Efficiency Unleashed: How Assure Index Supports Shopping Centre Budget Reduction

Efficiency Unleashed:
How Assure Index Supports Shopping Centre Budget Reduction

Discover how the Assure Index helped us reduce a shopping centre service charge budget by £283,000. 

In this case study, Harrison Gray, Associate, explores our analysis of a city centre shopping centre’s expenses per square foot.  By pinpointing areas where the budget exceeded the average, we took prompt action to rectify these variances, resulting in significant cost savings for our clients.


Identifying Discrepancies:

Upon receipt of the service charge budget for the year ending December 2021, it became evident that the cost per square foot of this city centre shopping centre was notably higher than other similar shopping centres.  To conduct a comprehensive comparison, the Assure Index for Shopping Centres was employed, providing median costs per square foot.  Based on this analysis, the shopping centre in question was categorised as a Tier 1 facility, alongside the top 300 Shopping Centres in 2021.

Challenging Budget Headings:

With the shopping centre’s Tier 1 classification in mind, a granular examination of the individual budget cost headings commenced.  By benchmarking against the Assure Index, it was revealed that several budget headings exceeded the median costs of similar shopping centres. Notably, the areas of concern included Site Management Resources, Security, and M&E (Mechanical & Electrical) services.

Engaging with the Managing Agent:

To address the discrepancies and seek potential cost reduction strategies, the managing agent responsible for the shopping centre was engaged in a series of discussions.  The agent was queried regarding the reasons for the higher budget costs compared to similar shopping centres, and potential avenues for reducing these expenses were explored.

Cost Reduction and Service Charge Reconciliation:

Following extensive exchanges with the managing agent, the service charge was reconciled, and a reconciliation pack was received in April 2023.  As a result of these efforts, there was a notable reduction in all the queried budget headings, ultimately resulting in an overall budget reduction of £283,000,  benefiting 13 occupiers that Assure act for in this centre.  The diligent investigation and collaboration between Assure and the managing agent played a pivotal role in achieving these positive outcomes.

Addressing December 2022 Service Charge Budget:

Encouraged by the success achieved in reducing costs for the 2021 service charge budget, similar queries were raised against the December 2022 service charge budget.  Building on the lessons learned and experiences gained, Assure undertook a thorough review of the budget headings and engaged in renewed discussions with the managing agent to identify opportunities for further cost reductions.

This case study showcases the importance of diligent budget analysis, benchmarking, and collaborative efforts in achieving cost reductions.  By leveraging the Assure Index and engaging with the managing agent, Assure successfully identified and rectified higher-than-median budget costs, resulting in a notable £283,000 reduction. The learnings from this case study provide valuable insights for other occupiers seeking to optimise their service charge budgets and improve overall cost efficiency.

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