Adrian Pargeter, Head of Technical and Product Development for Kingspan Insulation reports on a study showing how insulation with a minimal construction depth can help to maximise space…

Take-up of commercial space has continued to surge in 2015 with the latest office research from Knight Frank showing that purchases in ten major regional cities rose to 49% above the five year average in Q2. The key challenge when designing these buildings is how to maximise saleable space within the available footprint.

One option is to install premium insulation within the walls which allows the desired thermal performance to be achieved with a minimal construction depth, unlocking added floor space. An in-depth study from Sweett Group looking at commercial properties nationwide has now revealed that in almost all cases the return on this additional floor space far exceeds the cost of the insulation.

The Sweett study

For its study, Sweett Group took a database of 7,290 buildings, representative of commercial properties across Britain. The firm then compared the effects of installing low or premium performance insulation, in four commonly used wall constructions: brick and block, timber frame and two ventilated rainscreen constructions. The model considered a wide range of physical and financial building characteristics such as building use, shape, floor to wall ratio, actual construction costs, as well as rental income and yield based on locations across the country.

For each scenario, a comparison was made between the two insulation options, both designed to achieve a U-value of 0.22 W/m2.K. The construction width and cost for each build-up was entered into the model, and the Return on Investment (ROI) for the premium option was then calculated by dividing the added cost of the insulation, by the value of the additional space created in terms of rental income and yield.

As would be expected, the study showed an initial rise in projects costs of between, 0.1% and 1.89% for the overall project development. However despite these increases, the modelled results for the database properties showed that an overwhelming ROI could be achieved with the premium solution. In total, 92% of the buildings analysed showed a positive ROI, with 51% of buildings showing an ROI between 200% and 1,000%, and almost 1 in 5 displaying an ROI exceeding 1000%. Furthermore, for the database buildings in locations with non–domestic yields of 5% and lower, the ROI’s can exceed 2,500%

Case Studies

To verify the results from the database properties, Sweett Group also analysed ten real non–domestic building case studies, from different sectors and locations, on which it had provided cost consulting services in the last 24 months. The results from these case studies supported those from the database properties, with all ten buildings showing a positive ROI of as much as 1,645%.

One project Sweett looked at was a new, six storey office development in a prime location in Bristol city centre. The office was fitted out to a Cat-A specification, helping to meet the flourishing demand in the city where take up in the final quarter of 2014 outstripped the five year quarterly average by a factor of three.

The £30 million steel framed building was clad using a ventilated rainscreen system and Sweett Group compared two hybrid insulation build-ups as part of its analysis. Both build-ups feature an internal layer of glass mineral fibre behind a layer of particle board, however by using premium performance insulation instead of an outer layer of rock mineral fibre, the depth of the premium performance solution was reduced by 55 mm.

Whilst the premium performance build-up raised the construction cost by £10 per square metre, it also increased the floor area by 118.80 m2. This additional space provides a projected additional annual rental income of £34,274.00 and a capitalised value of £517,798.00, representing a massive ROI of 290% on the cost of the premium insulation.

Across the country

Since the initial research programme, Sweett has extended its study further to look at regional trends across Great Britain. As expected, the strongest returns were seen in and around London, however the study also revealed significant returns in almost all areas. For example, the ROI for installing premium insulation within retail warehouses was exceptional, with a minimum return of 651% in Cardiff and ROI’s of 1115% in Edinburgh, 1336% in Leeds and 1761% in Croydon.

Increased Margins

For planners, the challenge is always to get the best results from the available space. Whether it be a distribution centre in Cardiff, a retail unit in Glasgow or offices in Manchester. Sweetts research has shown that premium insulation can help achieve a consistent, excellent ROI. ■

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Adrian Pargeter

Head of Technical and Product Development

Kingspan Insulation Limited

Tel: +44 (0)1544 387 384

literature@kingspaninsulation.co.uk

www.kingspaninsulation.co.uk/realvalueofspace

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