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Beyond the workplaceMay 2016

Written by Gary Middlehurst, The University of Reading

With the UK commercial real estate sector developing over many years into a complex mixture of integrated relationships, the industry can now recognise each stakeholder as possessing quite different investment and operational needs. With an industry sector controlled and fundamentally driven by financial investment, it is not un-surprising to see many building projects focused towards short-term investment rather than the long-term needs of building occupants.

Figure 1: UK Commercial Property Values 2003-2013. Source: PMRECON - IPF Research Programme 2011-2015 (published March 2014) (click image to zoom)
This quite strategic dilemma faced by an industry desperate to expand and to promote new forms of sustainable intelligent buildings, can be said to manifest as a consequence of old fashioned investment strategies constrained by initial capital investment, but it is also as a consequence of ignoring proven whole life cycle value (WLCV) principles offering longer term holistic returns both to the economy and society as a whole. With commercial real estate professionals at last beginning to realise that occupier needs and demands are now becoming strategically important, it is the more complex aspect of stakeholder engagement that needs to be considered.

With the UK commercial property industry (Figure 1) estimated to have been worth c£647bn in 2013, it is not unreasonable to suggest that property investment is an integral part of our economy. From our pensions to taxation, our reliance upon property investment crosses all aspects of the UK economy.

Table 1: UK Commercial Property Financial Outlook. Source: IPF Research Programme 2011-2015 (published March 2014) Gross values (click image to zoom)
The UK commercial office horizon as indicated within Table - 1 is estimated to occupy circa 108million (m2) of floor space, and has a potential rental value of circa £13.9bn - based upon an average (UK) rental value of £128/m2.

With total UK investor property funding estimated at £364bn (56 percent of the total capital value), and offices accounting for £145bn or 40 percent of the total investment value (Figure 2), it is clear to see the influence investors possess on how our buildings might be designed and actually perform. The opportunity to affect investment decisions and to create a more sustainable investment strategy is now unique.

Figure 2: Investment Values per property sector. Source: IPF Research Programme
Global property agents Lambert Smith Hampton published within their latest report “Activating the
Workplace – Office Market 2015”, that occupiers are now becoming more discerning regarding their workplace environments. They claim businesses are now enhancing their workplaces to communicate the culture of their organisation, but they are now also seeking to enhance occupant health, well-being and productivity as a key business performance driver. As occupiers seek to use their space more efficiently and effectively, the LSH report also suggests that investors will now start to search for the value added property investment opportunity. This new focus on well-being, space and efficacy is now becoming a realisation that workplaces play a vital role in retaining and attracting new staff, with the most progressive firms moving “Beyond the Workplace” into the next generation of sustainable and productive workplaces.

LSH continue in the same report, that landlords and/or property owners who are in tune with well-being and the principles of “Beyond the Workplace”, now stand the best chance of maximising their property and workplace investments. Investigating other existing high quality spaces, businesses and a review of existing surveyed occupant feedback, LSH also noted a number of other key property aspects relevant to creating a “Beyond the Workplace” environment:

The UK property sector remains under relentless pressure to exist sustainably, however, it operates within significant business and regulatory constraints. These pressures are not only pushing organisations to improve cost to income ratios to satisfy shareholder demands, but they are now driving lower available capital and revenue budgets to meet increasing environmental demands. Simply ticking the environmental box with one hand, while not paying attention to the long-term productivity and satisfaction of building occupants is not financially sensible, nor is it appropriate for developing a feeling of business or national well-being.

The need to develop more intelligent and sustainable buildings that offer an opportunity to extend our vision towards satisfying occupant expectations has never been more important. The design of more intelligent buildings and workplaces to combine and meet occupant and building performance criteria is becoming considered a major step forward in meeting a sustainable agenda and for managing life cycle costs (LCC).

The Hive building in Manchester is a perfect example of where new intelligent architecture, naturally ventilated mixed mode designs are moving the workplace forward. The buildings simplistic architecture for satisfying occupant needs within a naturally ventilated, well insulated and low energy building is making the case for examining how we think about designing new modern buildings. Is this approach intelligent or is it simply common sense, do we need to embed such ideals into the DNA of how we consider buildings, and should we consider active or passive designs as leading us to the optimum solution. There is much to consider and the response to these suggestions is perhaps yes, but we must be conscious of business identity, workplace efficacy and the specifics of each and every project.

Figure 3: The Design, Construction and Operational Investment Timeline (click image to zoom)
Accepting their conflicts will inevitably exist at the front end of the design & construction process, hose involved need to be pragmatic when attempting to adopt or present a whole life cycle value principle (Figure 3). The dilemma faced when proposing the long-term benefits of adopting WLCV principles, is that it needs to be quantifiable at the initial investment stage otherwise it has no credibility. The use of financial investment calculations detailing modified internal rate of return (MIRR), net present value (NPV) and even simple payback (PB) periods are however tools that support the WLCV argument.

Analysing how we design and operate our buildings, we already know that workplaces and occupant productivity are inextricably linked, however we rarely monitor or manage this relationship to assess actual levels of performance.

When endeavouring to define a general state of existence, the words health and well-being have by their association become intrinsically synonymous in helping to define intelligent buildings. The term health and well-being is now used as a barometer for assessing a general feeling of satisfaction, happiness and existence, however, it has become a ubiquitous term without predefined boundaries. In the past, the opposite of health and well-being has been the awareness of Sick Building Syndrome (SBS) which is seen as a negative reactionary view of buildings and where IEQ factors have had an impact upon occupant performance. We have grown a natural mentality in understanding what is bad for us, but we are yet to realise what is actually good for us and to encapsulate these factors into a framework or standard. In trying to understand what is good for us, it is perhaps important that we understand and consider the term health & well-being, and to form a definition specific to workplace environments rather than a ubiquitous term. Buildings and workplaces even of different types are known to directly influence occupant health, however, when we attempt to investigate the term ‘well-being’ we realise although a simple statement the term is quite complex. One of the main difficulties in defining wellbeing, is that it is universally referenced
Figure 4: The Building and Occupant Performance System. Developed from Clements-Croome 2016 (click image to zoom)
across many applications and indeed environments, being applied subjectively and objectively in many instances. Therefore, to assess a specific view of well-being, it is important to define it within its own individual context and to empirically understand the various tangible factors which may impact what is generally accepted as a subjective feeling.

Seen by many, as a subjective perceived state of existence, health and well-being form two of a number of ordinal factors which interact with cardinal factors to drive building and occupant performance (Figure 4). Assembling a specific definition based upon a physiological approach to assessing the impacts of IEQ factors, a unique definition for health & well-being could extend to designing & operating “intelligent workspaces which not only keep the building occupant free from physical disease or pain, but support the individual effectively without stress, offering a quality environment responsive to individual needs and desires”.

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