1. On the pulse of the property world Are you making the most of your estates data? Oliver Gibson, IPD Occupiers

2. © IPD www.ipd.com On the pulse of the property world Agenda EMS and IPD Occupiers Gathering evidence Cost benchmarks Space benchmarks Environment benchmarks Barriers to change

3. On the pulse of the property world EMS & IPD Occupiers

4. © IPD www.ipd.com On the pulse of the property world Who are IPD Occupiers? Part of IPD (Investment Property Databank) –World leaders in property performance measurement –IPD Index published in 23 countries worldwide –Awarded the Queen’s Award for Export Achievement in 2005 IPD Occupiers –Benchmark +/- 25% of UK office space –Entire UK civil estate through contract with the OGC –Also developing services internationally UK Education Sector –EMS (Estates Management Statistics) project in HE since 1998 99% UK coverage for 2007/08 academic year –eMandate (Estates Management Data Exchange) in FE since 2006 98% GB coverage for 2007/08 academic year –Strategy reporting, training, data services

5. On the pulse of the property world Gathering Evidence

6. © IPD www.ipd.com On the pulse of the property world From data to wisdom (Ackoff 1989) DATA INFORMATION KNOWLEDGE WISDOM Understanding Connectedness Understanding relations Understanding patterns Understanding principles Processed data Applied information Evaluated knowledge The first three categories relate to the past as they deal with what has been or what is known. Only the last category, wisdom, deals with the future because it incorporates vision and design. With wisdom, people can create the future rather than just grasp the present and past.

7. © IPD www.ipd.com On the pulse of the property world Possible sources of information SourceInternalExternal EMS  HEIDI  TRAC  SMG  Case Study Material eMandate (further education)  Consultants reports IPD Occupiers Corporate Trends Report  Other

8. On the pulse of the property world Benchmarks

9. © IPD www.ipd.com On the pulse of the property world Characteristics of an ‘average’ HEI Huge diversity in the sector e.g. Open University, Royal Agricultural College, Royal Academy of Music etc. There is no such thing as an ‘average’ higher education institution However, if there were it might have the following characteristics: –Non-residential income of approx £140m per year of which 15% relates to research –Have 9,700 FTE students of which 5% are research students –4 non-residential sites in a mixture of urban and semi-urban (campus) settings –8% listed buildings –19% of estate built before 1940 (non-residential) –26% of estate built since 1980 (non-residential)

10. © IPD www.ipd.com On the pulse of the property world The Broad Context The wider economyCredit crunch means that there is less money to go around and demands greater efficiency. Government/the general publicCarter Review demands more efficient use of property assets. Stern Review requires early action to tackle climate change. Mounting public debt. HEFCEPressure on budgets, particularly capital. ‘Good space management not only benefits the environment, it also frees up resources that can be used for teaching and research.’* Your institutionEvolving demands from students. Internal budgetary pressures. * HEFCE, Sustainable Development in Higher Education (February 2009)

11. © IPD www.ipd.com On the pulse of the property world Scope of analysis Overall Efficiency Cost Efficiency Space Efficiency Affordability Environment

12. On the pulse of the property world Affordability

13. © IPD www.ipd.com On the pulse of the property world Total Property Cost as a % of Total Institutional Income ‘Average’ HEI spends 9.4% of its income on its estate ‘Best Quartile’ HEI spends 8.1% of its income on its estate ‘Poor’ HEI spends 13.4% of its income on its estate ‘Worst Quartile’ HEI spends 10.5% of its income of its estate ‘Exceptional’ HEI spends 5.7% of its income on its estate Source: EMS Statistics

14. On the pulse of the property world Cost Benchmarks

15. © IPD www.ipd.com On the pulse of the property world Cost Efficiency Scorecard Total Property Costs Rateable ValueInsuranceRates Service Charges Energy Water/ Sewage MaintenanceCleaning Estates Management

16. © IPD www.ipd.com On the pulse of the property world Total Property Cost per Student FTE (Whole Estate) ‘Average’ HEI spends £1,060 per student FTE ‘Best Quartile’ HEI spends £793 per student FTE ‘Poor’ HEI spends £3,259 per student FTE ‘Worst Quartile’ HEI spends £1,614 per student FTE ‘Exceptional’ HEI spends £623 per student FTE Source: EMS Statistics

17. © IPD www.ipd.com On the pulse of the property world Total Property Cost Scattergram

18. © IPD www.ipd.com On the pulse of the property world Total Property Cost per m² Net Internal Area (NIA) ‘Average’ HEI spends £105 per m² Net Internal Area ‘Best Quartile’ HEI spends £94 per m² Net Internal Area ‘Poor’ HEI spends £170 per m² Net Internal Area ‘Worst Quartile’ HEI spends £124 per m² Net Internal Area ‘Exceptional’ HEI spends £72 per m² Net Internal Area Source: EMS Statistics

19. © IPD www.ipd.com On the pulse of the property world Proportionate Split of Total Property Cost

20. © IPD www.ipd.com On the pulse of the property world Key Cost Drivers Mix of courses –High research = high cost Geographical location –Variable cost bases Age profile of buildings –Legacy issues –% listed buildings Building condition –Maintenance ‘straightjacket’ Management effectiveness –Cost control –Space management –Quality of procurement Appropriate peer group analysis is critical to obtain true picture

21. On the pulse of the property world Space Benchmarks

22. © IPD www.ipd.com On the pulse of the property world Indexed growth of space & student numbers

23. © IPD www.ipd.com On the pulse of the property world Space Data Structure Total Non- residential NIA Total Teaching NIA Total Teaching NIA - Core Total Teaching NIA - Offices Total Research NIA Total Research NIA - Core Total Research NIA - Offices Total Support NIA Total Support NIA - Offices Total Support NIA - Other Total Support NIA - Catering Total Support NIA – Learning Centre Total Vacant NIATotal Other NIA

24. © IPD www.ipd.com On the pulse of the property world Total Non-residential NIA per Student FTE ‘Average’ HEI provides 7.7m² per student FTE ‘Best Quartile’ HEI provides 5.7m² per student FTE ‘Poor’ HEI provides 21.1m² per student FTE ‘Worst Quartile’ HEI provides 11.5m² per student FTE ‘Exceptional’ HEI provides 4.5m² per student FTE Source: EMS Statistics

25. © IPD www.ipd.com On the pulse of the property world Academic NIA per Student FTE ‘Average’ HEI provides 4.3m² per student FTE ‘Best Quartile’ HEI provides 3.3m² per student FTE ‘Poor’ HEI provides 13.5m² per student FTE ‘Worst Quartile’ HEI provides 6.7m² per student FTE ‘Exceptional’ HEI provides 2.6m² per student FTE Source: EMS Statistics

26. © IPD www.ipd.com On the pulse of the property world Teaching Room Utilisation Rate ‘Average’ HEI has a utilisation rate of 26.2% ‘Best Quartile’ HEI has a utilisation rate of 36.6% ‘Poor’ HEI provides has a utilisation rate of 14.7% ‘Worst Quartile’ HEI has a utilisation rate of 20.1% ‘Exceptional’ HEI has a utilisation rate of 60.7% Source: EMS Statistics

27. © IPD www.ipd.com On the pulse of the property world Proportionate Split of Total Net Internal Area (NIA)

28. © IPD www.ipd.com On the pulse of the property world Office space per FTE Sources: IPD Occupiers Corporate Real Estate Trends 2008 and EMS Statistics 2007-2008

29. © IPD www.ipd.com On the pulse of the property world Office Support Space Meeting space Social space Technical space Catering space Office space (support) Learning space (support) The true HE picture could be as much as 20m² of office space per staff FTE

30. © IPD www.ipd.com On the pulse of the property world Key Space Efficiency Drivers Mix of courses –High research = high space demand (ratio approx 5:1, the same as income) Physical location –Space more scarce in urban environments Profile of buildings –% of cellular/open plan space –% older/listed buildings Management effectiveness –Space management Appropriate peer group analysis is critical to obtain true picture

31. On the pulse of the property world Environment Benchmarks

32. © IPD www.ipd.com On the pulse of the property world A decade of achievement

33. © IPD www.ipd.com On the pulse of the property world Total Energy Consumption (kWh) per Student FTE ‘Average’ HEI consumes 3,817kWh per student FTE ‘Best Quartile’ HEI consumes 2,499kWh per student FTE ‘Poor’ HEI consumes 10,600kWh per student FTE ‘Worst Quartile’ HEI consumes 6,776kWh per student FTE ‘Exceptional’ HEI consumes 1,732kWh per student FTE Source: EMS Statistics

34. © IPD www.ipd.com On the pulse of the property world Total Water Consumption (m³) per Student FTE ‘Average’ HEI consumes 11.9m³ per student FTE ‘Best Quartile’ HEI consumes 7.3m³ per student FTE ‘Poor’ HEI consumes 39.9m³ per student FTE ‘Worst Quartile’ HEI consumes 21.9m³ per student FTE ‘Exceptional’ HEI consumes 4.7m³ per student FTE Source: EMS Statistics

35. © IPD www.ipd.com On the pulse of the property world Waste Mass (tonnes) per Student FTE ‘Average’ HEI produces 0.13 tonnes per student FTE ‘Best Quartile’ HEI produces 0.07 tonnes per student FTE ‘Poor’ HEI produces 0.49 tonnes per student FTE ‘Worst Quartile’ HEI produces 0.21 tonnes per student FTE ‘Exceptional’ HEI produces 0.03 tonnes per student FTE Source: EMS Statistics

36. © IPD www.ipd.com On the pulse of the property world Environmental Drivers Mix of courses –High research = high energy demand Profile of buildings –% older/listed buildings Management effectiveness –Environmental management Building features Human behaviour Use of renewables … Appropriate peer group analysis is critical to obtain true picture

37. On the pulse of the property world Barriers to change

38. © IPD www.ipd.com On the pulse of the property world Barriers to change Legacy estate –Too big? –High proportion of old/listed buildings –High proportion of cellular space –Disrepair ‘straightjacket’ –High proportion of freehold space –Inflexible, specialised spaces (unlike offices) Existing culture/working practice –Informal contracts –Shared spaces –Management approach

39. © IPD www.ipd.com On the pulse of the property world A couple of (anonymous) quotes regarding HE office space “My academic colleagues need their own offices: otherwise if they were in an open plan office people would realise how often they were not there.” “Academic offices are viewed as part of an informal contract: institutions can’t afford to pay their staff very much, but at least they can tell them that at interview that they will get their own offices.” ‘Average’ HEI spends £105 per m² Net Internal Area – by not having your own office and saving 5m² of space your institution could afford to pay you £500 more a year.

40. © IPD www.ipd.com On the pulse of the property world Conclusions Some institutions should consider carefully whether they can continue to afford to spend as much as they do currently on their estates There appears to be some scope for cost reduction, but much greater scope for space rationalisation, particularly office space Great strides have been made with regard to the environment but there is still a long way to go