Satisfaction levels amongst commercial tenants has remained static despite the economic downturn as costs become a priority and service charges come under further criticism, according to the 2009 UK Occupier Satisfaction Index (OSI).
Satisfaction levels amongst commercial tenants has remained static despite the economic downturn as costs become a priority and service charges come under further criticism, according to the 2009 UK Occupier Satisfaction Index (OSI).
The latest report reveals that the overall UK Occupier Satisfaction Index remained unchanged with a score of 57 out of a possible 100. Although this stabilising of the index indicates that the recession has not yet dented overall satisfaction levels, it is clear that costs are the main concern and occupiers are looking to landlords to share this burden.
The number of occupiers satisfied with value for money in the UK property industry declined, with many feeling that property costs are too high in the UK. Some 35% of respondents were dissatisfied, up from 27% in 2008.
In particular only 10% of respondents felt that service charges were value for money, whilst 50% considered them to be poor value, and the clear message was that a greater emphasis was needed on reducing costs, greater transparency and more consultation.
One upturn of the recession is that landlord flexibility has seen an improvement. In particular current market conditions are forcing a more flexible approach to leasing with satisfaction levels in the length of leases and the ability to break them up 7% to 38%; however some still feel that property owners are not responding quickly enough to the market.
This year’s results showed a steady improvement in the landlord tenant relationship, with the larger property owners leading the way. Some 48% of respondents rated the levels of service provided by property professionals highly.
The report indicates that landlords are gradually getting better at communicating and responding, but the property industry still has a long way to catch up with other service industries. However, small businesses and small retailers in particular are the least satisfied.
John Story, Chairman of the OSI Steering Group, commented: 'This year's occupation satisfaction index shows no improvement in overall satisfaction levels, but there is no decline either. In a way this is good news as it shows stability, despite the turmoil of the recession.
'However, certain areas still have a long way to go, in particular satisfaction with landlords and service charges is still extremely low. Also consciousness about costs and value for money comes out very strongly in the report. Many of the larger landlords are making some considerable progress in providing better services, which is encouraging. On the other hand smaller organisations seem to be the least satisfied with their service, so there is definitely a lot more work to be done to improve satisfaction in the sector."
The Occupiers Satisfaction Index investigates the level of satisfaction based on 231 interviews with UK-based property occupiers in the UK commercial property industry and explores occupiers’ perceptions of the service provided by property owners, property developers, property/facilities managers and by professional advisors and leasing agents.
The Property Industry Alliance was formed in April 2007 and comprises the Royal Institution of Chartered Surveyors, the British Property Federation, the Investment Property Forum and the British Council for Offices. Its purpose is to provide a cross-industry view on a range of issues and to ensure that, where feasible, the industry speaks with one voice in its relations with external stakeholders.
The UK Chapter of CoreNet Global, the association for the corporate real estate industry and its related professionals, is the third largest Chapter worldwide and comprises approximately 45% end-user members.
