Towers H and I · 2020-07-02 · Service Costs Report 2019 – Towers H and I Page 8 7. COSTS VAT...

YOUR ANNUAL SERVICE COSTS EXPLAINED

Service Costs Report 2019

Towers H and I

Deloitte Accountants B.V. For identification purposes only. Related to auditor’s report dated June 30, 2020

Service Costs Report 2019 – Towers H and I

CONTENTS

INTRODUCTION ........................................................................................................................3

1. FINANCIAL SUMMARY .......................................................................................................4

2. GENERAL INFORMATION ...................................................................................................4

3. BUILDING COMPONENTS ...................................................................................................5

4. DISTRIBUTION AND SETTLEMENT ......................................................................................6

5. VAT ................................................................................................................................6

6. ELECTRICITY ...................................................................................................................6

7. COSTS ............................................................................................................................8

8. EXPLANATION ................................................................................................................ 10

ANNEX I: AUDIT DECLARATION BY THE INDEPENDENT ACCOUNTANT



INTRODUCTION

The landlord provides a number of supplies and services for the benefit of the tenants of World Trade Center

Amsterdam, in accordance with the tenancy agreement. This is because tenants in this multiple tenancy building

are not able to provide those services on their own and because the landlord has imposed some minimum

standards with respect to certain issues.

Until 30 April 2019 Beheermaatschappij WTC Amsterdam B.V. was the designated property manager and

committed to providing high-quality supplies and services for all the tenants of World Trade Center Amsterdam.

With the aim to provide an optimal level of service at a fair price. As of 1 May 2019 Beheermaatschappij WTC

Amsterdam B.V. was taken over by CBRE B.V. and the services were continued by the same familiar team.

The aim of this report is to provide clarity about the level of the service costs, the costs per facility or service and

any changes or deviations compared with the previous service costs year.

The Service Costs Report, and the final settlement have been prepared in accordance with the provisions of the

tenancy agreement and the General Provisions, which is an integral part of the tenancy agreement. The auditor’s

declaration by the independent accountant is enclosed as an appendix.

Amsterdam, 30 June 2020

S. Heymans

Director

CBRE B.V.



1. FINANCIAL SUMMARY

The rate per square meter for the final settlement of the service costs (supplies and services) and the kWh

tariff for individual electricity usage are determined as below:

Service costs tariff

2019 2018 Difference

Service costs € 2,151,052 € 1,928,663 € 222,389 12%

Plus: administration fee 5% € 107,553 € 96,433 € 11,120 12%

Total service costs € 2,258,605 € 2,025,096 € 233,509 12%

Total weighted area 37,553 m2 37,476 m2 77 m2 0.2%

Service costs tariff per m2 per year € 60.14 € 54.04 € 6.16 11%

Electricity tariff


Total electricity costs € 757,296 € 464,325 € 292,971 63%

Total electricity usage 6,762,664 kWh 6,478,078 kWh 284,586 kWh 4%

WTC kWh-tariff (excl admin fee) € 0.11198 per kWh € 0.07168 per kWh € 0.04030 per kWh 56%

Remarks:

• All costs shown in this report are excluding VAT

• The rates shown above can be found on the itemization of the service costs settlement

• See chapter 2 for an explanation of the total weighted area

2. GENERAL INFORMATION

The tenancy agreement states that an advance on the service costs is charged periodically in addition to the rent

that is due. Service costs are the costs for supplies and services that the landlord, on behalf of and at the expense

of the tenants, provides or contracts third parties for. Service costs arise from the use of a building and are

generally related to shared elements.

Service costs are managed and charged by the landlord. In most cased a system of advance payments with final

settlements is used to administer the service costs. This means that an advance payment amount is determined

on the basis of a budget and is charged in parallel with the rent. At the end of each calendar year, we settle the

balance between the actual costs incurred and the prepaid advances. The general service charges are distributed

pro rata to the area rented as well as to the rental period. These two components are together called the "weighted

area”.

The service charges for all periods of vacancy are fully borne by the Landlord.



3. BUILDING COMPONENTS

World Trade Center Amsterdam is sub-divided into the following building components:

Building section Locations

WTC-A Towers A, B, C, F & G

WTC-E Tower E

WTC-Z Towers H & I

The division shown above is used as much as possible for allocating costs to the different building components.

Each building component can have a different advance amount and a different service cost settlement. No service

costs are charged for the underground car park and leased parking places. The cost of electricity, cleaning and

security for the car park is born by the landlord and covered in the lease price for the parking places.



4. DISTRIBUTION AND SETTLEMENT

Service costs are administered per building component on the basis of cost type. For the service costs final

settlement, the actual distributed service costs are offset against the prepaid advances over the course of the

service cost year.

In general, a fixed (non-deductible) amount is charged for service costs for areas smaller than 27.5 m2 and those

specific cases are known as ‘all-in-areas’. There is a no final service cost settlement applied in those areas. A

fixed amount is also charged for storage areas and the fully furnished office units (Suite Offices, level C5), and

again a no service cost final settlement is applied. The periodic contribution fees for the service costs for storage

and all-in-areas are deducted from the total of the service costs. Service costs related to the offices and other

business areas are then distributed to the tenants on the basis of square meters, taking account of the lease

period.

5. VAT

VAT of 21% is charged on the service cost advances. However, VAT-percentages vary depending on the cost

types. The variations are 0%, 6% and 21%. This is why the service costs final settlement is subdivided into the

following three VAT groups:

VAT group VAT percentage Example

1 21 % Cleaning, energy, installation maintenance etc.

2 6 % Water, safety training etc.

3 0 % Pollution levy, insurance etc.

All costs shown in this report are excluding VAT.

6. ELECTRICITY

Main connection electricity

Towers A, B, C, F and G are connected to the electricity network by means of a single main connection. The

following contracts have been concluded with regard to the operation of the main connection:

• Delivery of electricity;

• Network administration for electricity;

• Reading of the main electricity meter;

The usage as shown on the main meter is referred to as the ‘total usage’. The unit for electricity usage is kilowatt

hour (kWh).



General usage

The general electricity usage is assigned to the service costs and includes the electricity usage for the common

areas and services, such as lighting in corridors and toilets, lifts, climate installation, etc. To determine the usage

levels, the following three components are deducted from the total usage:

• Individual electricity usage by tenants (invoiced to the respective tenant);

• Electricity usage for additional cooling net (invoiced separately to the respective tenant).

• Electricity usage for the car park (invoiced to the building owner);

Electricity usage for additional cooling or the so called ‘service cooling network’ is based on the amount of

connected cooling power, converted into electrical power.

Individual usage

The individual electricity usage concerns the electricity usage of all equipment and lighting within the leased

areas. The individual electricity usage is registered per floor via a central registration system and analyzed per

month. For the distribution of the individual electricity usage the usage per floor is distributed to all tenants on

that floor on the basis of the leased area, with due regard for the term of the lease.

Determining WTC kWh-tariff

The WTC kWh-tariff is calculated by dividing the total costs of the electrical systems by total usage.

Total costs (delivery + network adm. + meter-reading)

WTC kWh-tariff (EUR/kWh) =

Total usage (kWh)



7. COSTS

VAT Group 1 (21%) Costs

2019

% of

total

Budget

2019

Costs

2018

Cost difference

Energy

1 General electricity 411,233 19.1% 250,000 256,353 154,880 60%

2 City heating 207,863 9.7% 186,000 184,428 23,436 13%

Facility services

3 Telephone and internet 4,383 0.2% 6,120 4,191 192 5%

4 Cleaning 391,899 18.2% 363,508 364,744 27,155 7%

5 Maintenance natural stone 22,944 1.1% 23,040 22,582 362 2%

6 Façade cleaning 116,304 5.4% 151,500 110,645 5,660 5%

7 Greenery 7,508 0.3% 8,500 7,463 45 1%

8 Grounds and gardens 2,829 0.1% 3,300 3,268 -439 -13%

9 Security 211,406 9.8% 222,624 216,693 -5,287 -2%

10 Pest control 7,335 0.3% 4,875 9,389 -2,055 -22%

11 Waste handling 9,791 0.5% 2,250 2,702 7,089 262%

12 Signage 3,105 0.1% 5,000 6,471 -3,366 -52%

13 Internal mail 5,172 0.2% 6,845 5,344 -172 -3%

14 WTC Servicepoint 80,573 3.7% 77,266 77,820 2,753 4%

Technical services

15 Fire alarm connection 1,566 0.1% 1,990 1,532 34 2%

16 Maintenance installations 383,132 17.8% 397,173 387,663 -4,531 -1%

17 Monitoring installations 3,505 0.2% 3,500 3,353 152 5%

18 Inspections installations 1,815 0.1% 6,400 6,639 -4,824 -73%

19 Minor maintenance 157,955 7.3% 120,000 137,976 19,978 14%

20 Glass damage 4,350 0.2% 2,000 906 3,444 380%

Management

21 Accountants costs 9,872 0.5% 13,400 13,400 -3,528 -26%

22 WTC Emergency Team 3,816 0.2% 2,500 2,929 886 30%

23 Building superintendent 46,279 2.2% 44,124 45,121 1,158 3%

24 Facility support 46,314 2.2% 46,000 39,415 6,899 18%

25 Quality control 2,305 0.1% 2,856 2,794 -489 -17%

Miscellaneous

26 Subscriptions 4,702 0.2% 4,696 4,164 538 13%

28 Indoor GSM antenna 16,278 0.8% 18,400 16,278 0 0%

29 Contribution storages and shops -54,075 -2.5% -55,000 -54,238 163 0%

Subtotal 2,110,159 98.1% 1,918,867 1,880,027 230,133 12%




2019

% of

total

Budget

2019

Costs

2018

Cost difference

1 Water 21,680 1.0% 23,000 24,561 -2,881 -12%

2 Miscellaneous costs 801 0.0% 1,500 1,839 -1,038 -56%

Subtotal

22,481 1.0% 24,500 26,401 -3,920 -15%


2019

% of

total

Budget

2019

Costs

2018

Cost difference

1 Pollution levy 18,038 0.8% 19,660 17,824 214 1%

2 Miscellaneous costs 374 0.0% 0 35 339 967%

Subtotal

18,412 0.9% 19,660 17,859 553 3%

Total groups 1+2+3 2,151,052 100% 1,963,027 1,924,287 226,766 12%

Individual electricity Costs

2019

Costs

2018

Cost difference

Individual electricity usage 298,398 179.460 118.938 66%



8. EXPLANATION

VAT GROUP 1 (21%)

Energy

1. General electricity

This concerns the costs for electricity supply, network management and meter reading for the common areas and

facilities. Despite a 2% increase of the general electricity usage the costs increased with 60%. This was due to a

higher electricity rate, the introduction of an additional fee for wind energy and a higher energy tax as of 1

January 2019. See below an overview of the electricity rate and the calculation for the General Usage.

Electricity rate


Off-peak rate € 0.0523 per kWh € 0.0249 per kWh 110%

Peak rate € 0.0680 per kWh € 0.0388 per kWh 75%

Additional fee wind Dutch wind energy € 0.0100 per kWh € 0.0000 per kWh

Calculation general electricity usage


Total usage 6,762,664 kWh 6,478,078 kWh 4%

Min: usage car park 293,749 kWh 286,784 kWh 2%

Min: usage service cooling network 131,898 kWh 111,008 kWh 19%

Min: individual usage 2,664,699kWh 2,503,759 kWh 6%

General usage 3,672,318 kWh 3,576,527 kWh 3%

2. City heating

These costs relate to city heating. The heating Tower H and I is delivered via a geothermal-heat storage system

and uses the city heating network as a supplement. Despite a 17% decrease in usage the total costs have

increased due to a higher tariff per Gigajoule. See table below for the city heating in gigajoules (GJ).

Usage 2019 Usage 2018 Difference

11,250 GJ 13,146 GJ -17%

Facility services

3. Telephone & internet

These costs relate to communal subscription fees and costs for telephony, internet and work place services.

4. Cleaning

These costs relate to periodic maintenance and incidental costs for cleaning of the common areas at tower H and

I including the provision of sanitary supplies. The increase in costs is due to a higher use of sanitary supplies and

several one-off assignments for cleaning floors and the roof. The cost of cleaning the car park are carried by the

landlord.



5. Stone floor maintenance

These costs relate to the periodic maintenance of the natural stone floors of Lobby H/I and level I2.

6. Façade cleaning

These costs relate to the cleaning of windows and the exterior of the building. The costs differ from those of last

year due to an increased cleaning frequency of the entrances and WTC Servicepoint.

7. Greenery

These costs relate to the maintenance of plants, trees and shrubs as well as the costs for Christmas decorations.

8. Grounds/gardens

These costs relate to the removal of residue and stains, gutter cleaning and snow clearance.

9. Security

These costs relate to security services, such as the 24-hour manning of the control room and the presence of

surveillance staff. Revenue is also generated by selling additional security services to specific tenants. If the

existing security team is used, this fee is deducted from the control room costs. The difference with the previous

year is due to an increase of revenue generated by selling additional security services. Costs connected with the

underground car park are covered by the landlord and do not form part of the service costs.

10. Pest control

These costs relate to periodic pest control and if necessary additional assignments. In 2019 there were less one-

off assignments, hence the difference in costs compared with the previous year.

11. Waste handling

These costs relate to the collection and processing of waste from the common areas, such as toilets, pantries,

central halls and loading/unloading platforms. The difference with previous year is due to the increased usage of

sanitary supplies which has led to more waste. Also the redesign of Lobby H/I and level I2 caused more people

to enjoy these areas for lunches and informal meetings.

12. Signage

These costs relate to incidental costs for lettering and/or signage in the common areas. In 2019 less changes

where necessary to the information boards next to the Zuidplein entrance, hence the difference in costs when

compared with the previous year.

13. Internal mail

These costs relate to the collection of stamped mail, the monthly fee for the unsupervised wall safe used for

sending and receiving packages (MyPup) and for translations.

14. WTC Servicepoint

These costs relate to staff. These costs are divided among the three building components, relative to the volume

of facility services of each component.

Technical services

15. Fire system connection

These costs relate to the fire alarm system connected with the control room of the Regional Fire Brigade. The

costs refer to the telephone line and the subscription. Part of these costs will be allocated to the owners of the

Zuidplein car park, which includes the bike park.



16. Maintenance installations

These costs relate to maintenance contracts for systems including:

• Automatic doors;

• Security systems;

• Lifts;

• Escalators;

• Fire alarm systems;

• Lightning protection systems;

• Air conditioning systems;

• Emergency and low-voltage systems;

• Heat and cold generation systems;

• Sprinkler systems;

• Evacuation system.

17. Monitoring installations

These costs relate to monitoring the building management system, including climate systems and the registration

and analysis of energy usage.

18. Inspection installations

These costs relate to the inspection of lifts, escalators, façade installations and safety valves. The costs differ

from those of last year because lift inspections are on an 18 month cycle, which means the number of inspections

can vary from year to year.

19. Minor repairs

These costs relate to breakdowns and maintenance in the common areas, or to installations for common use,

when not covered by the systems maintenance contracts. The difference in costs is largely explained by the

increased maintenance of climate installations and sanitary facilities. See below.

Installation 2019 2018 Difference

Hinges & locks 20,006 16,781 3,225 19%

Ceilings & floors 6,349 7,807 -1,459 -19%

Electrics 7,132 7,030 102 1%

Blockages 3,386 13,088 -9,702 -74%

Sanitation 21,229 10,323 10,905 106%

Lighting 22,279 21,203 1,076 5%

Climate 64,384 32,389 31,995 99%

Fire alarm system 1,857 6,366 -4,509 -71%

Lifts & escalators 576 5,452 -4,876 -89%

Facade installation 0 239 -239 -100%

Other 10,758 17,299 -6,540 -38%

Total 157,955 137.976 19.978 14%

20. Glass damage

These costs relate to the replacement of broken windows, unless covered by the insurance of the party responsible

for the breakage. In 2019 one large glass panel of the façade was damaged and replaced.

Management

21. Accountants costs

These costs relate to the annual audit of the service costs settlement. For the audit of 2019 a new contract was

concluded, hence the difference in costs compared with the previous year.



22. WTC Emergency Team

These costs relate to the WTC safety organization and include a budget for staff, training and materials. In 2019

the WTC Emergency Update App was introduced, hence the difference in costs compared with the previous year.

23. Building superintendent

These costs relate to the management by a building superintendent of the facilities in the common areas. The

total costs are divided among the three building components and are relative to the volume of facility services of

each component.

24. Facility support

These costs relate to external facility support for the management of facility providers. The facility support costs

are divided among the three building components and are relative to the volume of facility services of each

component.

25. Quality control

These costs relate to external controls on cleaning practices based on the VSR method (Association for Research

into Professional Cleaning.

Miscellaneous

26. Subscriptions

These costs relate to the subscriptions and license fees for the digital reporting system (Facilitor) and the digital

key management system.

27. Indoor GSM antenna

These costs relate to the purchase of an indoor antenna system to improve mobile coverage. This system is also

known as a DAS, or distributed antenna system and was financed by the landlord. In consultation with the tenant

panel, 50% of the cost of the system will be integrated in the service costs for a period of seven years.

28. Service costs storage and all-in areas

This covers the cost of storages and the all-in areas including saving D-tower as explained in Chapter 4. The

periodic contribution fees for the service costs for storages and all-in areas are deducted from the total of the

service costs. These tenants are not liable for service costs.

VAT GROUP 2 (6%)

1. Water

This covers the costs for general water usage, rental of the water meters, tax and standing charges. Mains water

is used for toilets, showers, pantries and a number of technical installations. Water usage of hospitality operations

are not included and are charged directly to the tenants. This table shows general water usage year on year.

2019 (ex hospitality operations) 2018 (ex hospitality operations) Difference

16,177 m3 18,510 m3 -13%



2. Miscellaneous costs

This covers costs with a VAT rate of 6%, such as the provision of fresh flower arrangements for the WTC

Servicepoint until March 2019. As of April 2019 artificial flowers were used and because of the different VAT rate

these costs were booked under point 7 Greenery.

VAT GROUP 3 (0%)

1. Pollution levy

These costs relate to the estimated pollution levy for waste water purification and is based on water usage.

2. Miscellaneous costs

This covers costs which are subject to 0% VAT such as the permit for the mobile transmitter.

INDIVIDUAL ELECTRICITY

These costs relate to the total individual electricity usage of the leased spaces. Despite a 7% increase of usage

the total costs increased with 69% due to a higher tariff per kWh, the introduction of an additional fee for Wind

Energy and higher energy tax as of 1 January 2019.

Usage 2019 Usage 2018 Difference

2,664,699 kWh 2,490,398 kWh 7%


2006025789.04/MA/1

Deloitte Accountants B.V.

Gustav Mahlerlaan 2970

1081 LA Amsterdam

P.O.Box 58110

1040 HC Amsterdam

Netherlands

Tel: +31 (0)88 288 2888

Fax: +31 (0)88 288 9737

www.deloitte.nl

Deloitte Accountants B.V. is registered with the Trade Register of the Chamber of Commerce and Industry in Rotterdam number

24362853. Deloitte Accountants B.V. is a Netherlands affiliate of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu Limited.

Independent auditor’s report

To Ms. Heymans

Our opinion

We have audited the enclosed Service Costs Report 2019 of World Trade Center Amsterdam Tower H and I

(hereafter: “the overview”) for 2019, authenticated by us, of CBRE DOF Custodian B.V. located in

Amsterdam.

In our opinion the Service Costs Report 2019 of World Trade Center Amsterdam Tower H and I is prepared,

in all material respects, in accordance with the provisions in the individual (standard) rental agreement and

the content of the associated general provisions, which form an integral part of the rental agreement and

the basic principles included in the explanation of the service costs report (hereinafter “the provisions”).

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our

responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the

Service Costs Report 2019’ section of our report.

We are independent of CBRE DOF Custodian B.V. in accordance with the Verordening inzake de

onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional

Accountants, a regulation with respect to independence) and other relevant independence regulations in the

Netherlands. Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants

(VGBA, Dutch Code of Ethics).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

opinion.

Emphasis of the basis of accounting and restriction on use and distribution

We draw attention to note the provisions in preface of the service costs report, which describes the basis of

accounting. The control object has been prepared for the manager (“Beheerder”) and tenants of World Trade

Center Amsterdam Tower H and I and is prepared to assist CBRE DOF Custodian B.V. to comply with the

accounting for the service costs incurred in 2019 as included in the provisions in the overview. As a result,

the overview may not be suitable for another purpose. Therefore, our auditor's report is solely intended for

CBRE DOF Custodian B.V. and the manager and tenants of World Trade Center Amsterdam Tower H and I

and should not be distributed to or used by other parties. Our opinion is not modified in respect of this

matter.

Responsibilities of management for the Service Costs Report 2019

The manager is responsible for the preparation of the overview in accordance with the provisions.

Furthermore, the manager is responsible for such internal control as the manager determines is necessary

to enable the preparation of the Service Costs Report 2019 that is free from material misstatement, whether

due to fraud or error.

2006025789.04/MA/2

Our responsibilities for the audit of the Service Costs Report 2019

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient

and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not

detect all material errors and fraud during our audit.

Misstatement can arise from fraud or error and are considered material, if individually or in the aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of this

Service Costs Report 2019. The materiality affects the nature, timing and extent of our audit procedures and

the evaluation of the effect of identified misstatements on our opinion.

We have exercised professional judgement and have maintained professional skepticism throughout the

audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence

requirements. Our audit included among others:

• Identifying and assessing the risks of material misstatement of the Service Costs Report 2019, whether

due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining

audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not

detecting a material misstatement resulting from fraud is higher than for one resulting from error, as

fraud may involve collusion, forgery, intentional omissions, misrepresentations, or override of internal

control.

• Obtaining an understanding of internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control.

• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management.

• Evaluating the overall presentation, structure and content of the Service Costs Report 2019, including

the disclosures.

• Evaluating whether the Service Costs Report 2019 represents the underlying transactions and events

free from material misstatement.

We communicate with those charged with governance regarding, among other matters, the planned scope

and timing of the audit and significant audit findings, including any significant findings in internal control

that we identify during our audit.

Amsterdam, June 30, 2020

Deloitte Accountants B.V.

Signed on the original: J. Holland

Towers H and I · 2020-07-02 · Service Costs Report 2019 – Towers H and I Page 8 7. COSTS VAT...

Documents

Transcript of Towers H and I · 2020-07-02 · Service Costs Report 2019 – Towers H and I Page 8 7. COSTS VAT...