Returning to Distribution Centre Service Charges

Returning to Distribution Centre Service Charges

We recently completed a benchmarking exercise as part of our Spotlight on Distribution Centres.

This provided details on comparatives rates in £spf for service charge and insurance.

Since then, we were asked to provide some guidance on a clients proposed new acquisition and we quizzed the high rates in £psf.  The Landlords advisors pointed out that many distribution parks apportion their service charges by reference to acreage and plot size.  Highlighting the fact that some plots are not fully developed and this can inflate the £psf (based on building area as opposed to plot size), so our comparison was worthless.

As a result, we undertook further research to establish the relevant rates per acre.  The typical group of sites had a range of between £1,250 to £3,600 per acre, with an average of £2,150 per acre.

So, returning to our query on the excessive charges based on £psf, whilst our analysis had been questionable, our general view was found to be correct but now with better stats.  On plot size, the proposed service charge equated to £4,420/acre, more than double the average.

To refer to our earlier analysis, Spotlight on Distribution Centres – Click here, and to review a recent case study where our intervention secured a £130,000 reduction in Insurance Premium for a large distribution centre – Click here.

To find out how we can help drive down your occupancy costs, contact us here.

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