by Mr.
Santhosh Kumar, CEO – Operations, Jones Lang LaSalle India
Even in economically
challenging times, a lot of equity capital today is chasing prime real estate
assets, presenting a monumental market for refurbishing and repositioning.
This is especially
true because prime products in prime locations are so thin on the ground. In
Mumbai, the iconic Express Tower is a good example of a real estate asset in a
prime location of India's financial capital that is ideally suited for
advantageous repositioning.
Express Tower at
Nariman Point has always had the benefit of a distinct identity. With
long-standing tenants and a strong management structure in place, this
commercial space edifice has no real competitors in its micro-market. The
repositioning of such an asset represents a huge upside potential for all
stakeholders - but, needless to say, doing so is no small task.
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| Santhosh Kumar, JLL India |
Seismic
Resistance Levels..!
In the case of many
older buildings, a partial or / complete retrofit in terms of the building
envelope, its engineering systems, seismic resistance levels and energy
efficiency improvements are called for.
Undertaking such
initiatives on a building that is located in the bustling heart of a city’s CBD
presents some logistical and tactical challenges. Apart from these aspects,
there are often also various legal aspects to be tackled - like upgrading the
building’s compliance to new building or zoning codes, the upgrading of its
infrastructure capacity and ensuring that accessibility is not compromised but
rather improved.
Some buildings need
only marginal refurbishing in order to attain revitalized market viability.
Other assets, especially those in prime locations, often need a complete makeover.
Some properties have
the advantage of substantial land holdings, while others are located in
constrained geographies.
In short, properties
which are good candidates for refurbishing and repositioning fall into several
distinct construction categories. Each of these categories has their own level
of complexity.
Cosmetic
Remodelling.!
In the least
challenging repositioning scenario, a property may need only cosmetic
remodelling. This kind of undertaking represents marginal disruption to existing
tenants, is relatively easy to implement and calls for minimal capital
investment. Such upgrades usually involve updating of obsolete interiors in
order to bring about a more contemporary appearance.
In a more complex
scenario, the asset requires both an internal and external facelift, which
includes all the internal aspects as well as improvement of the project's
external image. This kind of repositioning is naturally more cost-intensive.
Some assets have the option of using even more complex strategies such as
horizontal or vertical expansion, or both simultaneously.
Finally, retrofitting and repositioning or / a
prime real estate asset must be done with clear objectives in mind. Various
factors may conspire to prevent an older building from competing on all fronts
with newer structures in the same genre.
In such cases,
working towards the fulfilment of specific objectives such as improving
structural viability, energy efficiency and creating a superior tenant
experience is a good way to go.
CASE
STUDY - UPGRADING THE EMPIRE STATE BUILDING’S SUSTAINABILITY QUOTIENT..!
In April 2009,
world-class environmental consulting, non-profit, design & construction
partners – including the Clinton Climate Initiative, Rocky Mountain Institute,
Johnson Controls Inc. and Jones Lang LaSalle Used the Empire State Building as
a test case and model to unveil an innovative process for analysing and
retrofitting existing structures for environmental sustainability.
Adopted as core
elements of a more than $ 50 crore upgrade program at the world’s most famous
office building, the program was the first comprehensive approach that
integrates many steps to use energy more productively. The program's primary
purpose was to reduce energy consumption by up to 3 % and provide a replicable
model for similar projects around the world.
At the end of the
project definition process, the team analysed the steps to be taken in
conjunction with other steps towards sustainability as part of the Empire State
ReBuilding program within the framework of the existing USGBC LEED rating system.
Internal calculations show that the Empire
State Building will be able to qualify for GOLD certification for Leadership in
Energy and Environmental Design (LEED) for Existing Buildings, and ownership
expressed its intention to pursue such certification.
Commercial and
residential buildings account for the majority of the total carbon footprint of
cities around the world.
Most new buildings
are built with the environment in mind, but the real key to substantial
progress is reducing existing building energy consumption and carbon footprint.
The innovative
process adopted at the Empire State Building has developed new techniques for
modelling and organizing an integrated program and offers a clear path to
adoption around the world, leading to significant reductions in greenhouse gas
emissions.
Recycling Waste,
Construction Debris..!
Along with other
steps taken in recycling waste and construction debris, use of recycled
materials, and green cleaning and pest control products, the model built at the
Empire State Building significantly reduces energy consumption and
environmental impact and allows more sustainable operations. Simultaneously, it
enhances profitability and tenant comfort.
The project partners
used existing and newly created modelling, measurement and projection tools in
a new and repeatable process to analyse the Empire State Building and establish
a full understanding of its energy use as well as its functional efficiencies
and deficiencies.
This provided
actionable recommendations along a cost-benefit curve to increase efficiency
and without harming bottom line performance.
In reviewing more
than 60 optional activities, the team identified eight economically viable
projects, applicable to building-wide renovations, electrical and ventilation
system upgrades and tenant space overhauls that provide a significant return on
investment, both environmentally and financially.
Save money, Save energy..!
In a distressed
economic climate, there is a tremendous opportunity for cities and building
owners to retrofit existing buildings to save money and save energy. Not only
has this project dramatically reduced the Empire State Building’s environmental
impact, but it was done in a way that provides meaningful costs savings to the
building as well as its tenants.
.jpg) |
| Arun Chitnis |
For Media Contact..!
Arun Chitnis -
Assistant Vice President, Marketing
Jones Lang Lasalle
India
Level 6, Amar Avinash
Corporate Plaza
Bund Garden Road,
Pune - 411001.
Tel: (020) 30930441
Fax: (020) 40196101
Mob: +91 9657129999,
Email: Arun.Chitnis@ap.jll.com
Website:
www.joneslanglasalle.co.in
Blog:
www.joneslanglasalleblog.com/realestatecompass
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