2009 - CRE

Mark­Smith,­­
Managing­Director,­­
Sunbury­Heights­Group
.................................
Looking­first­at­decisions­to­avoid­–choosing­shell-and-core­office­spacewith­
specific­ design­ or­ technicalrestrictions­
is­ one­ of­ the­ prime­ causesof­avoidable­expenditure.­Design­restrictions­
such­ as­ low­ floor­ weight­ loadingsfor­
instance,­ which­ necessitate­ the­ useby­the­tenant­of­structural­reinforcement,can­add­tens­of­thousands­of­dollars­to­thecost­of­finishing­the­space.Similarly,­the­tenants­manual­providedby­the­landlord­often­lists­specific­materials­he­wants­tenants­to­use­in­the­fitout.­
These­ are­ often­ compulsory­ and­ insigning­the­lease­you­agree­to­their­use.­
One­ large­ foreign­ bank­ recently­ signeda­similar­lease,­committing­them­to­useblinds,­lights­and­marble­of­a­particulartype­in­the­office­fit-out.­Without­having­priced­these­beforehand,­the­tenant­signed­a­lease,­later­tofind­that­these­materials­(some­of­whichhad­an­order­and­delivery­period­of­over­3­months)­added­nearly­$250,000­to­thecost­
of­ their­ fit-out.­ Be­ aware­ of­ thesepitfalls­–­some­are­even­more­common­in­'Western'­owned­and­managed­buildingsthan­they­are­in­local­stock.Before­you­get­involved­in­advancedlease­
talks­ therefore­ you­ should­ haveyour­project­and­cost­manager­review­thetechnical­infrastructure­for­the­buildingto­highlight­potential­fit-out­and­engineering­cost­commitments.­
The­ findings­ of­ this­ review­ shouldbe­
adapted­ and­ included­ in­ a­ technicalappendix­
to­ the­ lease­ agreement­ so­ asto­
ensure­ you­ are­ getting­ the­ technical­
infrastructure­ you’ve­ been­ promisedand­don’t­have­to­pay­extra­later­to­putthings­in­place­you­should­have­receivedas­standard.All­of­this­assumes,­of­course,­you­havedeveloped­at­an­early­stage­a­good­understanding­of­the­space­you’d­like­to­take.­In­doing­this,­always­be­aware­of­the­flexibility­
you­ might­ later­ require­ and­ howgood­
design­ can­ assist­ you­ in­ planningfor­change.
#06 (112) / 16–31.03.09
Conference­ room­ space­ is­ typicallyused­by­companies­only­18%­of­the­time.­Renting­space­at­Moscow­prices­to­be­usedfor­only­18%­of­the­time­should­lead­youto­assess­exactly­how­much­each­meetingusing­those­facilities­costs.­Surely­a­muchmore­flexible­design­would­enable­you­to­
use­shared­or­cooperative­space­for­meetings.­
Employing­ a­ good­ architect­ withexperience­in­this­field­could­save­tens­ofthousands­of­dollars­in­rent­costs.
The­ use­ of­ an­ architect­ who­ knowswhich­
materials­ are­ cost­ effective­ andeasily­
available­ locally­ can­ also­ helpachieve­
major­ cost­ reductions.­ Employan­international­architect­of­repute­by­allmeans­but­ensure­as­a­minimum­that­theyhave­a­local­partner­or­branch­which­willspecify­all­materials.Even­the­best­produced­and­aesthetically­pleasing­design­could­prove­impractical­
to­ build­ in­ Moscow.­ All­ materialsspecified­
in­ the­ design­ need­ to­ havelocal­
certification.­ Materials­ cannot­ beimported­unless­they­have­been­certifiedfor­local­use.­Many­materials­will­have­tobe­imported­in­any­case­but­a­judiciouschoice­
of­ those­ materials­ can­ speed­ updelivery,­reduce­costs­and­ensure­that­thelocal­craftsmen,­who­will­be­charged­withinstalling­and­maintaining­them,­can­doso­with­the­minimum­of­difficulty.A­good­project­and­cost­manager­willtake­
an­ architectural­ and­ engineeringdesign­and­review­every­material­therein,checking­on­local­availability,­the­presenceof­local­dealers,­stocks­held­in­the­vicinityand­the­overall­costs­of­supply­and­onwardmaintenance.­
This­ study­ comprises­ the­
| Architecture&Design |
| Business Technology |
| Personnel
|North–West |
Office Fit-Outs in a time of
Crisis – A Brief Guide to Value
Engineering
­ It­is­a­truism­that­no-one­wants­to­pay­more­for­their­office­fitout­than­they­absolutely­have­to.­What­is­less­obvious­though­is­thatmany­decisions­that­seem­prudent­at­the­time­they­are­made­canactually­lock­you­into­a­high-cost­location­or­design.­This­articleaims­to­identify­what­are­the­pitfalls­to­avoid­when­commencingthe­design­and­fit-out­process­and­how­to­conduct­a­rational­andresults-orientated­value­engineering­exercise­on­a­design­that­hasalready­been­produced.
value­engineering­exercise.­The­challengeof­value­engineering­is­to­suggest­substitutions­
that­ meet­ the­ objectives­ statedabove­while­maintaining­the­design­intentof­the­architects­and­the­likely­quality­ofthe­finished­product.­Swapping­out­glazedpartitions­for­painted­gypsum­board­is­not­
technically­ a­ value­ engineering­ task­ –changing­as­it­does­the­design­intent­ofthe­architects­and­the­likely­look-and-feelof­the­finished­office.­Whether­the­results­of­the­value­engineering­
process­ yield­ enough­ savings­ tosatisfy­budgetary­demands­is­determinedby­whether­more­fundamental­design­revisions­are­necessary.­Typical­value­engineering­suggestionsinclude­
the­ substitution­ of­ ceramic­ formarble­tiling,­framed­glazed­partitions­forframeless,­
reducing­ the­ specification­ ofcarpet­
tiles,­ the­ brand­ of­ fan-coil­ units,changing­
ceiling­ types,­ lighting­ specifications,­sanitarywear­and­blinds.­While­avalue­engineering­exercise­can’t­challengethe­(in­any­case­indisputable)­maxim­that­
'you­ get­ what­ you­ pay­ for',­ it­ does­ allowyou­to­maintain­design­intent­and­agreedlayout­while­being­able­to­sometimes­drastically­reduce­fit-out­costs.At­what­stage­should­a­value­engineering­exercise­be­conducted?­Assuming­thedesigner­or­architect­has­taken­account­ofthe­clients­cost­limitations­and­importation,­certification­and­availability­restrictions­on­the­Russian­market­then­a­valueengineering­
study­ can­ be­ scheduled­ atfirst­after­the­completion­of­the­schemedesign­stage.­If­the­architect­is­international­or­inexperienced­or­if­a­construc-
tion­company­does­the­design­then­earliercost­reviews­are­vital­if­abortive­redesignwork­is­to­be­avoided.
As­ the­ financial­ crisis­ deepens­ andspreads­its­tentacles­across­the­world­allof­us­need­to­be­mindful­of­cost­levels­andthe­danger­of­cost­overruns­in­projects­of
­­ One­large­foreign­bank­recently­signed­a­lease­commiting­them­to­useblinds,­lights­and­marble­of­a­particular­type­in­the­office­fit-out.­Without­having­priced­these­beforehand­the­tenant­later­found­that­these­materials­addednearly­$250,000­to­the­cost­of­their­fit-out.
this­type.­Careful­and­prudent­project­andcost­management,­involving­some­of­thevalue­
engineering­ steps­ detailed­ above,won’t­inoculate­you­against­every­risk­butit­will­certainly­help­ensure­that­the­fitout­costs­you­face­end­up­being­no­morethan­you­have­initially­budgeted.­
77