Dear Leaseholders,
Part of the work the Residents Association does is to review the proposed Service Charge budget prepared by Savills.
As you may know we do not have any official powers, or ability to demand changes, but we do provide valuable input into the budget.
Please see the summary analysis we have prepared after reviewing the draft Service Charge budget for South Gardens for the year ending 30th June 2027. This is currently with Lendlease, the freeholder, for final approval.
This does not replace the official budget prepared by Savills, which will be issued, by them, in the next few weeks, but we wanted to provide you with a summary of what we believe are the key cost areas and issues.
Once the service charge budget has been confirmed we will publish it together with previous service charge budget packs on this page.
If you have any questions on this please don’t hesitate to contact us.
Total service charge
Our service charge is made up of two parts – the South Gardens direct service charge for services within the development as well as a contribution towards the overall Elephant Park Estate service charge:
As you can see there is an overall decrease of -5.2% with Savills budgeting for £146,611 less in the 2026-2027 period than 2025-2026. (Our service charge period is from 1st July to 30th June the following year).
There is an overall increase in the Elephant Park Estate charge due to the expansion of the estate, with the Wilderly coming online this summer, but the allocation to South Gardens is a decrease of -1.15%
The £382,898 charge for the Estate costs is an allocation of the overall Budget and is based upon the square meterage of South Gardens as a percentage of the total Elephant Park Estate size.
The reduction for South Gardens direct service charge (not including the Elephant Park estate) of -5.86% is largely driven by a material reduction in the insurance cost (approx. £200k) but off-set by increases in Management Services (further details below).
Total service charge by building
The total service charge can be further broken down by building, as many charges are building-specific (eg. maintenance of specific blocks, variable cleaning costs across different buildings due to size etc).
Note that, to get to your building’s total costs, the ‘Elephant Park – All Buildings’, Concierge and Leisure facilities are allocated to all apartments and need to be added to your building specific charges. Costs of the Car Park are charged only to those with parking spaces.
South Gardens Direct Charges – costs by category
Looking at the breakdown of costs for the South Gardens service charge only – not including the wider Estate contribution:
Soft services and Insurance have decreased whilst Site Management resources, Utilities and Hard services have increased. Overall there is a decrease of -5.86%, as noted in the first section. The majority of this is made up of a reduction in insurance costs (-43.53%).
South Gardens Direct Charge – cost by value
Here are the top ten costs by value:
M&E Maintenance has increased by 26.77% but this is largely due to re-allocation of expenses from other cost lines where there is a corresponding reduction. It forms part of the ‘Hard Services’ category where this is a +2.8% overall increase
Building Insurance has decreased by 43.53%: significant work has gone into getting more competitive quotes and in particular providing documentation to demonstrate a more proactive management of building assets which should reduce the level of claims – this, combined with a more favourable market, has resulted in savings.
Site Mgmt – Staff costs has also increased by 23.3%: this is due changes in the structure and operations of the site management team.
South Gardens – Direct Charges – increase by value
Sorting the same list by increase in value. This only shows the top ten increases and not the full list of line items, many of which have decreased.
As above, M&E Maintenance has increased due to re-allocation of expenses from other cost lines where there is a corresponding reduction.
H&S Fabric has increased by 112.5% (£20,250) and this is largely due to re-allocation of expenses from other cost lines where there is a corresponding reduction. It forms part of the ‘Hard Services’ category where this is a +2.8% overall increase
Fire & General Risk Assessment has increased by 98.83% (£13,218) and this is largely due to a new cost line for an annual audit of Savills management of the Elephant Park development. This has been put in place by the landlord, Lendlease.
Dwellent / Systems (increase of 83.68% or £12,050) is due to a reallocation of the site wide system that was previously recorded under the ‘security systems’ cost line. There is a larger reduction on the security system cost line as savings have been achieved.
Lift Repairs is a new line item. This was previously within the ‘Lift Maintenance’ cost line and there is an equivalent saving to reflect the reallocation.
Elephant Park Estate – costs by category
Looking at the wider Elephant Park Estate. We pay approximately 16% of the overall Estate charges:
The overall cost of the Estate has increased as it has expanded to accommodate the Wilderley, the latest development. However, the portion allocated to us in South Gardens has actually reduced slightly, with a saving of 1.15% or £4,447 from last year.
Service charge – outstanding issues
In our mission to reduce the overall cost of the service charge we (the RA) are following up with Savills on a number of areas. This includes:
- Site Management Staff Costs – although we have been given a general explanation regarding team structure changes we have requested a more detailed breakdown of this cost area.
- H&S Fabric and M&E Maintenance – whilst a large part of the increases are explained by cost re-allocations, and we can see corresponding savings on other costs lines, we are still requesting more detail on these areas.
- Systems – whilst there has been a reallocation of costs from security systems to the dwellent / systems cost line we have requested more detail on what makes up the costs for both of these cost lines
- Cost Allocation issue – Drake / Sir John Soane – whilst it appears that there is an outlying increase for one of the Drake / Sir John Soane cost allocation lines (vs savings in other buildings) this appears to be a change in allocation of some Fees – the corresponding saving is shown on the Drake / SJS ‘building’ cost line – we are just confirming this.
Conclusion
We are pleased to confirm that the draft budget indicates an overall saving from last year of 5.2%. However, this is an average saving across all of South Gardens – this will vary building to building and unit to unit.
Your individual service charge demands are expected to be issued in the coming weeks, once Lendlease signs off on the draft budget.
South Gardens Residents' Association 