1 INTRODUCTION
Buildings are accountable for a large part of the yearly energy consumption of many nations. Within the European Union the energy consumption of the residential and tertiary sector is more than forty percent of the final energy consumption. The energy consumption of this sector is even bound to increase (EC 2002). According to Campbell the annual energy consumption of offices in Northern Europe varied between 270 and 350 kWh/m2 (1988). In European office buildings the annual energy consumption ranged thirteen years later from 100 to 1,000 kWh/m2 (McNicholl & Lewis 2001).
Governmental and commercial organisations feel the need however to lower the energy con-sumption of their real estate, because of increasing energy prices and the aim to reduce green-house gas emissions. By gathering information on commercial real estate objects and their con-sumption patterns, a strategy to effectively lower energy use and water concon-sumption can be developed.
The inventory of buildings can take place by using the methodology of Santamouris et al. (1994) that distinguishes five kinds of information to analyse the energy consumption. Although these kinds of information are necessary to determine the potential for energy conservation and to investigate the possible limitations of energy saving technologies, it does not offer the neces-sary insights in the financial aspects of energy saving investments or investments that improve the sustainability, to convince the facility management of their necessity. Therefore in this re-search information on facility costs was incorporated in a new assessment framework. This framework was applied to three Dutch commercial real estate objects.
2 METHODOLOGY
In the initiation phase of this research project the curiosity for what is known by the user about the building’s sustainability, maintenance costs, energy use, and water consumption of-fered a new perception on analyzing commercial real estate objects historically. Interviews were
Directing sustainable investments in commercial real estate
A.G. Entrop & H.J.H. Brouwers
University of Twente, Faculty of Engineering Technology, Department of Construction Management and Engineering, Enschede, Overijssel, The Netherlands
ABSTRACT: This paper focuses on the facility costs, energy use and water consumption of commercial real estate. A framework consisting of four components is established in which the performances on these three aspects are analysed. By using the first, second and third part of the framework suggestions for reducing the energy and water consumption can be given. The build-ing related facility costs form the fourth component, which make it possible to give a more pro-found direction to cost-effective sustainable measures. The framework was applied to three Dutch office buildings from comparable age with a floor area up to 37.890 m2. The combination of qualitative, quantitative and financial analyses can be an useful instrument for facility man-agers to manage and reduce facility costs effectively.
taken with the wardens of the objects to get information on their view on its sustainability and their experiences with making the object more sustainable.
By taking interviews among the wardens it was experienced that many maintenance activities are not a result of diagnosed shortcomings, but that they often consist out of repairs. These more or less ad hoc repairs will not follow a defined process in which a broad scale of alternatives are weighed, but just need instant guidelines. The investments, that follow out of repairs or recog-nized shortcomings, need a methodology that encompasses the five kinds of information in the methodology of Santamouris et al. (1994) and that is easier to apply than the existing methodol-ogy incorporated in TOBUS of Caccavelli & Gugerli (2002) for example. Therefore, an assess-ment framework was developed that consists of four components.
2.1 Description of the building
In this component the utilization, functional design and magnitude of the building are derived. The most important variables to get acquainted with the building and to relate its performance on energy use, water consumption, and facility costs, are: the year of completion, its location, the number of employees, the number of workplaces, the number of full time equivalents, the gross floor area, the net floor area and the rentable floor area. These figures will form the base for further analysis of the object.
2.2 Qualitative analyses of the building’s sustainability
The applied sustainable techniques or design methods are categorized by using a triad approach for five aspects, namely the Trias Energetica for energy use, Trias Hydrica for water consump-tion, Trias Hylica for applied materials, Trias Toponoma for land use, and Trias Poreutica for transport (Brouwers & Entrop 2005). These five aspects all contribute to the environmental im-pact of a building, but it is not necessary to compute the exact environmental imim-pact of every measure within each aspect. The triad approach offers a three step sequence in creating a sus-tainable built environment to which the applied measures can be assigned: (1) Measures to re-duce the consumption of or demand for the specific aspect; (2) Measures that fill in the remain-ing demand with sustainable or renewable sources as much as possible; (3) When there is still a need for more sources, then apply measures that use unsustainable sources in an efficient way. 2.3 Quantitative analyses of the building’s consumption patterns
In the third component of the assessment framework the energy use and water consumption of the object will be assessed. Derived data are compared with performance indicators for the av-erage Dutch energy use per square meter of offices larger than 10,000 m2 and water consump-tion per employee and workday.
To assess the water consumption of the building two different indicators can be used. The as-sessment computer program Greencalc takes an average water consumption of 24 to 50 litres a workday for each employee into account (Van der Linden et al. 2000) and a national guideline mentions 20 to 30 litres per workday for each employee (SenterNovem 2006).
The energy use for heating is in the Netherlands normally expressed in cubic metres natural gas with an average caloric value of 33.41 MJ/m3. The indicators for energy consumption are based on two Dutch studies (see Table 1). The first study was executed among thirty-three of-fices of more than 10.000 m2 in the period 1989-1993 (Novem 2003). In 2003 a second study examined thirty-two offices larger than 10.000 m2 (SenterNovem 2006).
Table 1: Energy consumption of Dutch office buildings for the top twenty percent, the median, and lowest twenty percent of the observations (Novem 2003, SenterNovem 2006).
Type of office Natural gas consumption
(m3/(m2·year)) Electric energy use (kWh/(m2·year)) Number of objects research Year of
Percentage of observations 20% 50% 80% 20% 50% 80%
Offices > 10,000 m2 5 11 16 36 82 146 33 ‘89-‘93
2.4 Financial analyses of the facility costs
The facility costs of the research objects are benchmarked to assess if certain sustainable meas-ures are preferable from a cost-effective point of view. The used reference for this benchmark was provided by the database FACANA, which is a contraction of FACility ANAlyses. The da-tabase was developed by Twynstra Gudde in 1991 and has been regularly updated ever since. Nowadays it contains the facility costs of more than 200 Dutch organizations. The offices have a total floor surface of more than 4,800,000 m2 (Janssen & Konickx 1991).
The costs per workplace are by Facana divided in two categories: (1) object related facility costs and (2) organisation related facility costs. The costs per workplace in the first category in-crease, when the number of employees increases. The organisation related facility costs per workplace decrease, when the number of employees increases. Only for the second category of costs there seems to exist a quantum advantage.
3 DESCRIPTIONS OF THE CASE STUDY OBJECTS
To test the assessment framework three case study objects were selected within the tertiary sec-tor. The objects needed to be larger than 10.000 m2. This size was given by the already men-tioned standard norms of SenterNovem. A second selection criterion was that the objects needed to be of almost the same age, because of time depending building regulations.
The selected case study objects are all three located in The Netherlands and were completed in the nineties of the last century. Although building regulations required a minimal Energy Per-formance Coefficient for offices from the beginning of 1995 (Official Journal 1995), it was only the required minimal thermal resistance of 2.5 (m2·K)/W for the building shell originating from 1992 that could have been of influence on the building plans of the two youngest objects (Build-ing Code 2003). The build(Build-ing and renovation activities on the second case object started in 1989, therefore its building shell has a higher thermal transmittance than the two other case ob-jects. General information for this first component of the case study has been brought together in Table 2.
Table 2: General information on the three case objects derived in the first component of the framework.
Object 1 Object 2 Object 3
Year of completion 1995 1993 1996
Location Utrecht Rotterdam Hengelo
Number of employees 1,200 1,000 600
Number of workplaces 1,320 1,050 640
Number of full time equivalents 1,150 950 550
Gross floor area 37,890 m2 26,918 m2 16,087 m2
Net floor area 34,664 m2 22,314 m2 14,725 m2
Rentable floor area 30,439 m2 18,258 m2 13,500 m2
The floor area of the objects can be obtained unambiguously by using standard determination methods (NNI 2001). However, only for the second object an official report was available on the size of the floor area. In the Netherlands it is common practice to offer a rentable floor area of 85 or more percent of the gross floor area (Van der Woude & Pijpers 1997), but all three ob-jects have a smaller rentable floor area of respectively 80.3, 67.8, and 83.9 percent.
4 QUALITATIVE ANALYSES OF THE CASE STUDY OBJECTS
The three office buildings were analysed using a qualitative approach based on the five aspects of the triad approach. The results of these analyses are shown in Table 3. It can be noticed that of all aspects energy receives the most attention, although the use of sustainable or renewable energy sources is limited.
One measure regarding the Trias Hylica has a paradoxical contribution to the objects’ sus-tainability. Using a dynamic no break system to guarantee the power supply will result in a
higher electric energy use than a static no break system. On the other hand a static no break sys-tem uses batteries with a high environmental impact compared to using a fly wheel. In this case it is assumed that the environmental impact of batteries overshadows the extra electric energy use. Therefore these techniques are considered to be materialistic measures and not energetic measures within the Triad approach. The application of measures to come to sustainable water consumption, transport, and land use is limited for all three steps of the triads.
Table 3: Applied sustainable measures within the objects categorized according to the triad approach.
Trias Step Object 1 Object 2 Object 3
1 -Transformers for electric
energy are on top floor No measures applied -Heat recovery by using heat wheels 2 -Climate windows -Natural day light in the
entrance by using a mirror No measures applied
T ri as En er ge tic
a 3 -EFF1 engine air treatment -Elevators return electric energy to the network -Mechanical valves within central heating system -External heat delivery to heat the object
-External heat delivery to boil water on three floors
-Energy saving lights in
restrooms -Individual possibilities to regulate room temperature Energy saving light bulbs
1 -Flexible division of office
space -Flexible division of office space -Flexible division of office space 2 No measures applied No measures applied No measures applied
T ri as H yl ic a
3 -Reuse of art within façade -Reuse of cooling liquid -Dynamic no break system
-Reuse of the construction originating from the fifties -Dynamic no break system
No measures applied 1 No measures applied No measures applied No measures applied 2 -Green roof with sedum No measures applied -Semi-hardened parking
lot to absorb rain
T ri as H yd ri ca
3 No measures applied -Reuse of cooling and
hu-midification water No measures applied 1 No measures applied No measures applied No measures applied 2 No measures applied No measures applied -Bicycle shed employees
T ri as Po re ut ic a
3 No measures applied No measures applied No measures applied 1 -Semi-underground
park-ing space No measures applied No measures applied 2 No measures applied No measures applied No measures applied
T ri as T op on om a
3 No measures applied No measures applied No measures applied
5 QUANTITATIVE ANALYSES OF THE CASE STUDY OBJECTS
This part of the assessment makes it possible to look at the energetic and water performance of the objects and their employees. The smallest actual natural gas consumption can be found at the smallest object valuing 6.2 m3/(m2·year). Object 1 consumes 8.1 m3/(m2·year) of natural gas. Object 2 consumes 7.0 m3/(m2·year) of natural gas. The standard value of 60 m3/(m2·year) (SenterNovem 2006) seems to be too high compared to the findings in this research and com-pared to the standard of 11 m3/(m2·year) (Novem 2003). The actual natural gas consumption of the case objects almost equals this last standard value.
In Figure 1 degree days and actual energy use for heating are brought together. In 2004 and 2005 the difference between case 1, 2, and 3 seems to be constant. In the year 2006 the energy use of case 2 rose significantly. Although the outside temperature was lower than the tempera-ture in the preceding two years, it is hard to relate this higher energy consumption solely to that fact.
Figure 1: Monthly energy use for heating per object in relation to monthly Dutch degree days.
The natural gas consumption per employee shows a different order in efficiency than the natural gas consumption per square meter. The second case object uses less natural gas per em-ployee than the third case object during several months in 2004 and 2005. The natural gas con-sumption per employee of the first object exceeds the natural gas concon-sumption per employee of the two other case objects. The higher natural gas consumption of object 1 can be explained, be-cause of the presence of a large auditorium and an entrance with a larger volume than case ob-ject 2 and 3.
The real electric energy use of case 3 approaches with a value of 80 kWh/(m2·year) the men-tioned standardized values of SenterNovem. The electric energy use of case 1 of 162 kWh/(m2·year) is exceeding these values. Case 2 uses with 23 kWh/(m2·year) only a fraction of the standard electric energy use. The monthly electric energy use is during the year more stable than the monthly natural gas consumption (see Figure 2). The electric energy use of object 1 ex-ceeds the standard value with 100 %. Case 2 is supplied with over 600 electric heaters, but only in 2006 the electric energy increased presumably to come to a comfortable indoor temperature.
Figure 2: Monthly actual electric energy use per object. !
! !
The monthly electric energy use of case 3 was not known till September 2004 and therefore the yearly electric energy use given by the energy bills was divided by twelve. When the data on the electric energy use are corrected for the number of workplaces, employees, and full time equivalents the values per case change in proportion to each other, but the hierarchy in effi-ciency does not differ.
The water consumption of the cases is according to the standardized values of SenterNovem related to the number of workdays and employees. The largest object consumes annually 8000 m3 water, but it has not the highest total water consumption. Case 2 and 3 are exceeding the av-erage values on water use with their water consumption of respectively 10,000 and 5000 m3/year. The consumption of case 3 is nearer to the average theoretical value than case 2. The monthly water consumption of each of the objects is strongly fluctuating (see Figure 3).
The figures per employee and per square meter gross floor area show that object 2 has the highest consumption and object 1 the lowest. With approximately 250 workdays a year the wa-ter consumption differs from 26.4 to 41.8 liwa-ter/(person·workday). Per square mewa-ter the wawa-ter consumption ranges from 209 to 389 liter/year. The range of the standard values of 20 to 30 li-ter/(person·workday) (SenterNovem 2006) seems to small. Values of Van der Linden et al. (2000) better match the results of the case study.
Figure 3: Monthly water consumption per case object.
6 FINANCIAL ANALYSIS OF THE CASE STUDY OBJECTS
The financial analysis is performed with help of the Facana benchmark. By giving the number of workplaces this benchmark tool is able to calculate the facility costs of one workplace and per square meter. The Facana benchmark uses for its computations a standard gross floor area of 28.7 m2 per workplace, before calculating the costs per square meter. Case 2 and 3 offer a gross floor area of approximately 25 m2 per workplace. The expectation is that this will result in lower actual object related facility costs than the facility costs calculated by Facana. The actual size of a workplace in object 1 equals the standard size of a workplace in Facana.
In case of object 1 the total annual facility costs are € 14,920 per workplace. A workplace in object 2 costs € 14,701 per year and in object 3 € 14,370 per year. In general the total theoretical facility costs per workplace are increasing when the number of employees is increasing. The costs on energy use and water consumption account with an absolute value of approximately € 14.90 for 4.7 to 5.8 % of the object related facility costs. The total object related facility costs are, according to Facana, around € 280.- /(m2·year). Depreciation and mutations account for seventy to eighty percent of the object related facility costs.
The actual facility costs were derived for two objects in 2002. That year the facility costs for case object 1 were € 18,210,000.-. The expenses on the second case object were € 9,513,000.-.
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For the third case the actual facility costs were not available yet. For this object it was only pos-sible to fill out five of the twenty cost subjects that form the total facility costs. The total costs on taxes, energy use, water consumption, refurbishment, maintenance activities, and insurances were in 2006 € 1,727,000.-.
Analysis of standard facility costs and actual facility costs showed that financial benefits of energy and water saving measures can only influence a marginal part of the total building re-lated facility costs. The direct building rere-lated costs like depreciation and mutations are ac-countable for 70 to 80 % of all building related facility costs. Regarding this composition of the costs, sustainable measures that increase the market value of an object or that make the object more flexible in adopting future mutations, have a potential to be cost effective.
7 DISCUSSIONS
In this paper a new framework was presented to obtain favourable investment opportunities re-garding building related sustainable measures for the facility management of commercial real estate. New components in this framework are qualitative analyses and financial analyses.
The first component summarises general information on the object. In the case study informa-tion on the capacity of the heating and ventilainforma-tion systems was derived, but inventories on en-ergy consuming office equipment were not made. In future case studies these inventories should be made offering the possibility to estimate the application composition of the total energy use.
Observed sustainable measures can not be compared directly regarding their environmental impact by using merely component two, because of the narrative character. This component of-fers only the possibility to make a categorical inventory of the sustainable measures by distin-guishing five different triads with three degrees of sustainability each. Therefore, it provides the opportunity to organise past investments and future investments opportunities more quickly.
The third component uses at this moment data, which are only referring to two of the five tri-ads within the second component. The land use, generation of transport, and material use of the object have not been discussed by using data. Different Life Cycle Analysis methods already exist to assess material use, but the environmental impact of commercial real estate by its land use and by its generation of transport offers opportunities for further research.
The financial analyses were in this research based on the methodology of Facana. It was not an easy task to compare the theoretic facility costs and the actual facility costs of the case ob-jects, because of different accounting methods and cost specifications. To compare the theoretic data of Facana and the actual financial data of the facility management in more detail, future re-search will focus on the accounting methods and the classification methodologies of the facility costs.
8 CONCLUSIONS
Three case objects that offer almost the same accommodation and that were constructed in the same decade, were analysed by using a new assessment framework. Despite the similarities, some important differences were found regarding their sustainability, energy use, water con-sumption and the composition of the facility costs.
The natural gas consumption for heating was with values of 6.2 to 8.2 m3/(m2·year) found to be significantly lower than the standard reference value of 60 m3/(m2·year) established in 2006. The actual electric energy use of the objects ranges from 23 to 162 kWh/(m2·year). The referred electric energy use is 79 to 82 kWh/(m2·year). The actual water consumption was 26.4 to 41.8 dm3/(person·workday).
The use of the qualitative and quantitative analysis for assessing the sustainability of the three objects made it possible to recommend measures, which prevent energy use and water consump-tion, and make the energy supply and water consumption more sustainable than in the current situation. These recommendations fit in other words the first and second step of the Trias Ener-getica and the Trias Hydrica. The scope of this research did not allow the researchers to formu-late recommendations that contribute to the goals of Trias Hylica, Trias Toponoma, and Trias Poreutica.
The proposed assessment framework makes it possible for facility managers to derive in-vestment opportunities that contribute to a lower environmental impact of existing and new commercial real estate. The fourth component of the framework can be used to specify invest-ments that lower yearly facility costs. The energy use and water consumption are accountable for €14 to €16/(m2·year) of the total facility costs of € 258 to € 292/(m2·year). Investments that contribute to the market value or flexibility of an object seem to have a higher potential in sav-ing costs. The financial appreciation of the energy and water savsav-ing aspect of sustainable meas-ures alone, will in some cases not suffice in expressing the real financial value and potential of these measures for the organisation that owns or uses the object.
When the framework is used for designing new buildings historical data will not be available, but by using the reference data guidelines are offered to come to designs that are more environ-mental friendly and have on average lower annual facility costs.
ACKNOWLEDGEMENTS
The authors would like to express their gratitude to Fortis Real Estate, the Dutch Ministry of Housing, Spatial Planning and the Environment, the Provence of Overijssel, the Municipality of Hengelo, and SenterNovem for comments on and financial support of the research.
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