourcing contract and enhances service delivery, controls service charges and creates new revenue streams not seen before. It offers services direct to retailers and local businesses at a competitive price. In this way, total profit does not have to come from just the centre. Interestingly, an inclusive rent and service charge package is offered with RPI increases.

Centre managers should look at the competition and not simply think what they do is the best, just because it works. The successful managers of the future will be those able to adapt and deliver the services and additional income required to make a successful centre for everybody.

Don Lemen,

Partner, Donaldsons

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