Member Article

Non-labour cuts do more to lift earnings

A Financial Times article on Tuesday 18th September 2012 entitled ‘Non-Labour Cuts do More to Lift Earnings’ reports that a 1% reduction on operating costs in the construction materials sector would boost turnover by 17% whilst in the chemical and retail sectors’ earning would rise by 11%.

The report also goes on to say that cutting jobs would make much smaller savings. I have reported previously on cost savings in property and emphasise the need to focus on these reductions and fixed costs rather than cutting labour as the best way of growing the business.

There are significant savings to be made. For example we have just negotiated a rent for a small retailer, reducing the landlords asking rent from £38,000 to £22,500 per annum. We have negotiated and referred to court a service discharge dispute which reduced the landlords claim from over £150,000 to £55,000. In both cases this will mean significant savings achieved each year for very little outlay and cost.

It is very concerning to find that a lot of occupiers totally ignore or wrongly assume that rent, service charge and other running costs in operating property cannot be challenged.

For more information, please ring Kevan Carrick or Thomas Conneely at JK Property Consultants on 0191 406 0038 to chat further.

This was posted in Bdaily's Members' News section by Kevan Carrick .