Control design or design control?
The increasing use of technologies in buildings can impact on their lifespan
Will real estate projects conceived today hold steadfast to the investors' original vision for the duration of its projected lifespan? Probably not, is the quick answer.
Advances in engineering disciplines and capabilities, the exponential speed of advances in technology applications used by designers, and the innovative techniques deployed in construction, continually push the boundaries of what is achievable.
Imagery defies belief and this pours fuel onto the fire of targeted real estate investment, driven by strict investment parameters.
Throw into the equation the dynamic of global access, almost-instantaneous communication and a constant drive to improve standards and to be recognised via local awards for initiatives such as sustainability.
Other external factors are also at play: for example, laws and regulations imposing higher health, safety and environment obligations.
So, how much of the creative resource that is invested in terms of developing (and funding) an original concept can survive beyond any typical defects liability period?
Well-honed project and investment management processes, practices and procedures will – or, at least should – achieve delivery to time, cost and quality standards stipulated at the outset. But delivery is not the end point.
Delivery is the birth of the project into the live, occupied environment with its own, reasonably well-defined and predicted lifespan. It is at this point that a project takes on a life of its own – a real test of theoretical concept being converted into practice.
From this point, the determinants and rationale behind investment in real estate will meet, exceed, or fail miserably to achieve purported targets.
Particularly in emerging real estate markets, where demand dynamics, development vision and the pace of change can be breathtaking, the focus and controls applied in the early stages of a design and construction timeline pale into insignificance if an equally diligent approach has not been anticipated and applied to the full, projected lifespan of real estate.
Obvious areas of risks are operational security, fire, health and safety, the use of public utilities and a building’s environmental footprint. All of these are increasingly falling under the span of the regulator’s spotlight.
Agreements are also often confused with contracts, but are very different. Any two parties can reach an agreement but only a contract is enforceable in a court of law. Is there any substantive value in an agreement that cannot be enforced?
How much proportionate effort, scrutiny, due diligence and resources are applied in the early stages of a real estate project to future-proof it against changes that can be anticipated and visualised over the lifespan of a project?
If the draft provisions of any sales and lease agreements, if services and supplies agreements, if internal and external property and services boundaries, if rules and regulations are not considered – let alone defined while the real estate concept is still evolving, then the research and effort that has been put into a design will be thrown out.
The value, effort, resource expended, and most importantly, the integrity of the original concept that justified an initial capital investment must be protected and preserved over the long term.
There is a certain irony in all of this. Applying a greater focus at the outset would not only generate positive fiscal benefits for current, and potentially future, stakeholders, but could – indeed should – present a better value proposition for current or future investors at any stage in its life.
Colin Arthur is a senior consultant at Mace Macro International