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Friday, 9 August 2013

Friday Guest Blog: Improving the Built Environment

By Jason Brownlee of Rider Levett Bucknall

The need to improve the UK’s built environment is unquestioned. The recession has forced many to think outside the box as traditional funding routes remain stalled.  However we may be thinking too hard as the buildings themselves, our most valuable asset, are left waiting patiently for recognition to dawn.
Transforming buildings to make them more efficient and fit better the demands of today offers the most exciting opportunity for decades.

Buildings are under occupied. Buildings are inappropriately sited. They are energy inefficienct. They no longer match the functions they supposedly facilitate. The list goes on.

Rethinking and reconfiguring our building stock opens the way to release capital, from selling excess buildings or land. The cash can fund major improvements and new building. That in turn provides current account savings through lower running costs, potentially with fantastic payback periods. The savings can be remarkable.

But while looking at inefficient buildings may spark one idea, the starting point of any asset management is not simply looking at the building itself. The key is to fully appreciate the real objectives of the organisation.

Of course occupancy levels, building management systems and smart technologies come into it, but you have to look beyond that. How can processes be made more efficient? Are current processes inefficient because they’ve had to fit the building? Is there a desire for more flexible working? Where do employees actually live?

You have to think laterally. Quirky things can produce big savings. That’s the fun.

Interestingly it’s government and big public sector bodies that are leading the way. They see the big savings – not just in money but in saving the planet’s resources.

In 2008 the Government produced its first State of the Estate reports looking at the efficiency and sustainability of its property.

The opening lines read: “Property is Government’s second most expensive asset after its staff.” Now there’s a clue.

In 2012 the latest report released in late May showed it had cut the size of its estate by almost a quarter five years.

Meanwhile the estimated running cost fell about £400 million in cash terms over the four years. That’s 10%. Given inflation, particularly fuel inflation, has was high, the savings against what would have been spent are far greater.  

The impact on carbon reduction targets has been encouraging. From 2009/10 to 2011/12 it cut carbon emissions from its estate by 12%.

The estate being measured here is just part of the total buildings and structures under public ownership. Big improvements are being made elsewhere.

In the public sector, some of the juiciest opportunities probably lie with local authorities. What’s more they are beginning to see how working with local businesses can supercharge the benefits to their communities.

Ironically perhaps, the opportunities can only increase as the public sector looks to scale down its workforce and streamline what it does as austerity bites.

So why has the private sector been so sluggish? There are many reasons, not least because strategic asset management, such as it is, tends to emerge from firms seeing what’s in the market and leasing accordingly.

Pretty much, looking at the private estate as a whole, it’s mainly commercial landlords reading the signs in the market that shapes the commercial estate.

Perhaps firms with big estates might take a leaf out of the public sector’s book and take a harder more strategic look at how they match their buildings to their business objectives.

Either way, for construction, this looks like the success story for the next decade or so if the more traditional funding routes remain tight.

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