29 Jan 19 by Anna Simpson
The cost of utilities in commercial properties will vary greatly from property to property and user to user so are often hard to compare, however there are some points to consider when trying to compare costs of different properties.
Are the utilities separately metered or included under the service charge? If they are separately metered then the tenant will be responsible for the contracts and bills directly, if they are covered under the service charge you will be paying for a proportion of the charge to the whole building. It is entirely possible that one utility might be separately metered e.g. each tenant having their own electricity supply, and one might be under the service charge e.g. one water supply to the whole building. If you are comparing property costs make sure that you are comparing them on a like for like basis – is the service charge higher on one than another because utilities are included? But could it work out cheaper overall?
Can you give me an estimate of how much the utilities will be for budgeting purposes? Unless they are covered under the service charge then no, not usually. The cost is so dependent on the supplier and tenant use, it is hard to estimate. For example, one tenant might use the unit for storage and only have the lights on for a few hours each week whereas the next tenant might be using heavy machinery in the unit from 6am – 8pm every day so the bill would vary immensely.
Benefits of having separately metered utilities – you can select your own suppliers to make sure you are getting the very best deal. Cost is normally use dependent (so if you use less energy you pay less). If under the service charge other tenant use more energy than you, you could end up paying more.
Benefits of utilities being covered under the service charge – no need to worry about managing different energy suppliers/bills. Can work out cheaper as standing charges are split between tenants. You might be able to get a better deal from a supplier because more energy is being used.