ServiceCharges: Office tenants pay a high premium for space in air conditioned buildings, according to the first comprehensive survey here of building service charges.

Air conditioned space is typically 28 per cent dearer than non-air conditioned space on average.

Agent Jones Lang LaSalle conducted the survey, which provides comprehensive details of the charges applied to tenants in the Irish property market. It includes information from the cost of power, security and cleaning to the cost of lift/escalators and car-parks.

The critique looks at charges according to the size, location and age of office buildings. It also compares charges as applied in Dublin versus the UK and gives service charge trends here over the past 20 years.

"By analysing average service charge levels in detail we are provided with greater levels of transparency in relation to costs incurred in the management of buildings," the report states.

All prices provided are exclusive of Vat. Key findings include that the average service charge level in Dublin is €59.24 per sq m (€5.5 per sq ft).

The most expensive components of this on average are cleaning at €10.19 per sq m (€0.95 per sq ft) and security at €10.18 per sq m (€0.95 per sq ft).

The average service charge level for buildings with air conditioning is €67.58 per sq m (€6.28 per sq ft), 14 per cent higher than the Dublin average. The highest costs in these buildings on average are power and light (€12.05 per sq m or €1.12 per sq ft), security (€11.69 per sq m or €1.09 per sq ft) and heating and air conditioning (€11.35 per sq m or €1.05 per sq ft).

Buildings without air conditioning have an average service charge of €52.73 per sq m (€4.9 per sq ft), the report found, 11 per cent lower than the Dublin average. Perhaps not surprisingly given more stringent building insulation codes, the report discovered that older air conditioned buildings on average had charges more than twice as high as modern non-air conditioned buildings. It also found that average service charges increased by 36 per cent between 1999 and 2004. The Jones Lang LaSalle team found that the increase from €43.55 per sq m (€4.05 per sq ft) to €59.24 per sq m (€5.5 per sq ft) was primarily a result of a rise in cleaning, security and power and light costs.

Despite this rise, the report found that charges as applied in Dublin are considerably less than the UK average. Service charge costs on average there were €75.25 per sq m (€7 per sq ft). Charges here were 21 per cent lower at €59.24 per sq m €5.5 per sq ft). The donkey work to put together the report was done by the company's research department in conjunction with its property management department.

The findings have prompted a call from the company for a new approach to the application of service charges. The main aim of the charges is to strike a balance between landlord and tenant requirements.

"In response to changing tenants' requirements certain types of property have become more complex in recent years and therefore a modern service charge may cater for the recovery of a wide range of services," the report states.

The study was based on audited service charge accounts for 42 of the office buildings in Dublin currently managed by Jones Lang LaSalle. It looks in particular at multi-tenanted buildings constructed between 1969 and 2002, with the average age of 16 for the sample group studied.

These buildings ranged in size from 493 sq m (5,307sq ft) to 12,000sq m (129,167sq ft) and represented about 6 per cent of the completed Dublin office stock as of the end of 2005.

The study excluded any office building which contained exceptional expenditure, such as major repairs or plant installation, to avoid distortions to the typical average costs.

It highlighted wage inflation and rising energy costs as two of the drivers that have accelerated service charges in recent years. The report points to a 9 per cent rise in labour costs in 2005 alone when the national minimum wage in Ireland increased last April from €7 to €7.65. The cost of power, lighting and heating rose during the first nine months of 2005 by 11.9 per cent, as measured by the Consumer Price Index provided by the Central Statistics Office.

The study included 11 headline items under service charges. Looking at the Dublin average of €59.24 per sq m (€5.5 per sq m), it found that this was made up of cleaning (€10.19 per sq m or €0.95 per sq ft), security (€10.18 per sq m or €0.95 per sq ft), power and light (€7.74 per sq m or €0.72 per sq ft), heating and air conditioning (€7.68 per sq m or €0.71 per sq ft), management fees (€7.29 per sq m or €0.68 per sq ft), building staff/porterage (€7.08 per sq m or €0.66 per sq ft), maintenance (€5.75 per sq m or €0.53 per sq ft), lift/escalators (€2.49 per sq m or €0.23 per sq ft), insurance (€0.4 per sq m), car-park (€0.35 per sq m) and sundry (€0.09 per sq m).

The study found that office building service charges applied at suburban complexes were just over 10 per cent cheaper than for city centre buildings.

The figures are €54.11 per sq m (€5.03 per sq ft) for Dublin versus €48.54 per sq m (€4.51 per sq ft) for the suburbs in non-air conditioned buildings.

As to building size, services in smaller buildings - particularly those with air conditioning - are more expensive. Conditioned buildings of less than 2,500sq m (26,910sq ft) cost €71.37 per sq m (€6.63 per sq ft) on average.

The 2,500sq m to 5,000sq m (26,910sq ft to 53,820sq ft) category cost €64.54 per sq m (€6 per sq ft), for buildings above 5,000sq m (53,820sq ft) but under 7,500sq m (80,729sq ft) the charges were on average €50.16 per sq m (€4.66 per sq ft) and this falls to €44.58 per sq m (€4.14 per sq ft) for buildings larger than 7,500sq m (80,729sq ft).