The availability of measurement models that accurately reflect return-on-investment (ROI) is often the largest hurdle in the design, construction and maintenance of Buildings of the Future
A revolution in the construction and maintenance of buildings of the future is not being adequately reflected in traditional ROI business cases, and according to a new report by global engineering and infrastructure advisory company Aurecon, this is obstructing forward-looking design innovations and significantly damaging the future value of major building investments.
The short-term focus on start-up and construction costs is denying investors and building owners access to the design innovations that are increasingly important to the construction of digitally smart, ‘intelligent’ buildings which are able to use technology to improve operational efficiencies, employee productivity and reduce maintenance costs.
In a recent white paper released by Aurecon, titled ‘Buildings of the Future: bottom-line benefits’, a new narrative around the ROI of intelligent buildings is explored to demonstrate the negative effect that a short-term focus on start-up and construction costs often has on design innovation.
According to Aurecon, the property and construction industry is evolving dramatically as digital disruption, altered building practices and the need to respond to climate change and reduce energy consumption impact the sector. However, many building owners and investors still rely on more traditional ROI metrics, designing for the short term while ignoring the importance of designing buildings for the longer term.
The company has called for a new ROI model which accounts for financial as well as non-financial benefits such as improving employee productivity and wellbeing, while maintaining design flexibility to plan for a rapidly changing future.
Aurecon’s experience highlights that while Buildings of the Future have marginally higher start-up costs (2-6% more expensive than traditional buildings) in the short term, they can deliver significant savings, with a good ROI being achieved quickly (six months to two years) if focus is given to heating, ventilation, air conditioning (HVAC), lighting and some types of electrical loads, with a reduction in operating costs against traditional buildings of between 10-50%.
James Bennett, Aurecon’s Managing Director – Built Environment, said: “To provide a more accurate ROI analysis on Buildings of the Future, a three-dimensional approach is needed – one which presents the elements of design as interconnected pieces of a living and dynamic puzzle.
Peter Greaves, Aurecon’s Buildings of the Future Leader, added: “Buildings of the Future must be designed to meet future expectations while avoiding wasted space, inefficient designs and inflexible storeys. The paper explores why and how our thinking around ROI needs to evolve in line with this.”
Aurecon calls for an ROI model that reflects the importance of designing buildings for the long term and looks at both the financial and non-financial benefits of intelligent buildings, such as improving employee productivity and wellbeing, while maintaining design flexibility to plan for a rapidly changing future.
A holistic approach
According to Aurecon, based on these non-financial factors, Buildings of the Future demand a more robust evaluation of their ROI.
Intelligent buildings are the essence of future-ready architecture, but their true value lies in innovation and a shared vision, which necessitates moving away from old, one-dimensional models of measuring ROI, to synergetic models that encourage and thrive on collaboration throughout the entire lifecycle, starting at the design stage.
“For Buildings of the Future, idealistic future-focused models are necessary to measure value. Instead of spending too much time trying to demonstrate the financial ROI of intelligent buildings”, Greaves says, “We should rather be asking, what will the cost be of not innovating?”
Read ‘Buildings of the Future: bottom-line benefits’ here.