TOCS research

The Total Office Cost Survey (TOCS) by Actium Consult Ltd provides an independent and accurate guide to the total cost of occupying a brand new office building in 50 locations across the UK. The survey covers 22 different cost heads including rent and rates, annualised cost of fit out and furniture, hard FM, soft FM and management based on the latest data provided by the foremost advisors and suppliers. It is recognised as the industry standard and is widely used by occupiers and suppliers to benchmark their costs and prices.

To demonstrate the cost effectiveness of the Portal solution, Portal instructed industry authority Actium Consult to carry out a detailed benchmark cost analysis against the industry standard workstation.

Actium’s research revealed that the costs in all the examples considered of Portal’s workstations were lower than the equivalent TOCS standard. Furthermore they stated that their solution offers a high level of service at a competitive pre-agreed cost, saving the client the time and effort required to procure and then manage the service delivery. The fact that they also carry out the fit out has an added advantage, giving the client a one-stop-shop. They concluded that no solution fits everyone but, in their opinion, for those occupiers requiring a rapid bespoke accommodation solution, the Portal offering is certainly one to consider closely.

Actium Consult was engaged to:

• Make a total cost comparison between Portal workstation costs per annum and the workstation costs reported in TOCS 2009
• Make a detailed comparison between all TOCS expenditure heads and output definitions with the Portal total service offer in each location
• Assume that the relevant date for the cost comparison is 1 March 2009 which is the data point for TOCS 2009
• Focus on TOCS evidence based on Nottingham, Sheffield and Maidstone locations for Portal’s facilities at Nottingham, Rotherham and Chatham respectively, herein referred to as the TOCS standard cost
• Make a locational adjustment for the assessment of rent and rates, herein referred to as the TOCS adjusted cost
• Provide commentary on any major differences between TOCS assumptions and the Portal service offering
• Make a physical inspection of Chatham and carry out a desk based review of the plans and specifications of Nottingham and Rotherham to ensure that quality of fit-out was factored in Actium’s findings

The specific findings relating to each location are detailed further on but on a more general basis Portal provides managed office and call-centre buildings with the following characteristics:

• There is a one-stop-shop for space, fit out and facilities management providing a bespoke, turnkey solution
• The cost certainty of a pre-agreed workstation charge per month
• Flexibility in the number of workstations and (where the building allows) in the space to be taken to accommodate business changes
• A high level of service (no material claims since their inception in 2000)
• Rapid deployment

Given the above features, which individually are often used by suppliers to increase prices, we would reasonably have expected the cost of Portal workstations to be above the TOCS standard costs, especially since the recent falls in rent levels, which came after the deals had been agreed. It is therefore noteworthy that the cost of Portal workstations are in all the examples lower than the standard TOCS workstation.

Portal appears to perform beyond the stated service level and is very responsive to the occupiers’ needs.

What did Actium say about Portal at Nottingham?

At 52,000 sq ft the Sherwood building is a similar size to the TOCS building and was built to order in a very short time. Additionally, within the 52,000 sq ft facility delivered to the client, the original request was for a 5,000 sq ft Data Centre. When the centre then doubled in size, Portal’s input into the design meant that the workstation density could be increased accordingly, allowing the centre’s activity to continue as before.

Despite the upward pressure on price brought about by the benefits of a short initial agreement with no exit costs, a building built to order and a pre-agreed price per workstation, the client has obtained a fully managed facility at less than the TOCS rate.

The Portal workstation cost of £336 is well below the TOCS standard workstation cost of £371 per workstation pcm, as well as the TOCS adjusted figure of £357 based upon equal density of occupation.

It is interesting to note that the client has chosen to remain after the initial commitment for 5 years, under pre-agreed flexible terms.

What did Actium say about Portal at Rotherham?

Portal initially took the whole building and allowed the client to expand. The risk taken by Portal and the cost of holding the extra space until needed is reflected to some extent in the overall cost. The ability to expand within the same building, but to retain an agreed workstation price, has been very valuable to the occupier and has been achieved at an overall price very similar to the price of workstations in an average building.

The Portal workstation cost of £351 pcm is well below the TOCS standard cost of £449 (based on equivalent services), but is above the TOCS adjusted cost based on an equivalent density of occupation.

What did Actium say about Portal at Chatham?

By delivering a better fit of space to the requirement for workstations, plus a term that was shorter and more in keeping with the client’s business horizon, Portal were able to reduce the client’s exposure to property to 53% of what it would otherwise have been. Notwithstanding this, the Portal workstation cost of £401 per annum is well below the TOCS standard cost of £442 but is above the TOCS adjusted cost.

It should also be noted that there has been downward pressure on rents since the lease was taken and the agreement made in April 2008; if rents at the time are used, the results compare more favourably.