Why refurbishing is sometimes cheaper than renewing
When updating a building’s interior, it’s sometimes advisable to refurbish rather than replace, writes Enviroscope Maintenance director Dyan Sisouw.
Close to one million square meters of office space will be added to the Australian CBD market over the next three years with half of this new space to be supplied to the Melbourne market, growing it by more than 10 per cent of its current stock. With this in mind, along with recent reports indicating that office vacancy in Australia is falling, there are many reasons to refurbish a building, even more so in urban areas where the usage, aesthetics and sustainability of a commercial asset need to be upgraded to remain competitive.
During this process, it is important for architects and building owners to focus on what to look for in a space before refurbishing, but this first begins with considering whether a building is ready for refurbishment or not. Commercial interiors have a typical lifecycle of five to ten years. Beyond this timeframe, interiors will start to show wear and tear and become out dated, ultimately reducing the value of the commercial asset. Further to this, tenants may choose to opt out of their current lease due to the deteriorating condition of the building and the lack of services and features available, which results in loss of income for the building owner.
Although there is an upfront cost associated with refurbishing, this is typically balanced out by the stronger yields, tenant retention and higher occupancy levels such upgrades can provide. End-of-trip facilities are an example of an interior that experiences wear-and-tear but can be commonly overlooked. These facilities are used daily by tenants who use alternative ways to travel to work and generally comprise of showers, lockers, changing facilities and bike racks.
When these functional facilities are not up to an appropriate standard, tenants are less likely to feel satisfied with the building as a whole, and will be less likely to re-consider signing on for another year.
This can also play into a buildings WELL rating—a leading global rating system that has become the leading tool for advancing health and well-being in buildings on a global scale. Buildings are assessed by measuring, certifying, and monitoring features of the built environment that impact human health and wellbeing through air, water, nourishment, light, fitness, comfort, and mind – with environmentally friendly choices likely to boost your overall rating.
If you have appointed a design firm to refresh your building, a typical oversight is choosing to replace, rather than refurbish. Some may view this as a cost saving method, when in fact, this can cost more over the long term with existing services such as partitions, floor finishes like stone or marble, and ceilings, simply retired to landfill, which can in turn negatively impact your WELL rating.
By reusing existing resources, building owners can expect to pay less over time as the life of these resources are extended, as opposed to constantly being replaced each lifecycle.
When it comes to taking steps to overcome waste, architects and building owners should always consider input from current tenants and use this information to guide the process. Tenant consultations are an effective way to source information about the current state of the building. This information includes what could be improved and what services and features are currently lacking, which can lead to further research into what assets of a similar class are doing to upgrade and retain tenants. This open communication channel with tenants is also likely to improve the overall tenant-owner relationship.
It should also be common practice for building owners to review their investment strategy and market conditions to better understand their financial position on outlaying costs. Having a clear understanding of this will give them more assurance about how much to outlay to maximise yield in accordance with their investment strategy.