Control Design, Design Control | Macro

Control Design, Design Control


By Colin Arthur, Senior Consultant, Macro International

Will real estate projects conceived today really hold steadfast to the investors’ original vision for the duration of its projected lifespan? Probably not is the quick answer. Advances in engineering disciplines and capabilities, the exponential speed of advances in technology applications used by designers, as well as innovative techniques deployed in construction, continually push the boundaries of what is achievable. Creativity has no bounds! What would have been perceived as visionary but impossible in any practical sense has now become attainable. 

Imagery defies belief and this pours fuel on to the fire of targeted real estate investment, driven by strict investment parameters. Throw into the equation the dynamic of global access, almost instantaneous communication and the drive to improve standards and to be recognised via local awards for initiatives such as sustainability. Companies have quality standards they need to adhere to, governance controls and internal compliance reflected in Standard Operating Procedures (SOPs). External factors are also at play, for example laws and regulations imposing higher Health Safety and Environment obligations. 

Then ask yourself how much of the creative resource invested in terms of developing (and funding) the original concept, through to building the project and handover to beneficial occupancy, will survive beyond any typical defects liability period? 

The reality is that well-honed project and investment management processes, practices and procedures will or, at least, should in any professional environment, achieve delivery to time, cost and quality standards stipulated from the outset. Delivery is not the end point. Delivery is the birth of the project into the live, occupied environment with its own, reasonably well-defined and predicted lifespan. It is at this point that the project takes on a life of its own, a real test of theoretical concept being converted into practice, live use. From this point the determinants and rationale behind the investment in the real estate will meet, exceed or fail miserably any purported targets. 

Particularly in emerging real estate markets, where demand dynamics, development vision and the pace of change can be breathtaking and inspiring, the focus and controls applied in the early stages of the design and construction timeline pale into insignificance if an equally diligent approach has not been anticipated and applied to the full, projected lifespan of the planned real estate. The obvious ones that exacerbate this are the risks associated with operational security, fire, health and safety, the use of what should be deemed ‘scarce’ public utilities and the environmental footprint. All of these are increasingly falling under the span of the regulator’s spotlight. Agreements are often confused with contracts. They are very different. Any two parties can reach an agreement but only a contract is enforceable in a court of law within a defined jurisdiction. Is there any substantive value in an agreement that cannot be enforced? 

So how much proportionate effort, scrutiny, due diligence and resource is applied in the early stages of a real estate project to future proof it against changes, which can be anticipated and visualised over the designed lifespan of the real estate project? 

If the draft provisions of any sales and lease agreements, if services and supplies agreements, if internal and external property and services boundaries, if rules and regulations are not considered, even in principle, let alone defined whilst the real estate concept is still evolving, then the research and effort that has been put into the design will be thrown out. 

The value, effort, resource expended and, most importantly, the integrity of the original concept that justified the initial capital investment must be protected and preserved over the long term. 

There is a certain irony in all of this; if  greater focus is applied at the outset, not only would  positive fiscal benefits be generated for current and potentially future stakeholders, but in relative terms, a better value proposition could, indeed should be presented for current or future investors at any stage in its life.

This article was originally published in Construction Week

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