Davis Langdon Middle East Handbook 2012

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MIDDLE EAST

CONSTRUCTION HANDBOOK

2012

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Middle East offices

Bahrain (Manama)

bahrainoffice@davislangdon.com +973 17 588 796

Egypt (Cairo), North Africa cairooffice@aecom.com +202 2 750 8145 KSA (Khobar) khobar@aecom.com +966 3 849 4400 KSA (Jeddah) jeddah@aecom.com +966 2 653 1902 KSA (Riyadh) riyadh@aecom.com +966 2 213 8500 Kuwait (Kuwait City)

kuwaitoffice@davislangdon.com +965 2 232 2999 Lebanon (Beirut) beirutoffice@davislangdon.com +961 1 780 111 Oman (Muscat) muscat@aecom.com +968 2 448 1664 Qatar (Doha) dohaoffice@davislangdon.com +974 4 458 0150

UAE (Abu Dhabi)

abudhabioffice@davislangdon.com +971 2 414 6000 UAE (Dubai) dubaioffice@davislangdon.com +971 4 423 3690

MIDDLE EAST

CONSTRUCTION HANDBOOK

2012

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1 DAVIS LANGDON

An AECOM Company 7

Global presence 7

Rich Middle East history 8

Industry awards 9

2 GLOBAL CONSTRUCTION CONSULTANTS

The bigger picture 13

Sector specialists 13

Cohesive solutions 13

AECOM’s integrated services 14

Thought leaders 14

3 ECONOMIC ROUND UP

Country statistics 2011 19

Economic and construction overview 20

Construction trends and outlook 27

4 ARTICLES

Is this the dawn of truly integrated project delivery ? 35

Cost-effective carbon reduction 43

Development Management — Creating a bankable scheme 48

Infrastructure: An unprecedented demand 54

Saudi Arabia: Social infrastructure development 60

Hosting global sporting events 65

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5 REFERENCE ARTICLES

Procurement routes 77

Middle East forms of contract 80

Building regulations and compliance 85

6 REFERENCE DATA

Exchange rates 95

International building cost comparison 96

Regional building cost comparison 98

Mechanical & electrical cost comparison 100

Major measured unit rates 102

Major material prices 104

Labour costs 106

Building services standards 107

Measurement formulae — two dimensional figures 110 Measurement formulae — three dimensional figures 111

Weights and measures 113

7 DIRECTORY OF OFFICES

Middle East 117

North Africa 121

Africa 122

Americas 124

Australia & New Zealand 125

UK & Europe 126

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FOREWORD

Welcome to the sixth edition of our Middle East Construction Handbook. I hope you will enjoy this year’s selection of articles, reference information and cost data.

As you may know, AECOM provides

over 60 professional services to clients across the Middle East geography, on large, medium and smaller sized projects and across all parts of the value chain. These services include Front End Consultancy, Development Management, Program Management, Project Management, Construction Management, Contract Administration and Construction, to name a few.

At each point in this value chain there is a critical relationship between the disciplines of time, cost, quality and Safety, Health and Environment (SH&E). AECOM is ideally positioned to manage these services on behalf of our clients. The provision of these services and disciplines may be required individually, or through an integrated offering, dependant on the drivers of a particular client or project. This year, we see a huge opportunity in Development Management — creating a bankable scheme. Development Management considers the overall performance of a project when measured against key drivers. Key drivers will vary from project to project but examples common to all projects include risk, cost, time, quality and design. The project’s performance will guide decisions relating to how the investors can achieve their desired returns, or whether other stakeholders could be interested in participating, such as a hotel operator or retailer for example.

Overall, the outlook for the region is positive as discussed in the Economic Round Up section of this handbook, with the drive to invest in education, health and sporting venues expected to provide ample construction opportunity over the coming years.

We hope you find the handbook of interest, assistance and value to you, your projects and developments across the region. As with previous years, we are seeking your feedback to support our drive for continuous improvement

in everything that we do.

Mark Fletcher, Senior Vice President Davis Langdon, An AECOM Company

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DAVIS LANGDON

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DAVIS LANGDON

An AECOM company

In 2010, Davis Langdon joined AECOM, a leading provider of professional technical and management support services for government and commercial clients around the world. Listed as a Fortune 500 company, one of America’s largest publicly traded companies, AECOM has over 45,000 talented professionals, including architects, engineers, designers, planners, scientists and management

professionals, who serve clients in more than 125 countries around the world.

Since AECOM was launched as an independent company in 1990, the firm has grown and diversified through corporate expansion and acquisition activities that have significantly broadened the company’s business lines and geographic reach.

In partnership with AECOM, Davis Langdon delivers consultancy services as part of a complete end-to-end offer, while Davis Langdon’s strong cost and project management capabilities bolster AECOM’s growing portfolio of construction management services.

Global presence

With over 3,000 people in over 75 offices worldwide, Davis Langdon can support long-term business needs from both a local and global perspective. We have offices in the following regions:

Middle East

Bahrain, Egypt (North Africa), Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and United Arab Emirates

Africa

Botswana, Mozambique, Nigeria and South Africa; Cape Town, Durban, George, Pietermaritzburg, Port Elizabeth, Pretoria, Stellenbosch and Vanderbijlpark

Americas

Boston, Honolulu, Houston, New York, Philadelphia, Sacramento, San Francisco, Seattle and Washington, D.C.

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Australia & New Zealand

Adelaide, Auckland, Brisbane, Cairns, Canberra, Christchurch, Darwin, Hobart, Melbourne, Perth, Sydney, Townsville and Wellington

UK & Europe

Azerbaijan, Birmingham, Bristol, Bulgaria, Cambridge, Cardiff, Czech Republic, Cork, Edinburgh, England, Estonia, France, Galway, Germany, Glasgow, Holland, Ireland, Italy, Kazakhstan, Latvia, Leeds, Limerick, Liverpool, Maidstone, Manchester, Norwich, Oxford, Peterborough, Plymouth, Scotland, Southampton, Spain, Wales, Turkey, Ukraine and Uzbekistan

Rich Middle East history

Our Middle East history is a commitment and legacy we are most proud of. We are celebrating over 60 continuous years of adding value to construction projects in the Middle East.

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Industry awards

The consistently high standard of professional service provided by both AECOM and Davis Langdon is recognised throughout the construction industry, as evidenced by the following prestigious industry awards:

Davis Langdon

Building

“Project/Construction Manager of the Year” 2004

World Architecture

“Top International Cost Consultant” 18 years in succession

Building

“Consultant/Surveyor of the Year”

1995, 1996, 2000, 2001, 2003, 2006, 2007, 2008 & 2009 Times

“100 Best Companies to Work For” 2005, 2006, 2007, 2008 & 2009

AECOM

Engineering News-Record

AECOM is ranked No. 1 on the magazine’s list of the top 500 design firms

Newsweek

AECOM featured in Newsweek’s list of the Greenest Companies in the US

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GLOBAL

CONSTRUCTION

CONSULTANTS

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GLOBAL CONSTRUCTION

CONSULTANTS

Davis Langdon has always seen itself as a forward-thinking organisation and has developed a wide range of technical expertise around the development of land, infrastructure and buildings.

More recently, ambition has pushed us to think harder about the context in which we give our advice. We believe there are too many consultants who view a problem as a technical issue, and therefore provide a technical solution. In many cases this is simply giving the client the “expected,” but such advice can have limited value.

The bigger picture

If we were to analyse situations where our advice has been most effective, it is in the creative application of our knowledge and experience. While our roots are in technical delivery, our clients value the fact that our offer always contains a strategic component.

Our ability to think big means we focus on the successful delivery of the project in hand, whilst also appreciating our clients’ goals and objectives from a broader perspective. Our engagement with the bigger picture enables us to operate beyond project level and support long-term business strategies. It is this approach which makes us the leading construction consultancy we are today.

Sector specialists

Where appropriate, we structure ourselves around our clients’ sectors, to maintain a detailed understanding of the dynamics influencing their different markets. Simply put, clients have access to individuals who are experts in their specific field. Our ability to offer specialists and not generalists adds real value and sets us apart from our competitors.

Cohesive solutions

We can support the challenges and opportunities our clients face throughout the life cycle of a development, from business and investment strategy at the organisational level right through to operational efficiency of the final built product.

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Our core services of program management, project management and cost management are augmented by a comprehensive range of specialist services which complement what we do at the core, reduce risk and add value. We combine and tailor our services to support project and business needs.

AECOM’s integrated services

Davis Langdon’s project management, cost management and consultancy services form a global capability within the AECOM organisation, Program, Cost, Consultancy (PCC). In addition to Davis Langdon’s Program, Cost and

Consultancy Services, AECOM offers a full suite of integrated capabilities which includes Architecture, Building Engineering, Construction Services, Design and Planning, Economics, Energy, Environment, Government, Mining, Oil and Gas, Program Management, Transportation and Water.

We focus on identifying issues and encouraging our people to find innovative solutions. This approach allows our clients to assemble a business case which is well considered, properly priced and has measurable outcomes. Our people are our greatest asset and investing in them is at the heart of our business. Through our recruitment and development programmes we harness a range of knowledge and skills to ensure our clients are working with the best people for their projects. In addition to our project delivery teams we employ management consultants, economists and financial specialists to ensure we can support all your needs.

Thought leaders

In an increasingly dynamic and fluctuating market, the need, expectation and ability to capture, analyse and disseminate “big data” separates leading consultancies from their peers and provides predictive and best advice to our clients. The best outcomes for our clients and their programmes are reinforced with content and experience-rich industry best advice.

Data, information and knowledge is the core foundation for a consultancy business, providing the content that underpins our professional advice. As a leading consultancy in the built, natural and social environments, we have over 45,000 professionals connected through our knowledge network. This provides unparalleled data from which we

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can determine and establish new trends, provide leading advice and innovate in our end-markets with fresh products and services for our clients.

This year will see the expansion of our digital solutions offer to the market providing easier access to our knowledge. We are therefore uniquely placed to anticipate and be active in our support of our clients.

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ECONOMIC

ROUND UP

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19 Country s ta tis tics 2011 Bahr ain Eg yp t Jor dan K SA K uw ait Lebanon Oman Qa tar Syria UA E Land Ar ea , km 2 665 995,450 91 ,971 2, 149,690 17 ,820 10 ,230 212,460 11 ,437 184,050 83,600 Capital City Manama Cair o Amman Riy adh K uw ait Beir ut Musca t Doha Damascus Abu Dhabi Popula tion, million 1.1 78.3 6.1 26. 1 3.6 3.9 3.0 1. 7 20 .6 5.1 GDP , US $ billion 22. 7 225.9 26.5 434.6 131 .3 39.2 55.6 129.5 59.3 301 .9 R eal GDP Gr owth, % 4.1 5.1 3.1 3.7 2.0 7. 5 4.2 16.3 3.2 3.2 R eal GDP Gr owth, 2011 -2016 pa f or ecas t 5.0 4.8 4.7 4.7 5.0 3.9 4.5 7. 3 5.0 4.0 GDP /Capita (PPP) , US $ 26,852 6,354 5,64 4 23,826 37 ,849 15, 193 25,439 88,559 5,208 48,821 Cons tr uc tion Output , % o f GDP* 3.9 4.6 4.8 4.4 1. 9 13.3 5.4 5.2 3.1 9.0 Value o f Cons tr uc tion Output* , US $ billion 0.9 10 .4 1. 3 19. 0 2.5 5.2 3.1 6.6 1. 8 20 .7 Pr ojec t a w ar ds , US $ billion 2.7 n/a 2.4 59.2 13.4 1. 5 8.3 11 .2 1. 5 41 .5

Consumer Price Infla

tion, % 2.0 10 .7 5.0 5.3 4.0 4.0 3.3 -2.5 4.4 0.9 *es tima te onl y, e xcludes r eal es ta te . All da ta ar e 2010 da ta unl ess o therwise s ta ted. Sour ce: IMF and various na tional sta tis tics offices . Value o f cons tr uc tion in L ebanon, K uw ait , Syria , U AE is cal cula

ted based on the shar

e o f cons tr uc tion in GDP in 2009 ap plied t o 2010 GDP fig ur es .

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ECONOMIC AND

CONSTRUCTION OVERVIEW

Global economy: Volatility in the face of

new and old worries

In 2011, the global economy faced more political and economic volatility than had been anticipated and this uncertainty is expected to continue into 2012. Supply disruptions in early 2011 and firm demand from fast growing industrialising economies caused oil and commodity prices to rise sharply during the first few months of the year, raising the spectre of inflation. The devastating earthquake and tsunami that struck Japan in March disrupted supply chains around the world and weighed on consumer sentiment and spending. At the same time, a number of countries across North Africa and the Middle East have seen, and are still facing, political upheavals not seen for generations.

In addition, the 2008/09 global recession has left scars on the world economy with the main legacy being the large public debt accumulated by many Western economies, most notably in Europe and the US.

The political drama in the US surrounding the extension of the US$14.3-trillion federal debt ceiling — or to face a default — rattled financial markets in summer 2011. A last minute deal was made, but there still remains uncertainty about the fiscal stability in the US, with implications for global financial markets and the world economy. Consequently, Standard & Poors ratings agency, downgraded the US long-term sovereign debt rating — the first ever downgrade of the US — which sent shockwaves through markets. Meanwhile, the sovereign debt crisis in the Eurozone continued to escalate over the course of 2011, with more countries, including Italy and Spain, dragged into the spotlight.

Global inflation escalated in the first half of 2011 due to soaring commodity prices and accelerating demand pressures in the emerging markets. Many of these fast growing economies have embarked on monetary tightening to cool their economies.

All of these events dented optimism about a sustained global economic recovery and caused extreme asset

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market volatility. In August 2011, fears of a renewed global downturn culminated in global stock market crashes. Reflecting this, the International Monetary Fund (IMF) revised down global growth projections for the second half of 2011. More positively, the IMF predicts this slowdown to be temporary, as many of the growth drivers remain in place, including loose macro-economic conditions, pent up consumer and investment demand and strong corporate earnings. The main theme of unbalanced global activity continues; growth will be slow in advanced economies that face fiscal and financial problems, while activity is set to remain sound in advanced economies that do not face such challenges. Looking ahead, there are downside risks to growth, relating mainly to further escalation of the debt crisis on both sides of the Atlantic, a slower US economic recovery and overheating pressures in some key emerging economies. In addition, there are a number of political and economic wild cards that could further derail global growth in the year ahead, including further political upheaval in the Middle East and North Africa region (MENA), sudden regime collapses, natural and environmental disasters, and volatile commodity markets. Many of these events cannot be excluded, but tend to catch markets and investors by surprise if they happen.

Global construction stabilised in 2011, driven mainly by public investment in infrastructure, though overall, this was not enough to offset the continuing slack in private construction in many key construction markets. An upturn in private construction is still expected for 2012, but given the current low investor confidence, a full recovery in private demand may still be delayed.

Given the trends in the wider global economy, construction growth will continue to shift towards Asia and other emerging markets, including the Middle East, where economic growth, rising populations, a widening middle class and rapid urbanisation is putting pressure on existing infrastructure. Construction in many developed countries will be constrained by slower economic growth, a requirement to cut large public debts and limited population growth.

In 2010, the global construction industry was worth US$7.2 trillion and according to latest forecasts, the market is predicted to grow to US$12 trillion by 2020. The emerging markets’ share is expected to rise from 46 per cent today, to 55 per cent by the end of this decade. Asia, Latin America and the Middle East will be the main construction growth areas, with infrastructure as the main beneficiary.

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Middle East: Politics driving economics

The impact of global factors on the Gulf Cooperation Council (GCC) and wider Middle East is being felt primarily through financial markets and oil prices. Consequently, the region remains vulnerable to global risks which have delayed a full recovery in private sector activity. After a period of political turmoil earlier in 2011, relative calm has been restored in the GCC. Regional stress points remain in Libya, Syria and Yemen, while the GCC economies have, generally managed to overcome investor concerns through a combination of policy initiatives and, until recently, increasing oil prices.

The widely divergent political picture within the region is shaping the outlook for economic growth. In the post-revolutionary countries — Tunisia and Egypt — where the old regimes were toppled in early 2011, interim governments are seeking a “new normality” with the outcome yet to be defined. Both economies are struggling with the impact of the revolutions, most noticeably felt in sharp falls in production, tourism and foreign investment. Weaker economic performance is putting pressure on public budgets, though the risk of fiscal pressures turning into an economic crisis is being reduced by financial support that the Western and Arab governments have promised. Whilst the economies appear to be stabilising, it is likely to take a while until growth returns to trend. Libya, Syria and Yemen continue to face violent protest and a return to the old order is difficult to imagine, though at the same time it is highly uncertain what new order will emerge. Jordan and Oman have limited financial resources and are under pressure to sustain strong economic growth to create enough jobs for their young and growing populations. Whilst social unrest has largely been contained in both countries, investment sentiment has still been hurt and the tourism sector has decelerated, negatively impacting on economic growth.

The outlook for the commodity-rich GCC states is more benign as governments have the firepower to support their economies, while high oil prices have improved growth prospects. The strongest economic growth is expected in Qatar, where expansion will be driven by high hydrocarbon prices, a considerable amount of infrastructure projects in the pipeline and a new focussed five-year development plan. Saudi Arabia has weathered the regional political turmoil remarkably well, and expansion in the Kingdom will be driven by strong growth in the oil economy and public

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spending. In addition to an already expansionary 2011

budget, earlier in 2011 the Saudi government announced two additional spending plans worth some US$120 billion (or 30 per cent of GDP), which included social transfers, job creation programmes and capital spending pledges. The UAE is benefiting from strong growth in the oil sector, ensuring that public spending can continue, which is important to support momentum in the non-oil economy. Spared from any political turmoil, the UAE is the region’s safe haven and is repositioning itself as the pre-eminent business and transport hub, boosting long-term growth prospects. Dubai remains vulnerable as its real estate sector has yet to stabilise, and this is also felt in Abu Dhabi. More positively, both Dubai and Abu Dhabi are benefiting from firm international trade and a strong tourism sector, both of which will boost overall growth rates.

The political situation in Kuwait remains volatile caused by continued stand-offs between the government and the parliament, which is delaying the flow of public funds and is weighing on private sector confidence. Consequently, while high oil prices are boosting public finances and the overall GDP growth rate, non-oil activity remains slow. Within the GCC, Bahrain’s economy has been hit hardest by political instability in 2011. Whilst the headline growth rate is being buoyed by higher oil revenues, increased public spending and a slow return of private sector confidence, the economy is likely to under-perform its regional peers in the near term.

The region certainly continues to face challenges with demographic pressures, high levels of youth unemployment and the need for economic diversification. As regional growth will be relatively robust by global standards this year and next, generating economic growth — inclusive and at a pace that will ensure a high level of job creation — will remain the most important challenge for the region in the years ahead.

The medium term prospects for the region remain positive, and most observers expect the Middle East to be among the fastest growing regions in the years ahead. Factors that will drive future economic growth and construction investment remain in place; petrodollars, population, policies, and pent up demand from historic under-investment in key sectors, such as affordable housing, education, healthcare, energy and water security.

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Construction industry: High expectations

Headline economic growth in most of the GCC countries has distinctly picked up this year as a result of higher commodity prices. Private sector sentiment continues to be relatively subdued in parts due to higher political risks. Consequently, foreign capital flows have weakened and the recovery in bank lending is mixed across the region. Despite the announcement of large (additional) government spending programmes, the project’s pipeline has not responded as quickly this year as had been expected. Middle East news, data and analysis (MEED) data shows that fewer project awards and a number of cancelled projects have cut the value planned, or projects underway in the GCC by US$378 billion in the first half of 2011 — an 18 per cent drop since end 2010. After a general pick up during the second half of 2010, the value of projects awarded fell back by a fifth during the first half of 2011. Within this, the value of construction and infrastructure project awards across ten Middle East countries fell from US$50.5 billion in the second half of 2010, to US$39.5 billion in the first half of 2011.

Government spending continues to dominate project awards across the region, in particular, the areas of transport (ports, airports, roads and railways), power

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and water, and social infrastructure. Expectations are that the second half of 2011 is to remain relatively slow, as continued uncertainty flows through global financial markets.

In Qatar and Saudi Arabia, capital spending is expected to enter a new era of strong growth. The (additional) spending programme announced in Saudi Arabia should, once projects start to feed through, result in a general uplift in activity. Progress has been slower than expected this year with US$11.8 billion of construction and infrastructure projects awarded in the first half of 2011, compared to US$19.2 billion in the second half of 2010. The project pipeline remains larger, with the value of projects planned and underway at US$623 billion in August 2011 — the largest pipeline in the Middle East.

There has been much excitement in the Qatari construction industry since the country won the right, in December 2010, to host the 2022 FIFA World Cup. Projects worth US$100 billion-plus have been announced across the whole industry, ranging from directly associated football infrastructure (stadiums, venues, hotels and leisure facilities) to an ambitious transport investment programme that includes roads, expressways, and an integrated, high-speed rail, metro and light rapid transport system. Qatar has also prioritised social infrastructure development, with plans to increase the provision of education and healthcare facilities. In addition, increased investment in new power, water and sewage treatment plants are expected over the coming years to deal with population growth. Contract awards have picked up in the first half of 2011, with some US$4 billion construction and infrastructure contracts awarded — double the level when compared to the second half of 2010. With some US$228.3 billion projects planned or underway, predictions are that Qatar will be one of the fastest growing construction markets globally in the years ahead.

In the UAE, the value of projects planned or underway stood at US$621.7 billion in August 2011, compared to US$818.6 billion in December 2010, reflecting the continuing challenging industry conditions in the country. Awarded construction and infrastructure projects totalled US$8.8 billion in the first half of 2011, compared to US$9.7 billion in 2010. According to MEED, contract awards in Abu Dhabi have slowed markedly this year, whilst the 2011 federal budget included a 6 per cent cut in spending. Public capital investment should still support the industry going forward.

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For example, the federal government has pledged US$1.6 billion in infrastructure development for the northern emirates, while Abu Dhabi in driving forward industrial development at its US$7.2-billion Khalifa Industrial Zone Abu Dhabi (Kizad), to support the set objective of economic diversification.

Political instability earlier this year in Bahrain has slowed the flow of projects considerably, with the value of projects planned or underway dropping 30 per cent to US$56.6 billion since the end of 2010. However, the government appears committed to push ahead projects to revitalise the economy. Consequently, Bahrain has seen an increase in project awards during the first half of 2011. In Kuwait, despite high expectations surrounding the announced infrastructure development plan, the value of projects dropped by more than a third this year. A number of big projects have been shelved and this has been blamed on the political paralysis between the government and the parliament.

Overall, the region is expected to start benefiting from the large government spending programmes in the latter months of 2011 and in 2012. Provided that the political environment begins to stabilise across the wider region, market confidence should return and result in increased private spending. Infrastructure spending has been one of the key drivers of economic growth over the past decade, and this trend is expected to continue going forward.

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CONSTRUCTION TRENDS

AND OUTLOOK

All sectors of the construction industry in the Middle East continue to grapple with present and future uncertainty. The corporate and business unit levels of industry organisations are being tested as a result of regional and international events. Although there are geographic and sector highlights, in the short term at least, we could be forgiven for thinking that there is little to offer much in the way of respite from the challenges facing the Middle East construction markets. But there are clear reasons for positivity over the medium to longer term: fundamental requirements for social infrastructure still exist, largely as a result of underlying population demographics, and the need to meet these demands in the future will not dissipate. Furthermore, the Middle East’s geographic location offers excellent potential to capitalise on the newly-coined “South-South” (HSBC, June 2011) trade route between Latin America, Africa, Asia and the wider Middle East. Doubtless, there will be construction sector opportunities as a direct result of this trade and increased capital flows between these emerging markets. Infrastructure investment will be essential to facilitate and support these trade routes. In the medium to longer-term, as HSBC’s report rightly states, the Middle East’s foundations in trading will once again act as a spur to country and regional development.

Global events and regional effects

Effects of global economic events continue to be played out and the construction industry often bears a very heavy burden. Consequently, decisions to procure built assets will be influenced by factors outside the control of client organisations. Increasing scrutiny of the sanction decision is understandable as lenders and clients themselves remain cautious, aware that renewed global economic volatility has to bring proportionally higher levels of vigilance. Lending constraints, debt repayment and activities to repair balance sheets amongst other things will exert pressure on client organisations, with consequent effects for market activity and built environment

procurement. Generally, the story of 2011 so far has been one of project reviews and reduced workload in a number of markets. Excess contracting capacity combined with low input costs have not persuaded client organisations to procure built assets in the volume expected, even though this combination should be conducive to supporting the

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financial viability of a development. Those organisations with the ability to proceed with built asset construction at this time will reap the rewards of very competitive pricing.

Market pricing

Comparatively benign conditions now prevail in those markets that experienced the shake-up resulting from the global events at the end of 2008. This precipitated a marked slowdown in many construction markets in the Middle East combined with significant falls in market pricing. Broadly, changes in tender price trends reflect the adjustments to market and sector activity in the region. A collection of countries maintained capital expenditure and it was this activity and momentum that ensured solidity for tender prices in these markets, with some even providing the opportunity for contractors to increase price levels. Conversely, where market and sector activity have been significantly affected, trends in tender prices have ranged from a gradual drift downwards to notable falls in those countries where industry volumes have been materially impacted. Lower demand and excess capacity continue to be evident although regional variations exist in view of the different levels of government expenditure, and also that of the private sector. In those markets that are currently experiencing falling tender prices, any increased momentum in negative trends depends in part on renewed reductions in aggregate demand for construction. For those organisations that are prepared — or have the ability — to procure built assets, subdued tender prices offer reasons to be cheerful. Parts of the contracting sector have been unable to secure any marked increases in prices due to reduced tendering opportunities, very competitive pricing environments and the ability of client organisations to continue to press for the best possible prices, often through negotiation. Although input costs have fluctuated to some degree in the last 12 months, recent softening of tender prices is still evident. Moreover, there are signs that this is extending to the wider GCC region as confidence is tested by short-to-medium-term uncertainty, either due to economic pressures, social unrest or a combination of both. Market data on workload volumes shows that it is only Iraq — and Oman to some degree — that has experienced noteworthy increases in activity this year.

Contractors — and their supply chains too — have experienced onerous trading conditions in the last two years and current circumstances are not much improved.

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The ability of contractors to absorb commercial pressures in the event of any pick up in key material prices is likely to inflict renewed financial strain as prices charged for construction work are driven lower. Continual bidding without the surety of project sanction only adds to the squeeze on finances, increasing non-recoverable costs. Turnover and profit-starved contractors continue their hunt for work in the region, although gaining a foothold in some markets does require additional effort to overcome higher barriers to entry. The financial mettle of contractors and the industry supply chain is being tested to the full. Looking ahead, the danger is that the industry loses good skills, knowledge and capabilities. And it is not just amongst contractors that this will prove to be an issue but consultants too.

Looking ahead

Despite the challenges facing the industry, fundamental requirements for social infrastructure still exist. Underlying population demographics will translate into significant levels of demand for construction services in these areas of social building. The scale and extent of the grand designs and developments of recent years are unlikely to return in the near-term. History shows us that there is a close correlation with the construction of tall buildings and economic recessions shortly thereafter. Nevertheless, sustainable levels of activity will emerge that are based on fundamentally sound investments and sector-specific demand.

Smaller projects will increase in number as a result of tighter risk profiles and lending constraints. Changes in workload activity will not be uniform across sectors — or across countries. Refurbishment and commercial fit-out activity has seen considerable demand for services in this sector. Understandably, businesses will seek to upgrade existing commercial accommodation rather than consider new-build activity. Moreover, a surplus of commercial and residential accommodation in many GCC markets at very competitive rates will entice end-users towards this space solution.

The cost of capital and demand generated by social necessity will be some of the key drivers leading to renewed market activity. On top of this, regional unrest and security concerns could prompt amendments to published development strategies and long-term vision documents, as regional governments seek to address the demands of their populations. At the same time,

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governments must balance their expenditure against income, and for oil-producing countries a large proportion of this income is determined by the global price of oil. There are as many forecasts amongst economists for the price of oil to increase as there are for it to go down. It is still the case for these countries that income therefore is determined by events elsewhere in the world. One certainty is that government expenditure acts as a central pillar of construction activity in the Middle East, as governments seek to implement the facilitators of economic growth and related strategies for economic diversification. Furthermore, there are clear links to private investment on the back of public sector expenditure. Particular markets are experiencing reduced volumes of government expenditure and private sector investors therefore remain cautious, mindful of the significant falls in real estate prices over the past two years in many GCC countries. Medium-to-long-term trends will evolve to create regional construction demand. Assuming Saudi Arabia’s latest spending plans remain largely unaltered which maintains its construction momentum, Qatar’s World Cup 2022 investment programme kicks off and many of the suspended projects in other GCC countries recommence as developers attest, the prospect of a quicker pick-up in tender prices becomes feasible. Increased confidence and the psychology of pricing on the back of higher work volumes will see prices increase accordingly, though variation by market will remain. Any improvement in global economic conditions in the short-to-medium-term will be a bonus.

Additional considerations in respect of this pricing transition include reduced contracting capacity in the region as a result of strategic business reviews, a spike in the volume of tendering activity and an increased demand for professional expertise. But continued attention to cashflows and finances may mitigate the speed of construction on re-started schemes. Extended project programmes should therefore create a steadier demand for labour and materials and possibly offset any restart pricing spike.

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Considerations for project success

Uncertainty increases the need for awareness and monitoring. Some of the key issues to ensure active management of projects include:

Entry and exit prices: Lower prices can be an

opportunity for clients but at the same time they introduce risk. Too much focus on achieving the lowest price should be counter-balanced by an acceptance that higher transaction costs in post-contract administration may follow.

Risk transfer: A willingness by contractors to accept a

wider transfer of risk in the hope of winning work will stretch business fundamentals. In short, incentives for contractors to maximise post-contract returns because of excessive risk transfer should be minimised. It is not only in hard financial metrics where incorrect transfer of risk manifests itself — project team morale can suffer and this in turn affects project performance and quality.

Scenario planning: Uncertainty and volatility in markets

require greater attention to the assessment and modelling of the financial viability of developments.

Risk management and removing sources of uncertainty:

Design completion, supervision, finding the right people, procurement options and interface risks are all areas for consideration.

Contractual provisions: With heightened risks related

to the supply chain’s financial standing, it is imperative to include contractual provisions that ensure the financial stability of the supply chain. Security can be achieved through adequate warranties and performance guarantees.

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ARTICLES

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IS THIS THE DAWN OF

TRULY INTEGRATED

PROJECT DELIVERY?

Sir Edwin Lutyens, the major 20th Century British architect, once described production information as “a letter to the builder, telling him exactly what you want him to do.” In 1965, a Tavistock Institute report quoted a Royal Institution of Chartered Surveyors (RICS) meeting from 1910, which stated “Architectural information is invariably inaccurate, ambiguous and incomplete.” By the 1940’s, the impact of this inaccuracy and ambiguity was valued at an additional 10 per cent to the construction cost. The UK’s Building Research Establishment (BRE) undertook research in the 1970’s that led to the Coordinated Project Information (CPI) initiative. This established codes of procedure for production drawings, project specifications and the common arrangement of work sections for building works in 1987. By 1994, the Latham Report “Constructing the Team” along with the subsequent Egan Report “Rethinking Construction” (1998) and “Accelerating Change” (2002), suggested that waste in the industry accounted for 25-30 per cent of project costs. At this time, the UK’s Department of Trade and Industry established a programme called “Avanti” which sought to formulate a collaborative approach between construction project partners. This led to the creation of the construction industry membership organization Constructing Excellence in 2003.

Within the design world, technology was also having a direct impact. In the 1980’s, Computer Aided Design (CAD) programs were being released that reduced significantly the need for draftsmen. Autodesk Inc. released its first version of AutoCAD into the market using the DWG R1.0 format in 1982. This software was both affordable and capable of being run and operated on personal computers, thus allowing designers to do their own drafting work, eliminating the need for entire departments. CAD sits within a suite of activities known as digital product development (DPD) that operates within the product lifecycle management (PLM) process. It is used with other tools, which can be integrated modules or standalone products, such as:

– Computer aided engineering (CAE) and finite element analysis (FEA)

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– Computer aided manufacturing (CAM) linked to computer numeric control (CNC) machines – Photo realistic rendering/rapid-laser scanning – Document management and revision control using

product data management (PDM)

AutoCAD 2012 is the 26th version of the original software product. It is joined by a number of other complimentary solutions, Revit, and competing systems, including Bentley’s Microstation through bespoke design house software like Gehry Technologies Digital Project, down to Google’s free SketchUp product which provides 3-D modeling for everyone. 3-D design and software capability are now commonplace, not only in media production and other industries, but also within the built, natural and social environments.

Integrated project delivery is an approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimize project results. This increases value to the client/owner, reduces waste and maximizes the efficiency through all phases of business case, design, fabrication, construction and operation. The convergence of technology, culture and process has given birth to the notion of Building Information Modelling (BIM). Although relatively new to the construction industry, 3-D modeling in the sense of BIM, has been used in other industries for a significant period of time.

With rapid growth in the uptake of BIM, the numbers of designers, constructors and clients with direct experience with BIM is growing significantly. As a minimum, savings with 8-10 per cent of construction cost can be saved through the elimination of conflicts, constructability and reduced change orders. The true benefit of BIM across the whole-life of the asset has yet to be realized though, particularly has integrated with a facility management (FM) strategy.

So apart from leveraging IT hardware and software, what does BIM offer and is it the missing link in delivering truly integrated project delivery?

BIM: The basics

BIM is set to revolutionalise building design and construction to a point where many traditional functions

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effectively become obsolete. Most people agree that BIM is introducing new ways of working for design and construction teams — and those who cannot or will not adapt will fall by the wayside.

BIM is often thought of as a design tool similar to CAD. In reality however, BIM or Information Modelling (IM) of any asset, is founded on a set of shared, structured and coordinated pieces of information — whether in the vertical built environment, or in horizontal infrastructure. Once created, this information can be used by many and all parties involved in that asset from its inception through design, construction, operation and recycling. The richer and more integrated with BIM, the greater the potential benefit. Many applications can currently be run and operated using BIM, including design drafting, analysis, clash detection, manufacturing and construction sequence simulation. Once operational, the asset BIM model can also be used as the basis for monitoring, managing the operation and maintenance, modification and refurbishment of that asset, updated on a continual basis over its lifetime. Indeed, with the integration and use of rapid laser scanning/cloud point rendering, not only will the digital design data be preserved and used dynamically over the assets life, the as-built data can also be captured, finally resolving the inevitable variances in construction tolerance and use that occur between design and construction.

These technologies therefore represent the next stage in the development of 2/3-D CAD. They provide a step change in the ability of design and construction teams to structure and exchange information. The benefits go beyond enhanced design coordination, reduced design costs and improved communications and information exchange across all players and disciplines in the project.

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By requiring different design and construction disciplines to collaborate on the development of a sophisticated, information-rich, digitally-based model, designs can be developed and tested “virtually” and many potential problems can be designed out or avoided completely. The benefits are then not only in more efficient and effective design and construction processes, but ultimately in better assets that are more fit-for-purpose and meet their brief requirements and design intent.

Conventionally, a good deal of design and construction work is document-based. Information is communicated and stored via a variety of drawings and reports that, despite being stored and distributed in digital form, are essentially unstructured and thus of limited utility. Not only is this information unstructured, it is also held in a variety of forms and locations, and there is considerable potential for data conflicts and redundancy as well as risk to data integrity and security. By providing an intelligent, digital structure for project information (link back to CPI) and ultimately a means by which it is held centrally in a single model — BIM opens up a wide range of possibilities for improvement. These include better ways of generating, exchanging, storing and re-using project data between different design and construction disciplines through the life of the asset. In this sense, BIM is as much a process of generating and managing project data throughout the lifecycle of the asset, as it is the digital model itself. That is why BIM is sometimes referred to as BIM(M) — Building Information Modelling and Management.

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BIM essentials

The digital project model at the heart of BIM is usually created by software using “object” technology. “Objects” are essentially digital representations of physical components or more abstract entities (eg spaces). In the past, different software providers tended to have their own ways of defining and handling objects, so their systems and the information contained within them, were not “interoperable.” Interoperability — the effective exchange of information — is key to BIM. Because of that, a good deal of work in the software industry has been devoted to developing standard definitions for objects that ensure they are interoperable across different systems and tools. One such set of definition, called industry foundation classes (IFC’s), is becoming more widely used in construction.

Objects are important because of the information and data that they contain and attributed to that object. This includes how they relate to other objects (parametric information). Such information is not only dimensional, but can relate, for example, to thermal performance, carbon emissions, cost, repair and replacement cycles, and so on. Objects are therefore the information-rich “building blocks” of design and construction and can be used well into the operating stages of projects. They can also be stored in digital libraries and re-used and refined on other projects.

Key BIM benefits

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The benefits of BIM derive fundamentally from the way in which all parties to the project can contribute to the central data model, and all can draw information from it. It has the potential to improve many functions, from checking compliance with building regulations or codes, through design, cost estimating, work scheduling, fabrication, assembly and construction through to operations, FM and even decommissioning and demolition. Significant benefits are claimed for BIM, particularly when working in a genuinely collaborative way using a single digital model of the project — totally integrated project delivery.

The following benefits of BIM include:

Design: Improved coordination of design and

deliverables between disciplines; improved project understanding through visualization; improved design management and control, including change control; improved understanding of design changes; and implications through parametric modeling.

Compliance: Ability to perform simulation and analysis

for regulatory compliance; ability to simulate and optimize energy and wider sustainability performance.

Costing/Economics: Ability to perform cost analysis and

to check for adherence to budget/cost targets; ability to understand cost impacts of design changes; improved accuracy and transparency of cost estimates.

Construction: Reduction in construction risks through

identification of constructability issues early in the design process; early detection and avoidance of clashes; ability to model impact of design changes on schedule and programme; ability to integrate contractor/ sub-contractor design input directly to the model.

Operation and management: Creation of an FM

database directly from the project (as built) model; ability to perform FM costing and procurement from the model; ability to update the model with real-time information on actual performance, thus enabling predictive analysis and pro-active asset management. The financial impact of all these benefits, taken together, could be considerable. A recent McGraw Hill report,

The Business Value of BIM in Europe, 2010, looked at

user perceptions of BIM in the UK, France and Germany, concluding that the majority of users believe that they are getting positive return on investment (ROI) in BIM, and also that the business benefits of BIM have not yet been

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realized in full. In the UK, most discussions about BIM still relate to its use during the design stages of a project, sometimes referred to as “little BIM.” In other countries, its implementation is more advanced, particularly in Scandinavia, USA, Australia and more recently, South Korea.

In recognition of the differing levels of development in markets, UK-based BIM experts, Mark Bew and Mervyn Richards, developed a maturity model in 2008 which has been widely adopted by the industry.

BIM Maturity Model

The BIM maturity model shows how users can move from use of un-coordinated CAD drawings through various levels of technology and information-sharing, to reach the ultimate objective of fully integrated project delivery. Each stage in maturity represents an opportunity to increase the effectiveness of information exchange and re-use. The model helps to explain why the development of BIM competence is so important in accelerating the realization of BIM’s business benefits.

Such a significant change in the way that assets are conceived, designed, delivered and managed, does come at a cost and therefore requires both public policy and market dynamics, to facilitate the change.

In Singapore, the government provides assisted funding through their Construction Productivity and Capability Fund (CPCF) with a specific funding provision for BIM. This is designed to support and encourage adoption with assistance provided for improving business process, training, consultancy, software and hardware costs for firms registered to undertake business within Singapore.

Source: Bew and Richards 2008

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With a clear purpose to incorporate BIM into two levels: – Firm level scheme — enhance business capability

around visualization, value-added simulation, analysis and documentation; and

– Project collaboration scheme — support business capability in BIM project collaboration to reduce conflicts and expensive reworking of design, construction and specification downstream. Funding is provided up to a ceiling of US$105,000 per business.

From 2015, the use of BIM will be compulsory on all UK government projects, which form a part of a series of cost-saving/efficiency measures for the public sector.

Davis Langdon’s role in BIM

Davis Langdon is a long-term investor, alongside construction software developer Causeway, in the development of specialist software, CADMeasure and BIMMeasure, which automates many manual aspects of the cost management service. We have completed the development of BIM-compatible software which not only integrates the BIM model database, but which also creates automated links between the BIM model and the client’s budget plan. At this stage in the evolution of the commercial and contractual models, we think this is the optimum position for a cost and project manager to hold commercially-sensitive data. However, as clients engage more actively with BIM and applications and datasets develop and mature, we will be prepared and positioned to merge and attribute our own data, information and knowledge into the “objects” thus enhancing the richness and integration of the model and driving further benefits from the creation and ownership of the asset.

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COST-EFFECTIVE CARBON

REDUCTION

The construction world is still guilty of a large amount of green tokenism, with projects wearing their environmental credentials like a badge of honour. There are those that have made the effort but seem to have got it all a little wrong — wind turbines that do not turn, green roofs that shrivel under the sun, bicycle racks with no bicycles. And at the same time, there are those that seem to disregard issues like climate change and resource efficiency as though they are “someone else’s problem.” Of course there are some that manage to find a subtle but important balance of time, cost and quality whilst also balancing social, environmental and economic drivers. These are the projects that should be applauded.

One of the failings of the sustainability movement has been the over emphasis on the need to drive change on the basis that it is “the right thing to do.” A change programme driven through guilt or a sense of obligation (or unbridled enthusiasm in many cases) will touch many people, but it is not universal and will also leave many excluded. There has become a link between sustainable design and the “greater good” which for many, simply equates to a cost for which there is no immediate or tangible benefit.

C ST-

EFFECTIVE

CARBON

REDUCTION

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At Davis Langdon, we are repositioning our approach by introducing a new language to help find our client’s better solutions. Instead of focusing on attaining sustainability credits on an artificial rating scheme, we want to focus more on the business case. We want to help our clients understand the real costs and business benefits so that when a choice is made, it is done for the right reasons. Of course, neither is it easy nor always appropriate to consider all decisions in terms of cost and benefits, but the more we do, then the more we will start to find better solutions over the life of an asset. Probably the best place for a business-led approach is when considering energy and carbon, for which there are a few inescapable truths:

The rising cost of energy: Whilst beyond discussing the

drivers for energy costs and their subsequent rate of change, few would disagree that we are expecting to see long-term global increases in the cost of energy.

Building non-performance: The evidence is now

overwhelming to prove that buildings consume more energy than their design standards (often 20 to 30 per cent more than forecast). The grounds for this are complex, not least because it is people that use much of this energy rather than the building itself. If we are to drive down energy

consumption, we need to tackle these elements1.

Technological developments: Technology is rarely the

barrier it once was as we have tried and tested solutions which we can pick from. Possibly more challenging is picking your way through the myriad of potential solutions to arrive at the optimum.

Climate change: Maybe it is a little strong for some to argue

that climate change is an “inescapable truth,” but many now accept it and in doing so, we must accept the need to adapt our buildings and our behaviours, to these changing climatic conditions, or face the long-term economic and social consequences.

In addition to the above, many governments around the globe are putting low-carbon strategies at the centre of their manifestos, resulting in a plethora of carbon taxes and support packages — each of which can dramatically change the economic case for a low-carbon solution. Energy and carbon could be seen as a risk. Do nothing on your new and existing buildings and your annual operating costs will increase. Conversely, take the right action and there are investment opportunities which can deliver

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long-term savings. We encourage clients to see these as investment opportunities, setting a hurdle Internal Rate of Return (IRR) which this investment should meet.

With a focus on carbon and energy, we have identified seven priority areas to focus on. Each of these areas presents an opportunity to reduce risk, reduce cost and reduce carbon:

Financing: Ensuring taxation strategies are efficient and

all grant sources are maximised.

Energy supply: Optimising the energy supply strategy,

including low-carbon technologies.

Occupiers: Engaging with building users to educate and

inform about energy use and targeting long-term staff retention (staff churn is often a very large business cost).

Workspace: Ensuring efficient space use, and ensuring

that the space is highly productive.

Transport: Ensuring low-carbon, high-quality, safe and

reliable access to and from the building.

Operations: Ensuring all Building Management Systems

(BMS) are optimised, effective data capture for monitoring and continuous improvement (few buildings are right first time), effectively procured and monitored facilities management.

Construction: Ensuring that all of the above are

adequately considered in early design — especially the issue of future building use and adaptation.

FINANCING ENERGY SUPPLY OCCUPIERS CONSTRUCTION OPERATIONS WORKSPACE TRANSPORT

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How does one turn these areas into the

best business opportunity?

Marginal Abatement Cost Curves (MACC) is a simple tool we use to help visualise all of the variables in a simple structure.

MAC curves compare the effectiveness (carbon saved) of a measure with its cost effectiveness. They are a way of representing a range of investment options that allow you to prioritise and make informed decisions about which measures to implement. They can be used when looking at a programme of improvements on an existing building or portfolio, or can be used to test different options on a new scheme.

Features illustrated by the curve include: – Relative cost-effectiveness of measures. – Lifetime CO2e saved by each measure.

– Likely scale of capital cost required to achieve a target carbon saving.

– Lifetime financial payback.

This becomes particularly powerful when you compare investment options between different properties in a portfolio. MAC curves help to answer the two key questions of carbon reduction:

– What should I do first? – What is the business case?

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In summary, we need to move the industry beyond a checklist approach to low-carbon solutions. Instead, we need to think about the long-term (whole life) costs and benefits of different options to ensure these assets are viable, efficient, attractive and “sustainable” buildings well into the future.

1 Davis Langdon and AECOM are part of the CarbonBuzz consortium

developing a web-based tool that helps designers understand and tackle the issue of energy non-performance. www.carbonbuzz.org

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DEVELOPMENT

MANAGEMENT —

CREATING A BANKABLE

SCHEME

Development management deals with the coordination and management of the property development process, in line with agreed stakeholder objectives which are defined at the outset, to help define development use or land enhancement, usually for profit and/or socioeconomic reasons. Its success of this lengthy process depends on the development manager’s skill and ability, to assess and guide the project as it progresses and changes over time. Development management considers the performance of a project when measured against key drivers, which vary from project to project. Examples common to all projects include risk, cost, time, quality and design. A project’s performance guides decisions relating to how investors can achieve their desired returns or whether other stakeholders could be interested in participating, such as a hotel operator, or retailer for example.

This Middle East market still remains very challenging where revenues have declined and purchasers, tenants and retailers, demonstrate more caution before committing. Raising finance or investment for a developer and purchaser/tenant alike, is one of the biggest issues and the development manager helps address these concerns on behalf of the stakeholders, through their network of relationships. Enabling our clients to benefit from a full understanding of all factors affecting the financial performance of the project as well as driving the top team mentality across the client’s team in all that they promote, culminates the creation of a bankable project in the eyes of funders and investors to help drive development success. Development management is often too closely linked to the performance of the development appraisal itself, without considering broader issues, which in the current market, may actually support the viability of a project. However, whilst the appraisal is the most significant part of the process, the way in which the appraisal is informed is equally as important, whilst guiding the wider team through the stages in alignment with the overall development vision. Appropriate planning, starting with the end in mind, that links to the exit strategy for an investment, whether

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short or long term, is key to success. Many developments are poorly planned and therefore destined for failure.

Development planning milestones

These stages transform a vision into a viable project: 1. Initiation

2. Development concept and due diligence 3. Feasibility study

4. Planning and finance

5. Implementation and construction 6. Lease/operate and/or sale

These stages often overlap to varying degrees and may have to be repeated until a decision can be made that is aligned to the investment criteria.

Developing a viable scheme

If the fundamentals are covered at the outset of a project, this creates a strong foothold for developing a viable scheme. These include assembling the professional team, developing a high-level master programme, obtaining a cost model of construction rates on a gross floor area basis (developed as the design and appraisal progresses), commissioning a market study and establishing revenue streams.

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To continue on the right track, the following should be considered throughout the development process: – Market demand and revenue streams — where are

these coming from and who is the target market? – Establishing the best product/asset mix.

– Operational and management structure for the asset life. – Establishing project key performance indicators (KPIs)

for the development. Internal rates of return, discounted cash flow, net present value, yields and debt equity ratios should all be determined at the outset. KPIs will vary, depending on the performance of each asset and the revenue and construction inputs.

– Finance and funding strategy — engage with institutions, explore latest lending costs and

arrangement fees, identify which institutions are lending and investing in this type of asset.

– Construction methodology — how will the asset be procured and constructed?

– Sustainability in design and operational costs.

– Developing a phasing and delivery programme which has realistic durations and income generation dates. – Generating a letting and sales programme and a date

that delivers the product to the market, thereby meeting the projected absorption rates.

– Establishing the legal costs associated with the development, including setting up of special purpose vehicles or specific investment options.

– Finance-led design that is viable for the project — focusing on what the project can afford.

– Capital values — establishing the true revenues and occupancy levels in order to ascertain the capital value. Running a range to test sensitivities of the development. – Development strategy — develop and hold or develop

and exit (three, five, seven, ten years or longer). – Establishing management companies for long-term

operation.

– Setting in motion any pre-let activity in line with the long-term leasing strategy.

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Developing the appraisal

The demand for property does not automatically exist. Before embarking on a project, an initial understanding of market demand is essential. Market research determines the initial mix and asset uses for a site. Market research also defines the end user’s requirements which form the basis of the development process, informing areas, quality standards and achievable revenues. Considerable skill lies in using this information to deliver the right product at the right cost and at the right time with an emphasis on: – Developing a project that will support economic growth

and diversification.

– Taking account of social and cultural responsibilities as well as commercial gains.

– Identifying potential social economic impacts — job creation and community enhancement opportunities. – Stimulating long-term investment and growth. – Interconnectivity and a correctly positioned product

that complements the existing or proposed wider developments.

– Identifying utilities and transport strategies early, setting in motion the implementation to meet the proposed phasing plan.

– Achieving cost-effective design, procurement and construction.

– Establishing the status of other third party developments, thereby identifying competitors.

Davis Langdon’s expertise

Davis Langdon has strong global relationships at all levels of the development supply chain, from financiers through to contractors and subsequently end users. This enables us to provide a holistic solution to development from business strategy through to operation of the final built product — an approach which has not yet been seen in the Middle East market.

Our aim is to agree KPIs with clients which align with the fundamental success criteria for a particular project or programme, and form a business partner culture where we guide, inform and support, to ensure the right decisions are made at the right time and by the right people.

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With lowering returns across the region and a drive for quality from the end user, developers need to plan carefully before committing. Tight funding means they also need to understand the funding criteria required to support development, while acknowledging that a feasibility report is only theory, until actually delivered to the end user. We specialise in every commercial aspect of development, be it time, cost or quality related, helping to set and inform the feasibility through our vast experience of delivery. We bring global relationships with joint venture partners and funders to the table, and align their investment criteria with client KPIs where possible.

Our robust teams work alongside “business partners” every step of the way, from the initial idea, through finance, delivery and operation to ensure the delivery of viable schemes.

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