The business case for green infrastructure

A Developer’s perspective

Brad BamfieldChairman The Whole Life Cost Forum

MD The Solution Organisation Ltd

07803 133110Chairman@wlcf.org.uk

B.Bamfield@thesolutionorganisation.com

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 it’s 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 building @ £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 Cost 1

• Revenue Cost 5x

• Business Cost 200x

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 www.thesolutionorganisation.com

• Includes review of bio-diversity

Laban Centre, Deptford

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

www.livingroofs.org

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 BamfieldChairman The Whole Life Cost Forum

MD The Solution Organisation Ltd

07803 133110Chairman@wlcf.org.uk

B.Bamfield@thesolutionorganisation.com