The business case for green infrastructure A Developers perspective Brad Bamfield Chairman The Whole Life Cost Forum MD The Solution Organisation Ltd 07803.

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Presentation transcript:

The business case for green infrastructure A Developers perspective Brad Bamfield Chairman The Whole Life Cost Forum MD The Solution Organisation Ltd

Why do Developers Develop ? To make money To improve business reputation To make money To improve the facilities for occupiers To make money To improve the built environment To make money

But really Developers make money by improving YIELD

Calculating yield Yield is a complex calculation Rent x number of years Includes –Letability –Saleability –Void –Attractiveness to occupiers

Developers love yield Yield is the inverse years purchase So its the opposite to expectation Yield = 100 / Years purchase So 5% yield is better than 10% 20 years purchase vs 10 years Reduce yield = happy developer

Developers hate voids The void is the time from completion to occupation There is also a rent free period Reduce void = happy developer Reduce rent free = happy developer Reduce both = very happy developer

Ecstatic developer Decrease Yield Reduce void Reduce rent free

What can do that? Living Roof

Bottom line A 20,000 sqft £18.50 per sqft with 8% yield Value £4.625M 0.5% improvement in yield to 7.5% Value £4.933M Yes that is £308,000

Reduce other impacts Now reduce voids by 3 months And rent free by 3 months Adds additional £185k Yes that is £493,000

Living roofs Reduce the developers yield by 0.5 to 1%

Project Relationships Capital Cost1 Revenue Cost 5x Business Cost200x 1:5:200

Improving returns through Living Roofs 2 very similar central London multi-let offices One has living roof One has 35% lower void period One receives 20% higher rent Case study being developed

Springboard Centre, Somerset Non commercial property Living roof 5 year payback –Energy only Case study Includes review of bio-diversity

Laban Centre, Deptford

Here the roof improves the conditions in the building for the users Costs were unnecessarily high through lack of planning and coordination

Working together? Developers & Planners & Government What does the developer want? –To sell the development! How does the developer sell the development? –By ensuring people want to live/work in it!

Working together? Developers & Government What does the Government want? –They want to save the world! How does the Government make this happen? –By regulating through planning and building control! Developers &

Living roofs Make money – Contribute to saving the planet Improve the working environment Sustainability in action lots of it.

The result Developers & Government; Why can we not work together ? want the same thing

Conclusion Developers want to make money Living roofs make money for developers The Government wants to save the world Living roofs save the world Its just how do we convince people –Force –Or profit

Brad Bamfield Chairman The Whole Life Cost Forum MD The Solution Organisation Ltd