Design Economics for the Built Environment
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Foreword xxiii
Preface xxv
PART I THEORIES, PRINCIPLES AND APPROACHES 1
1 Economic Context, Policy Environment and the Changing Role of Design Economists 3
Herbert Robinson and Barry Symonds
1.1 Introduction 3
1.2 The economic context 4
1.3 Globalisation of construction market 6
1.4 The policy environment and the construction industry 9
1.5 Current and emerging role of design economists 11
2 Theories and Principles of Design Economics 16
Herbert Robinson and Barry Symonds
2.1 Introduction 16
2.2 Factors affecting design costs and benefits 17
2.3 Capital cost theory 18
2.4 Whole life cost theory 21
2.5 Value management theory 23
2.6 Value of design theory 24
2.7 Carter's model 26
2.8 Resource?]based theory 27
3 New Approaches and Rules of Measurement for Cost Estimating and Planning 31
Barry Symonds, Peter Barnes and Herbert Robinson
3.1 Introduction 31
3.2 The standardisation of cost estimating 32
3.3 The RICS NRM 1 33
3.4 RIBA plan of work, RICS estimating, cost planning and NRM 1 34
3.5 Cost estimating and cost planning 35
3.6 Elemental Standard Form of Cost Analysis (SFCA) 40
3.7 Benchmarking (cost limits) 41
3.8 Building information modelling 43
3.9 Concluding remarks 44
4 The Relationship between Building Height and Construction Costs 47
David Picken and Benedict Ilozor
4.1 Introduction 47
4.2 Research in the 1970s and 1980s 48
4.3 More recent research in Hong Kong and Shanghai 50
4.4 Conclusions 59
5 Appraisal of Design to Determine Viability of Development Schemes 61
Herbert Robinson
5.1 Introduction 61
5.2 Assessing costs and benefits of design alternatives 61
5.3 Appraisal of design using discounting methods 63
5.4 Appraisal of design using residual technique 65
5.5 Case study of the blackfriars development project 69
5.6 Concluding remarks 77
6 Eco-cost Associated with Tall Buildings 80
Peter de Jong and J.W.F. Hans Wamelink
6.1 Introduction 80
6.2 Overview of the Dutch housing market and land use planning 80
6.3 Eco-costs/value ratio and the EVR model 82
6.4 Applying the EVR model to housing 86
6.5 EVR and tall buildings 88
6.6 Embedding EVR in other sustainable ranking methods 89
6.7 Conclusion 90
7 Productivity in Construction Projects 93
Shamil Naoum
7.1 Introduction 93
7.2 Concept and measurement of productivity 94
7.3 Previous literature on factors affecting site productivity 94
7.4 Productivity survey 100
7.5 Proposed framework for site productivity 102
7.6 Conclusion and further research 104
8 Design Variables and Whole-Life Cost Modelling 107
Andrea Pelzeter
8.1 Introduction 107
8.2 Whole-life cost modelling 108
8.3 Steps in LCC modelling 110
8.4 Design principles to optimise lcc 112
8.5 A worked example of an office façade 116
8.6 Inclusion of carbon emissions into wlc modelling 118
8.7 Limitations of wlc 119
8.8 Concluding remarks 119
9 Procurement and Contract Strategy: Risks Allocation and Construction Cost 121
John Adriaanse and Herbert Robinson
9.1 Introduction 121
9.2 Procurement strategy and contract selection 122
9.3 Wembley stadium case study 123
9.4 Allocation of risks and forms of contract 124
9.5 Risks and construction costs 125
9.6 Procurement systems and contract issues 128
9.7 Alternative forms of procurement 133
9.8 Concluding remarks 135
10 Sustainable Design, Investment and Value 137
Thomas Lützkendorf and David Lorenz
10.1 Introduction 137
10.2 Formulation of project goals 138
10.3 Identifying value-related characteristics 142
10.4 The performance approach 143
10.5 Use of sustainability assessment systems 146
10.6 Relationship between sustainable credentials and value 148
10.7 Concluding remarks 150
11 Carbon Reduction and Fiscal Incentives for Sustainable Design 152
Paul Farey
11.1 Introduction 152
11.2 Key drivers of owners and occupiers 153
11.3 Reducing demand for energy in buildings 153
11.4 Fiscal drivers 155
11.5 Reliefs and allowances 161
11.6 Subsidies and incentives 173
11.7 Conclusion 175
12 Environmental Assessment Tools: An Overview of the UK's BREEAM and the US's LEED 177
Ina Colombo, Benedict Ilozor and Herbert Robinson
12.1 Introduction 177
12.2 Context and the need to design to reduce carbon emission 178
12.3 Key features of environmental assessment tools 179
12.4 The Breeam tool 180
12.5 The LEED tool 184
12.6 Concluding remarks 190
13 Space Planning and Organisational Performance 191
Benedict Ilozor
13.1 Introduction 191
13.2 Organisational performance and innovative work settings 192
13.3 Hypotheses and test results 193
13.4 Discussion 195
13.5 Conclusions 198
14 Achieving Zero Carbon in Sustainable Communities 201
Malgorzata Jacewicz and Herbert Robinson
14.1 Introduction 201
14.2 Key concepts and principles 202
14.3 Key features of decentralised energy networks 203
14.4 Activity-based design approach 204
14.5 Key steps in the design process 206
14.6 Evaluating energy, space and land requirements 209
14.7 Concluding remarks 211
15 Flood Risk Mitigation: Design Considerations and Cost Implications for New and Existing Buildings 213
Rotimi Joseph, David Proverbs and Jessica Lamond
15.1 Introduction 213
15.2 Increasing challenges of flooding due to global warming and urban development 214
15.3 Flood mitigation 215
15.4 Flood mitigation consideration for new buildings at design stage 218
15.5 Implications of mitigation measures in terms of building cost 218
15.6 Implications of mitigation measures in terms of property value and insurance cost 222
15.7 Conclusions 224
PART II INDUSTRY PERSPECTIVE, CASE STUDIES AND IMPLICATIONS FOR CURRICULUM DEVELOPMENT 227
16 Reusing Knowledge and Leveraging Technology to Reduce Design and Construction Costs 229
Herbert Robinson and Chika Udeaja
16.1 Introduction 229
16.2 Knowledge reuse in construction processes and projects 229
16.3 Knowledge reuse in construction projects 231
16.4 Leveraging knowledge systems to reduce time and costs 232
16.5 4Projects knowledge solution 234
16.6 Case studies and discussions 235
16.7 Concluding remarks 237
17 Sustainable Design Economics and Property Valuation: An Industry Perspective 240
Barry Gilbertson, Ann Heywood, Ian Selby and John Symes-Thompson
17.1 Introduction 240
17.2 Sustainable design economics and property valuation 240
17.3 Data collection 243
17.4 UK government impact 244
17.5 The valuation process 245
17.6 Conclusion 247
18 Cost Planning of Construction Projects: An Industry Perspective 248
Jon Scott
18.1 Introduction 248
18.2 Concept and format of a cost plan 248
18.3 How a cost plan is put together 253
18.4 How the cost plan evolves through the riba design stages 255
18.5 Main factors that affect the overall cost of a building 257
18.6 Impact of sustainability on cost plans 258
18.7 Recent developments in BIM and the implications for cost planning 260
18.8 Conclusion 260
19 Life Cycle Costing and Sustainability Assessments: An Industry Perspective with Case Studies 262
Sean Lockie
19.1 Introduction 262
19.2 Sustainability considerations in design 263
19.3 Using the life cycle costing standards 269
19.4 Case study 1 - whole building 275
19.5 Case study 2 - lighting 279
19.6 Concluding remarks 282
20 Designing Super-Tall Buildings for Increased Resilience: New Measures and Cost Considerations 284
James Hayhoe
20.1 Introduction 284
20.2 Challenges of tall buildings and the need for increased resilience 284
20.3 Factors influencing design and cost of tall buildings 285
20.4 Design of counter-terrorism measures 288
20.5 Cost of new measures and design 291
20.6 Concluding remarks 295
21 Building Information Modelling: A New Approach to Design, Quantification, Costing, and Schedule Management with Case Studies 299
Aviad Almagor and Barry Symonds
21.1 Introduction 299
21.2 Concept of Bim 300
21.3 Integration and dataflow 302
21.4 Model Progression Specification: Developing a common language 303
21.5 Quality 305
21.6 Cost planning 310
21.7 Construction schedule 314
21.8 Conclusion and future directions 317
22 Case Study: Value Engineering and Management Focusing on Groundworks and Piling Packages 319
Richard Powell
22.1 Introduction 319
22.2 Why VM? 319
22.3 When and where is VM applied? 320
22.4 Value management implemention and tools used 320
22.5 Practical benefits and savings 324
22.6 Reflection and concluding remarks 327
23 Case Study: Value Engineering of a New Office Development with Retail Provision 330
Paul Ullmer
23.1 Introduction 330
23.2 Why value management? 330
23.3 When and where is value management applied? 331
23.4 Value management implementation and tools used 332
23.5 Practical benefits and savings 334
23.6 Concluding remarks 335
24 Case Studies: Sustainable Design, Innovation and Competitiveness in Construction Firms 336
Arthlene Amos and Herbert Robinson
24.1 Introduction 336
24.2 Background and context 336
24.3 Key drivers of sustainability in design and construction 337
24.4 Case studies 339
24.5 Findings and discussions 340
24.6 Concluding Remarks 353
25 Case Study: Retrofitting Building Services Design and Sustainability in Star Island 356
Victoria Hardy
25.1 Introduction 356
25.2 Initial study or analysis to identify problems 357
25.3 Funding for capital improvement plan 358
25.4 Evaluation of design options and the cost implications 358
25.5 Proposed design solution and costs 359
25.6 Concluding remarks 361
26 Case Studies: Maximising Design and Construction Opportunities through Fiscal Incentives 362
Paul Farey
26.1 Introduction 362
26.2 Strategic considerations 362
26.3 Capital allowances planning 364
26.4 Enhanced capital allowances (ECA) 366
26.5 Land remediation relief (LRR) 367
26.6 Value added tax 368
26.7 Taxation anti-avoidance 370
26.8 Conclusion 370
27 Mapping Sustainability in the Quantity Surveying Curriculum: Educating Tomorrow's Design Economists 372
Chika Udeaja, Damilola Ekundayo, Lei Zhou, John Pearson and Srinath Perera
27.1 Introduction 372
27.2 Literature review on sustainability issues 373
27.3 Development of the Sustainability Framework 376
27.4 Mapping of Sustainability Education in QS Degree Programmes 380
27.5 Discussion and conclusions 382
Appendix A: UK Property Investment Yields (December 2013) 387
Appendix B: IPD/RICS Sustainability Inspection Checklist 2014 389
Index 392
Editors and Contributors
Editors
Prof. Herbert Robinson
Herbert Robinson, the lead editor, has over 20 years experience in research, consultancy, training and capacity building. He is currently a Regional Adviser and Head of Training Division at the United Nations African Institute for Economic Development and Planning (IDEP), which is part of United Nations Regional Economic Commission for Africa. Prior to joining the UN, he was Professor of Construction Economics and Project Management, and the Director of Research at the Department of the Built Environment at London South Bank University. He was also the Course Director for over 7 years of the highly reputable postgraduate Quantity Surveying programme at the University. He has held previous positions as a Senior Research Associate at Loughborough University, Research Scholar and as a UN National Expert. After graduating from the University of Reading (UK), he worked with leading international consultants Arup (UK) and in the UNDP Institutional Strengthening Project/World Bank funded project in The Gambia. He has a significant publication record including the co-authorship of several books such as Infrastructure for the Built Environment: Global Procurement Strategies and Governance and Knowledge Management in Public Private Partnerships. He is a member of the Editorial Boards of the Journal of Financial Management for Property and Construction and Journal of Industrial Engineering.
Barry Symonds
Barry Symonds, Senator h.c. (Biberach an der Riss), graduated from University College London with an MSc in Building Economics. He holds several professional qualifications (FRICS, FCIOB, FBEng, ACIAT), and is currently Managing Director of Symonds Konsult International Ltd (Education Consultants) and Associate Director for Rapid5D (BIM Solutions UK). He was previously the Head of Property, Surveying and Construction (2004-2010) at London South Bank University, UK. He is a chartered quantity surveyor and construction economist, and has worked as a partner and consultant for practices in the UK and New Zealand. He has held academic advisory roles and has been visiting professor, lecturer, and external examiner in the UK, peninsular Malaysia, Sabah, Sarawak, Brunei, New Zealand, China, Singapore, Hong Kong, Jamaica and Germany. He is founding member of the successful MBA in International Real Estate (established 2001) at the University of Science, Biberach an der Riss. Barry has written and presented conference papers in the EU and SE Asia. He has served on many RICS committees, and held the positions of Chair of the RICS Essex Branch and QS Division and member of RICS Divisional Council. Barry is a Liveryman of the Worshipful Company of Constructors (City of London), where he is a member of the Scholarship & Awards Committee.
Prof. Barry Gilbertson
Barry Gilbertson now serves as a non-executive director for three listed companies and one private company after 15 years as a partner at PricewaterhouseCoopers (working on cases such as Canary Wharf, Wembley Stadium, Enron and Lehman Bros). An acknowledged expert in interpreting real estate markets, Barry specialises in strategic solutions for real estate within a business context, and focuses on corporate strategy and risk. Barry has a successful track record in 'borrower advocacy' cases, restoring trust between lender and borrower. Barry was the first chartered surveyor to become a partner in a firm of chartered accountants, anywhere in the world, and the 123rd RICS President in 2004/5 (inaugurating The President's Commission on Sustainability). Barry was a member of the United Nations Real Estate Advisory Group for 5 years, a member of the Bank of England's Property Forum for 10 years and a Trustee at the College of Estate Management for 8 years. He has been Visiting Professor at the University of Northumbria in Newcastle for 11 years and Visiting Professor at the Royal Agricultural University for 1 year. Barry has also been Visiting Lecturer at 20 universities around the world a member of the Council (and Court) of the University of Bath, and lead/worked on projects, or spoken at conferences, in 31 countries.
Prof. Benedict Ilozor
Benedict Ilozor teaches construction management, architecture, facilities planning, and design & management at the School of Engineering Technology, Eastern Michigan University, where he is Research & Graduate Assistants Coordinator. His teaching and research are cutting edge, and he currently works on Bendors Air Power System for electricity generation. He previously taught in Australian universities, and was Management Discipline Coordinator for Architecture and Construction Management, and head of Facilities Management for the Built Environment Research Group at the School of Architecture & Building, Deakin University. He was also Australian Coordinator for the Master of Real Estate distance education collaboration between Deakin University and University of Greenwich. He has over 100 publications (books, refereed papers and articles) on design and construction, energy, facilities space planning & management, and organisational performance. He is Regional Editor for the Journal of Management Development, and he is on the editorial board of several international journals.
Contributors
John Adriaanse
John Adriaanse lectures and researches in Construction Law at London South Bank University. Before qualifying as a Barrister he had 25 years of practical experience in the construction industry in South Africa, Namibia and in the UK. His last post before joining academia was as a legal adviser for a company active in many jurisdictions which gave him exposure to different legal systems. His research interests focuses on the relationship between the Common Law and the Standard Forms of Contract, the interaction between the law of tort, the law of contract and that of restitution based on the reversal of unjust enrichment. He is the author of Construction Contract Law, now in its third edition. He is also a Fellow of the Chartered Institute of Arbitrators.
Aviad Almagor
Aviad Almagor is the Director of Product Design at Vico Software. For the past decade, he has been deeply involved in developing cutting edge software solutions for the building industry. He played a vital role in the development of Vico Office - the first integrated 5D environment for the construction industry. Aviad is enthusiastic about process integration and multidisciplinary collaboration as tools to improve the efficiency and quality of the construction industry. In addition to his work on software development, Aviad has over 10 years experience in architectural design using Building Information Modelling technologies. Aviad received his Bachelor of Architecture degree from the Israel Institute of Technology and his Master of Business Administration degree from Edinburgh Business School, Heriot-Watt University.
Arthlene Amos
Arthlene Amos is a Quantity Surveyor working in the oil and gas industry in Trinidad. Her present assignment is through a secondment with bpTT where she is involved in one of the major turnaround projects for bpTT and Trinidad. She was previously a lecturer in quantity surveying and construction economics at Kingston University, London. Arthlene has experience with major UK contractors working on diverse projects including rail, building and tunnelling. She was involved in a number of major joint ventures between Costain, Veolia Water and MWH in Brighton, the most significant of these were the construction of an 11 km new sewer tunnel in Brighton, UK. She was part of the team in Costain, Laing O'Rourke, Bachy and Emcor Rail Joint Venture to upgrade St Pancras Station better known as the Channel Tunnel Rail Link project, where 13 new platforms were constructed and the existing deck extended to facilitate the Eurostar trains.
Peter Barnes
Peter Barnes is a Director of Blue Sky ADR Ltd, and has been actively involved in the construction industry for almost 40 years. In the early part of his career, Peter was a chief quantity surveyor for a building contractor, and then became head of a building contractor's construction division. After that he moved into consultancy work, specialising in contract and commercial advice, and dispute avoidance and resolution in relation to the construction industry. Peter has an MSc in Construction Law and Arbitration and is a Chartered Conservationist. Peter sits on the JCT Council, and partly as a result of that, but also because of his involvement with various other related committees, has developed a particular interest in the application of Building Information Modelling (BIM) and how the use of BIM will have an ever increasing influence on building practices over the coming years. He holds the following professional qualifications: FCIOB, MICE, MRICS, FCIArb, and MCInstCES.
Dr. Ina Colombo
Ina Colombo is the Deputy Director of the International Institute of Refrigeration based in Paris, France. She was previously a senior researcher and lecturer in the field of sustainable refrigeration and the reduction of the greenhouse gases at London South Bank University. She is a Domestic Energy Assessor Consultant and has developed expertise in reducing the environmental and economic impact of using carbon dioxide refrigeration in retail applications. She specialised in the field of electromechanical engineering including building services, renewable energy and refrigeration to address climate change and...
