Service Charge – Access equipment
Published: 25 July, 2012
Access – but how, and at what cost?
It’s the question that centre and asset managers are apparently asking themselves more frequently when it comes to the costs of purchasing and operating access equipment in the nation’s retail and mixed-used destinations.
Access equipment costs within a shopping centre usually doesn’t seem to be as great a bone of contention between landlords and tenants as it might be for other operational categories covered under the RICS’s updated Service Charge Code which was issued late last year.
"This is a service charge element that seems to be more non-contentious than contentious," says service charge expert John Gray of John Gray Service Charges. "It is very much the case that one size does not fit all when it comes to equipment – especially as some of the heights they need to reach in some centres can differ vastly."
Gill Buchanan, centre manager at Swan Walk shopping centre in Horsham, which is managed by Jones Lang LaSalle on behalf of owners Aviva Life & Pensions says that the 327,000-sq ft centre, which has extensive glazed roof areas and three atriums, only really uses major access machinery for the Christmas decoration installation and the annual overhead clean.
"Both projects are outsourced as part of three-year contracts and are not handled by the maintenance team of two on site," Buchanan explains. "This puts the responsibility of managing the risk and staff training and certification with the contractors and minimises the support hours by centre staff required. RAMS (Reliability, Availability, Maintainability & Safety) documentation is obviously provided by all contractors prior to the start of any works and is fully checked on site, but no onsite staff are required to be trained and certified for the machine use."
Swan Walk owns one Simon Gofer which is nearly 20 years old and is used for day-to-day medium level works such as changing lamps. The machine is maintained at a low cost through the service charge and the onsite maintenance and cleaning teams are trained and certified to use the equipment.
"The Gofer has been a very cost effective machine with little impact on the service charge for many years and ensures that we are able to quickly react on site, maintaining our high standards of cleaning and maintenance at all times," Buchanan says. "Leasing equipment to fulfil such a role would not be cost-effective and would cause delays in tackling issues which are difficult to timetable."
The centre is anchored by M&S, Bhs, Boots and Wilkinsons and is single-storey despite the volume of high level glazing. Buchanan says that they are mindful of costs and value for the service charge as the centre, although single-storey to shoppers, has a disproportionate amount of high level glazing and roof areas (above offices) that need maintaining.
"This creates a challenge when looking at service charge costs so work is carefully programmed and linked wherever possible to drive value for tenants at all times," she says.
Gray says that retailers recognise, for the most part, that specialist equipment is needed to access spaces within centres. However he says the big costs will still attract comment and that centres need to think seriously before the purchase of a major bit of new kit.
However it isn’t so much the service charge cost impact that may be encouraging some centre owners and managers to consider whether to buy or to rent equipment or to look to other alternatives including equipment sharing. Rather it’s the regulatory paperwork that comes with ownership. Owning access equipment is one thing but some centre managers increasingly believe that the requisite health & safety and process documentation associated with the equipment can add a whole other level of financial and time costs. Hence a propensity to examine leasing or renting options. And while few have seemingly explored the option the general economic situation may drive more equipment sharing not just within portfolio holdings but, potentially, even between building owners.
"Leasing avoids heavy maintenance bills, but can be an expensive way of acquiring the asset," says Gray. "So maybe if this can be done in cooperation between neighbouring schemes it could make a lot of financial sense. However, diplomacy needs to be resolved as to who has most use of it and when. With the excessive heights, where specific periodic needs require those heights be reached then it is obviously more cost-effective to hire in on a short term basis than buy or lease one and have it sitting in a yard for 11 months of the year when you only need them to hang your Christmas decorations or change the odd light bulb. It ultimately depends on the centre’s operational requirements."
The issues are well noted by Urban Access, UK specialist in the sales, leasing, long term renting, on-site servicing and IPAF training of both new and pre-owned or end of lease-hire powered access equipment. In particular, the company deals with the narrow width spider type access platforms and track mounted access platforms used by many large office buildings, residential facilities and shopping centres with large atriums, complex internal structures to navigate around and high external facades, the majority located in hard-to-reach areas, often with the added complication of sensitive flooring considerations.
The company is the UK partner for TCA Lift Falcon Spiderlifts (Previously Falck Schmidt Spiderlifts) of Denmark, a long-standing company globally known for its range of high quality telescopic and articulated boom type, narrow width, lightweight and ultra-compact spider lift access platform systems with a unique double articulating Fly-Jib design.
"We have been extremely busy over the last few years working closely with architects, facilities management companies and shopping centre maintenance managers looking to add extra value to their businesses and operations," says Neil Wilkinson, managing director for Urban Access, the Dorset-based company. "Over the last five years we are seeing more and more shopping centres purchasing and long term leasing our Falcon spiderlift products due to the long life span of this type of machine, the high cost of ‘spot hiring’ equipment and probably most importantly, the effect of the HSE Working at Height Regulations introduced back in 2006, whereby owning equipment designed and supplied specifically for individual applications is inherently going to be more cost effective and more importantly, safer for the operators tasked by their employers to clean and maintain their facilities."
Wilkinson believes centre managers and owners really need to weigh up the odds before just renting in items. With working heights of now up to 52 metres and extensive outreach characteristics of up to 17 metres with machines such as the Falcon Spider FS320Z, TCA Lift are currently producing some the world’s highest working and largest outreach articulating Spider lifts available in the market.
"If required on a frequent basis for short term ‘spot hire’ type rental, this can prove to be an expensive exercise for all types of powered access equipment," Wilkinson says.
The Westfield Shoppingtowns approach to access equipment is to match equipment to the situational requirement, according to the company. Ultimately, however, the company prefers to keep management control of its equipment.
"Westfield is focused on keeping costs to a minimum and sources the best value access equipment," says a spokeswoman. "Generally this equipment is purchased, or rented as needed if exceptional pieces of equipment are required. Maintenance contracts are also taken out on equipment to ensure it is kept in good working order and to maintain any warranties. Westfield has not looked to share access equipment with any other parties that are not on site.
"In regards to Christmas decorations, partners are selected through a tender process for design, installation, storage and refurbishment," the spokeswoman adds. "In most cases, Westfield will allow a professional contractor to use its own equipment for the installation and dismantle of Christmas decorations or use the centre’s equipment to minimise costs."
"Overall centre management teams seem to be on top of the situation generally, and most are capable of achieving a bespoke solution to their bespoke requirements, in a reasonable and cost efficient manner," assesses John Gray. "I certainly cannot recall having too many issues with excessive costs in the respect of access equipment over my years as a service charge consultant."