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FAQ on rents

The huge investment in infrastructure that KI has made is necessary for ensuring long-term sustainability for both education and research. Now the major construction projects are effectively completed. The internal leasing system, including rents for 2018 and 2019, has been settled by the University Board – see Internhyresföreskrifter

Will there be any change in rent for 2019?

Although the original plan was for a rent increase of SEK 100 per square metre for 2019, rents will be the same as in 2018.

How will internal leasing be handled after 2019?

The President has been tasked by the University Board with reviewing the internal leasing and financing models to find solutions that will benefit the university and enhance predictability. The review will be carried out and presented next spring.

Changes in internal rents made in 2018

What does “differentiated rents” mean?

This is when the nature of a premises determines the per sq.m. rent. For example, laboratories, which are more costly than office space, warrant higher rents. The former system of equalised internal rents meant that the rates were the same regardless of which building or what kinds of room a department leased.

Why did KI introduce differentiated rents?

KI introduced differentiated internal rents in 2018 so that rates would reflect more the actual costs of the different premises. The costs for a laboratory are much higher than those for an office. The investments made in recent years have been dominated by premises for experimental laboratory research. The former equalised internal rent system meant that laboratories were effectively being subsidised by departments that did not have the same need for advanced premises. Another reason was to protect education against cost increases not linked to its needs.

Who took the decision?

The KI University Board (Konsistoriet) (ref. 1-515/2017).

How are the rents differentiated?

Dry premises such as offices, teaching rooms and conference rooms have been given a factor of 1.0, laboratory premises a factor of 1.3. As of 2019, the Board has decided (Konsistoriet, meeting minutes 2018:05) that all “swell” areas, regardless of whether they are connected to dry spaces or laboratory spaces, will be factor 1.0. This means lower rent for groups working in laboratories. Simple basement rooms have been given a factor of 0.5.

What are swell areas?

Swell areas are communal interior spaces, such as entrance halls, toilets, corridors and stairwells; in other words, spaces essential for the functioning of a building but not directly related to the business carried on within. These areas are distributed amongst the premises that depend on them. The area charged for a room is thus bigger than the room’s own surface area. Swell areas have the same factor as the rooms they are connected to. The total premises cost is thus distributed amongst the different “active” spaces.

What do rental costs include?

The internal rent is to cover rents the paid to KI’s landlords plus electricity, media, water, external security, teaching room maintenance, internal data and tele networks, post, etc. and remuneration to the part of the Faculties Office that deals with premises-related issues.

Rent also includes annual inspection of ventilated workplaces, first-aid posts, refuse removal, and the handling of certain waste material, as well as basic fixtures and fittings, such as tables, chairs, shelves, cupboards and filing cabinets in offices and laboratories that are adapted to the activities for which the premises were originally leased.

What about the rent model for animal facilities?

Experimental animal facilities are complex buildings and are now rented in their entirely by Comparative Medicine (KM), which pays the actual, rather than internal rent. The actual rent is usually higher than the internal rent owing to the special functional demands.

Newbuilds and internal rents

What are the consequences of the buildings costs of Biomedicum being lower than expected – will it mean, for example, lower rents for the tenants?

The cost of Biomedicum was lower than originally budgeted for, and the annual rent will be about SEK 30 million less. The difference will primarily be used to finance the unleased premises in Biomedicum. If all premises are leased, it will affect changes in internal rent. Nevertheless, the figures will be red from 2018 and on. The aim is to achieve balance by 2025–27. The main consequence of the lower cost of the building is that the budget will be brought into balance earlier.

Given the sheer size of KI’s investment, the fact that rents will go up has been known since day one. Since 2013, internal rents have been raised by SEK 150/sq.m. every year in order to prepare for the cost increase in 2018, when the four largest projects are completed in one and the same year. As the KI management has already announced, extra money was allocated in 2018 to help the departments. The plan has always been to go down to an increase of SEK 100/sq.m. per year starting in 2019. However, this amount will be set by the University Board a year at a time so that we can take into account annual trends.

Source: Facilities Office