Service fees 'should be better directed in towers'

Survey finds 38 per cent of fees in residential towers go towards utilities and 39 per cent towards maintenance.

DUBAI // Thirty-eight per cent of service fees in residential towers goes towards utilities, a cost that could easily be reduced, experts say of a preliminary report on rates.

Another 39 per cent goes to maintenance, the Middle East Facility Management Association (Mefma) found in a survey of 34 buildings.

Nine per cent of fees go to management services, 6 per cent each to master community fees and a "reserve fund" for long-term upkeep, and 2 per cent to insurance.

"This is one of the fundamentals. We can do a lot of energy-saving," said the Memfa board member Ali Al Suwaidi of the report's findings.

"If you do proper preventive maintenance to your air conditioning … and you've designed the air-conditioning capacity to be what you need, not more, it will always bring the utilities cost down."

District cooling systems, which supply entire communities, should trim costs, Mr Al Suwaidi noted. But some providers had overestimated demand and installed excess equipment, then passed those costs on to owners.

"It's happening in certain developments that the air conditioning is over-designed," he said.

Simple steps such as raising the temperature in lobbies and keeping doors shut would also reduce costs, said Alastair McCracken, the chief executive of Novus Community Management, which helps owners associations manage their properties.

"It's clearly the single most controllable cost," Mr McCracken said.

The savings from utilities should go towards raising reserve funds to 15 per cent of the budget, he said, to allow for infrequent but major costs such as replacing lifts and refinishing pools.

Mefma plans to conduct wider surveys in the coming years for a stronger basis of comparison.