Estate Benchmarking Survey

Estate Benchmarking Survey
 
Expenditure Proportion Remains Constant

23 November 2015, by Ian Bailey

Commercial and leisure incomes can make an important contribution across the estate.

 

Total expenditure on ‘All Estates’ increased by 3.9% during 2015 to £95 per acre, amounting to 43% of gross income. This was at a higher rate than the annualised growth of 2.5% recorded over the past three years but significantly below the increase in gross income highlighted on Diversity Delivers Steady Performance. Property repairs and management costs represent over three quarters of total costs and almost a third of gross income. However, the remaining individual costs should not be ignored as they amount to 25% of costs.

Property repairs

The largest cost on ‘All Estates’ is property repairs which amounts to almost half of all expenditure and a fifth of gross income. Property repairs increased by 9.2% to £46 per acre and were a significant factor in the overall cost rise. Property repairs tend to vary from year-to-year for individual estates depending on repair requirements and major refurbishments when properties become vacant.

The five-year rolling average, to iron out the annual variability, shows that property costs have increased steadily by an annualised 4.5% per year over the past 10 years, although the rate of growth has slowed during the past three.

Management and professional fees

Average management costs across ‘All Estates’ increased by 3.2% in 2015 to £27 per acre, representing 28% of all costs and 12% of gross income. Since 2000, the annualised growth in management costs has been slightly higher than for property repairs and ahead of inflation at 5%, although the rate of growth has slowed over the past few years.

Management costs represent the annual cost of general estate management including the cost of running the estate office and do not include one-off professional fees which might include a strategic business or property maintenance review. These ‘other professional’ fees amounted to £5.35 per acre and 2% of gross income in 2015.

Legal fees on ‘All Estates’ amounted to £3.88 per acre in 2015, similar to the past two years.

 

 
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Key Contacts

Ian Bailey

Ian Bailey

Director
Rural Research

Savills Margaret Street

+44 (0) 207 299 3099

 

Sophie Tidy

Sophie Tidy

Director MRICS, FAAV
Estate Management

Savills Oxford

+44 (0) 1865 269 162

 

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