Project teamResearch programmeIndustry contextQuantitative findingsQualitative findingsConclusions Overall Ratings by Question
Analysis by Industry Sub-sector
About the Quantitative Results
Measuring the impact of change on occupier satisfaction
The UK Occupier Satisfaction Index tracks changes in the satisfaction of commercial property occupiers. This section reports the quantitative results of the 2009 study and explains how the Index is calibrated.
Quantitative results
The UK Occupier Satisfaction Index has remained unchanged at 57 over the last year, despite the economic downturn.There have been some changes in occupier satisfaction in the different industry sub-sectors over the past 12 months. Satisfaction amongst office occupiers has improved by one point whilst the Index for industrial occupiers remains constant at 54. Retailer satisfaction has declined by two points, and small retailers are still less satisfied than larger retailers. The satisfaction gap between large and small occupiers has narrowed to 7 points in 2009, from 9 points in 2008.
The Index scores for each sub-sector are shown in the table below:
| Interview sample | OSI score | |
|---|---|---|
| Offices | 97 | 62 |
| Industrial | 39 | 54 |
| Retail | 95 | 55 |
| Smaller occupiers | 56 | 52 |
| Larger occupiers | 175 | 59 |
| Sample | 231 | 57 |
What a change in the Index means
The 2009 Index remains unchanged. In order to achieve a two point improvement in the Index next year there would have to be a positive shift in perception by one in ten occupiers by one rating level for all questions. A change in rating level is the equivalent of an occupier changing its satisfaction level from ‘poor’ to ‘average’, ‘average’ to ‘good’, or ‘good’ to ‘excellent’.
Measuring Change
We can measure change in two ways:- Firstly, we can compare the results of the sample of responses gathered in 2009 with the responses for the same questions asked in 2008 and 2007
- Secondly, we test the “perceived change” for several key questions. Here, we ask each respondent whether they feel more or less satisfied than they did twelve months ago.
The table below shows, by question, the percentage of occupiers who perceive a positive or a negative change over the past 12 months.
Overall ratings by question
The table below shows the number of occupiers rating each question. A 5 point rating scale was used, where the left column shows those rating the question most negatively and the right column those rating the question most positively.| Neg. | Pos. | |||||
| Property Product | Availability of commercial property of the right size and location for your business | 4.3% | 17.6% | 35.2% | 40.0% | 2.9% |
| Flexibility of leases within the UK, in terms of lease length and the ability to break | 9.3% | 25.6% | 27.3% | 35.2% | 2.6% | |
| Flexibility of leases within the UK, in terms of the ability to assign and sub-let | 9.1% | 24.7% | 40.9% | 24.2% | 1.0% | |
| Availability of the lease terms you want at a price you are willing to pay | 6.9% | 15.7% | 41.0% | 35.0% | 1.4% | |
| Business Relationships | Industry's understanding of your business needs | 10.5% | 23.7% | 43.0% | 21.5% | 1.3% |
| The property industry treats me as a valued customer | 12.7% | 26.6% | 23.6% | 32.3% | 4.8% | |
| Communication | 10.0% | 25.8% | 34.5% | 28.4% | 1.3% | |
| Responsiveness to requests for service | 10.5% | 25.1% | 42.0% | 18.7% | 3.7% | |
| Facilities services | 7.6% | 17.1% | 44.3% | 28.5% | 2.5% | |
| Value for money - service charge | 11.6% | 38.6% | 40.2% | 9.0% | 0.5% | |
| Timeliness of service charge management information | 7.8% | 30.0% | 37.8% | 23.9% | 0.6% | |
| Quality of service provided by property advisors, property lawyers and other property professionals | 4.4% | 12.7% | 34.6% | 44.9% | 3.4% | |
| Environmental Issues | Progress the UK property industry has shown in environmental initiatives | 8.3% | 34.4% | 33.3% | 22.9% | 1.0% |
| Availability of information on the environmental performance of your building | 6.9% | 24.1% | 24.8% | 34.5% | 9.7% | |
| Property Codes of Practice | Compliance with the Code of Practice for Commercial Leases | 8.0% | 26.4% | 25.2% | 36.8% | 3.7% |
| Compliance with the RICS Code of Practice for Service Charges | 7.9% | 25.0% | 35.0% | 31.4% | 0.7% | |
| Overall Satisfaction | Overall satisfaction as an occupier | 6.1% | 18.2% | 51.1% | 24.2% | 0.4% |
| Changed in overall satisfaction as a customer of the UK property industry over the past three years | 1.7% | 11.4% | 51.1% | 34.5% | 1.3% | |
| Relationship with the UK property industry compared with other business to business relationships | 11.8% | 41.5% | 37.3% | 9.0% | 0.5% | |
| Overall value for money | 5.5% | 29.0% | 47.5% | 17.1% | 0.9% |
Analysis by Industry Sub-sector
The Occupier Satisfaction Index 2009 reveals some interesting differences in satisfaction between the following sub-sectors: industrial, office and retail, small and large businesses. Looking at the indices, the industrial Index has remained constant whilst the Index for office occupiers has declined by one point. There is a decrease of two points in the retail Index.
Although the gap has narrowed in the past year, there is still a significant differential between the Occupier Satisfaction Index for large and small occupiers (large occupiers, 2009: 59; 2008:60 and small occupiers, 2009: 52; 2008:51)
Retailers are more dissatisfied than occupiers in other sub-sectors. This is most noticeable in responses to questions on the ability to assign and sub-let, communication, the understanding of their business needs and value for money for service charges.
Lease Flexibility
There has been an increase in satisfaction with the availability of property of the right size and location for occupiers’ businesses. This reflects the wider choice of property available in the marketplace. This is most evident in the retail group, in which 23% more occupiers are now satisfied.
Satisfaction has increased with flexibility in terms of lease length and ability to break across all industry sub-sectors. The biggest change is seen in the non-retail group.
Satisfaction with the ability to assign and sub-let has declined. This reflects a sharp fall in satisfaction amongst retailers who are finding it more difficult to offload excess space. By contrast, satisfaction within the non-retail group has remained almost constant. Satisfaction with the ability to assign and sub-let has declined more amongst larger occupiers than smaller businesses.
Overall, occupiers are now more satisfied that they can find the lease terms they want at a price they are willing to pay. In absolute terms, retail occupiers are the least satisfied.
Partnership
Retailers do not feel that property suppliers demonstrate sufficient understanding of their business needs in the current recession. This is reflected in a sharper decline in satisfaction relative to other sub-sectors.
Retailers want property suppliers to communicate more effectively. Whilst satisfaction ratings for communication in the overall sample have changed very little, satisfaction has fallen amongst retailers.
Responsiveness
Although there is significant variation, occupiers perceive that property suppliers are responding more quickly to requests for service. The biggest improvement in satisfaction is seen in retail. Qualitative feedback shows that many occupiers put this positive change down to the recession.
Sustainability
In overall terms, occupiers are slightly less satisfied with the progress the property industry is making with environmental initiatives. The small businesses sub-sector is the only group to report an improvement in satisfaction in this area.
Value for Money
Businesses across the board are more highly aware of property costs and value for money. Retailers are by far the least satisfied group with the value for money they receive for service charge. Two thirds claim to be dissatisfied.The satisfaction of smaller occupiers with value for money for service charge shows no change. This has declined for larger businesses. Insert table on value for money for service charge
In the industry as a whole, occupiers feel slightly less satisfied with the overall value for money provided. The largest decline in satisfaction is amongst retailers and larger organisations.
