ERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi A “MEDIUM TERM”...
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Transcript of ERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi A “MEDIUM TERM”...
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISALAPPRAISAL
Arch. Antonella Mazzeo,Arch. Antonella Mazzeo,MBA, Luiss Business SchoolMBA, Luiss Business School
Prof. Giacomo Morri,Prof. Giacomo Morri,Director Master in Real Estate - SDA BocconiDirector Master in Real Estate - SDA Bocconi
APPRAISERS
APPRAISERS
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
A few questions in a today market
How to incorporate green issues into value in the mid term?
Does the conventional evaluating model fit the Green Property ?
How can we improve the conventional evaluating model in the mid term?
How to incorporate green issues into value in the mid term?
Does the conventional evaluating model fit the Green Property ?
How can we improve the conventional evaluating model in the mid term?
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
AGENDA
Green Issues and Value
An evaluating model in the mid term
A Case Study in Rome, Italy
Future Scenario
Green Issues and Value
An evaluating model in the mid term
A Case Study in Rome, Italy
Future Scenario
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
Sustainable Sites and Community Connectivity
Water and Energy Efficiency
Atmosphere
Materials & Resources
Indoor Environmental Quality
Innovation & Design Process
GREEN ISSUES AND VALUEGREEN ISSUES AND VALUE
* Categories by main sustainable certification processes
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
REVENUES (RENT)
EXPENSES
RISK
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
Saving money Saving money Risk Mitigation Risk Mitigation
Energy Saving
Water Saving
Space Saving
Productivity Increasing (?)
Insurance Saving (?)
Process Performance Optimization
Feature Performance Increasing
Building Performance Increasing
Market Performance Increasing
Financial Performance Increasing
GREEN ISSUES AND VALUEGREEN ISSUES AND VALUEA “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
How many comparables in Italy?
Energy EfficiencyEnergy
EfficiencyGreen
BuildingsGreen
Buildings
Number of
Buildings
SustainableBuildings
SustainableBuildings
EFFI
CIEN
CY
EFFI
CACY EC
ON
OM
Y
GREEN ISSUES AND VALUEGREEN ISSUES AND VALUEA “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
Does the traditional evaluating model match the Green Property ?
How to link
How to link
Rental Grow
Rental Grow
Depreciation
Depreciation
Risk Premium
Risk Premium
Cash flow
Cash flow
ToTo
GREEN ?
GREEN ?
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
AN EVALUATING MODEL IN THE MID TERMAN EVALUATING MODEL IN THE MID TERM
CASH FLOW ANALYSIS 1 2 … … n-1 n
+ Base Rental Revenue
- Base Rent Abatements
BASE RENTAL INCOME
- Vacancy & Collection Loss
EFFECTIVE GROSS INCOME
- Operating Expenses
- Insurance costs
- Maintenance costs
- Real Estate Taxes
NET OPERATING INCOME
PVPV == CF CF / / (1+r) (1+r)ttPVPV == CF CF / / (1+r) (1+r)tt
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
PVPV == CF CF / / (1+r) (1+r)ttPVPV == CF CF / / (1+r) (1+r)tt
Past /Past /
PresentPresent
Mid termMid term
Past /Past /
PresentPresent
Mid termMid term
Value = Income / Capitalization rateValue = Income / Capitalization rate
Rent
Vacancy
Expenses
Rent
Vacancy
Expenses
ViewsFinishesFlexibility
ViewsFinishesFlexibility
Illiquidity
Investment
Urbanistic
Illiquidity
Investment
Urbanistic
UseLocationMaintenanceQualityTenantLease structureLast of lease contract
UseLocationMaintenanceQualityTenantLease structureLast of lease contract
LocationAmenitiesDesignAbility to attract tenant
LocationAmenitiesDesignAbility to attract tenant
Process performanceFeature performanceBuilding performanceMarket performanceFinancial performance
Process performanceFeature performanceBuilding performanceMarket performanceFinancial performance
OperatingElectricity, heating, cooling, utilitiesMaintenanceHVAC and finishesCap ExConstruction costs
OperatingElectricity, heating, cooling, utilitiesMaintenanceHVAC and finishesCap ExConstruction costs
Add in = Add in =
Other RiskOther Risk
Rent
Vacancy
Expenses
Rent
Vacancy
Expenses
Health space planningOperating savingProductivity
Health space planningOperating savingProductivity
Reflecting brand & imageOperating & space savingReflecting brand & imageOperating & space saving
Maintenance savingMaintenance saving
AN EVALUATING MODEL IN THE MID TERMAN EVALUATING MODEL IN THE MID TERM
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
CONVENTIONAL BUILDINGSCONVENTIONAL BUILDINGSCONVENTIONAL BUILDINGSCONVENTIONAL BUILDINGS
Green
Building
issues
Levers of
value
P.V.
Green
Building
issues
Levers of
value
P.V.
RevenuesRevenuesRevenuesRevenues
Finishes
Energy saving
Water saving
Less absenteism
Higher productivity
Finishes
Energy saving
Water saving
Less absenteism
Higher productivity
Healt space planning
(core and shell
dimension, windows
sizes, mechanical
ventilation rate)
Healt space planning
(core and shell
dimension, windows
sizes, mechanical
ventilation rate)
Process performance
Feature performance
Building performance
Market performance
Financial performance
Process performance
Feature performance
Building performance
Market performance
Financial performance
Lower vacancy
Better tenant
Lower vacancy
Better tenant
Maintenance saving
Insurance saving
Maintenance saving
Insurance saving
ExpensesExpensesExpensesExpenses RisksRisksRisksRisks++
Rent per AreaRent per Area Rentable AreaRentable Area RiskRiskStability of
Rent
Stability of
Rent
Maintenance &
Insurance costs
Maintenance &
Insurance costs
+ Rent - Discounted Rate- Expenses
CAP RATECAP RATE
NET OPERATING INCOMENET OPERATING INCOME
PRICEPRICE VALUEVALUE
AN EVALUATING MODEL IN THE MID TERMAN EVALUATING MODEL IN THE MID TERM
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
AN EVALUATING MODEL IN THE MID TERMAN EVALUATING MODEL IN THE MID TERM
BUILDING CASH FLOW ANALYSIS 1 2 … … n-1n
+ Base Rental Revenue+ Space saving - Base Rent AbatementsBASE RENTAL INCOMEADD:+ Energy Saving+ Water Saving+ Health and Worker Saving Costs (Productivity)+ Energy Producing+ Government Incentives(+ Green Certification sell)+ Turnover Vacancy- Capital expendituresPOTENTIAL GROSS INCOME - Vacancy & Collection Loss EFFECTIVE GROSS INCOME- Operating Expenses- Real Estate Taxes(+ Green Design & Construction)(+ Contracts )- Insurance cost- Maintenance CostsNET OPERATING INCOME
RENEWABLE ENERGY CASH FLOW ANALYSIS+
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
Building Features 6900 square meters office 1 story underground 4 stories
Building Features 6900 square meters office 1 story underground 4 stories
Building Performance energy efficiency 45% water efficiency 50% 70 more workers
Building Performance energy efficiency 45% water efficiency 50% 70 more workers
DCF Assumptions for the InitiativeDCF Assumptions for the Initiative
REVENUES (first year) REVENUES (first year) + traditional rent revenues : +10% office vacancy rate ( first year) + space efficiency saving 1% office vacancy rate (over years)
+ energy efficiency saving + water efficiency saving + productivity/ + absenteeism reduction (10%) + government incentives (for 5 years)(building energy , retrofitting, solar panel, HVAC)
COSTSCOSTS• maintenance• insurance
DCF Assumptions for the InitiativeDCF Assumptions for the Initiative
REVENUES (first year) REVENUES (first year) + traditional rent revenues : +10% office vacancy rate ( first year) + space efficiency saving 1% office vacancy rate (over years)
+ energy efficiency saving + water efficiency saving + productivity/ + absenteeism reduction (10%) + government incentives (for 5 years)(building energy , retrofitting, solar panel, HVAC)
COSTSCOSTS• maintenance• insurance
about € 1.900.000about € 230.000
about € 30.000about € 8.000about € 15.000
about € 190.000
about € 2.300.000about € 2.100.000
About € 45.000
-10%- we consider -
REVENUES from green
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
A CASE STUDY IN ROME, ITALYA CASE STUDY IN ROME, ITALY
REVENUES from renewable technology(incentives from GSE + direct sell + energy not paid to electricity deliverer)
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
Health space planning
Operating saving
Health space planning
Operating saving
AN EVALUATING MODEL IN THE MID TERMAN EVALUATING MODEL IN THE MID TERM
Energy Building/HVAC "Standard"
CONSUMO ENERGIA ELETTRICA PER RAFFRESCAMENTO 131644 kWhelCONSUMO GAS NATURALE PER RISCALDAMENTO 25485 mc CH4l
Building/HVAC "di Progetto"CONSUMO GLOBALE ENERGIA ELETTRICA 145894 kWhelFABBISOGNO ENERGIA PRIMARIA 364735 kWhep
RIDUZIONE FABBISOGNO ENERGIA PRIMARIA 209031 kWhep
Building pre-retrofitting Costo Energia elettrica 15797,28 €Costo metano 16055,55 €Costo complessivo 31852,83 €
Building post-retrofitting Costo Energia elettrica 17507,28 €
ENERGY SAVING POST-RETROFITTING 14345,55 €
SAVING FOR ENERGY EFFICIENCY IMPROVING 45%
HEALTH SPACE PLANNING
Work Station pre- retrofitting 380 nWork Station post- retrofitting 450 nArea per employee pre retrofitting 10 mqArea per employee post retrofitting 7,6 mqSaving area per employee post- retrofitting 2,4 mqCost 250 € /mqArea per employee pre retrofitting 3800 mqArea per employee post retrofitting 2888 mqRentable area more available 912 mqRevenues more rentable area 228000 € Revenues pre retrofitting 950000 € Saving per more rentable area 0,24Increasing in space efficiency 18%
Add inAdd in
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
Productivity
Indoor Environmental
Quality
Productivity
Indoor Environmental
Quality
AN EVALUATING MODEL IN THE MID TERMAN EVALUATING MODEL IN THE MID TERM
Saving by Productivity
I talian average net salary 1300 €/employee/monthWork days 20 days/monthDaily salary 65 €/dayWork time (60 min. x 9 hour) 540 minuts/dayProductivity increasing 2,00% silver certificationImproved work time 550,8Income per minute 0,12 €/minutominutes more per employee 10,8 min/employeeeuro saving per employee 1 €/persona/giorno
euro saving per all employees 585 €/ 450 impiegati/ giorno
Total Euro saving / year 128700 €/ 450 impiegati/ anno
Number of employees 450work day/ year 220annual salary saving 585000
Saving on salary for productivity increasing 22%
Indoor Environmental Quality
Absenteism reductionabsenteism /year / employee 3costo di assenteismo l'anno 195Numero impiegati 450Costo saving 87750
Costo saving (20% ) 17550
Add inAdd in
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
A “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
A CASE STUDY IN ROME, ITALYA CASE STUDY IN ROME, ITALY
Evaluating a building with
the “add in” evaluating
model gives an extra
MARKET VALUE of
20%.
Evaluating a building with
the “add in” evaluating
model gives an extra
MARKET VALUE of
20%.
ERES 2010 MILANOERES 2010 MILANO Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi Arch. Antonella Mazzeo, MBA ; Prof. Giacomo Morri, SDA Bocconi
FUTURE SCENARIOFUTURE SCENARIOA “MEDIUM TERM” ADD IN PROPOSAL FOR GREEN PROPERTY APPRAISAL
Green Buildings Green Buildings > Conventional Buildings> Conventional Buildings
Green Buildings Green Buildings < Conventional Buildings< Conventional Buildings
Long term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ≥ 10 years
EVALUATION MODELINGEVALUATION MODELING
RENTRENTUTILITIESUTILITIES
RENTRENT
UTILITIESUTILITIES