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How The Costs Of Owning And Operating Buildings In The GCC Are Being Managed.

Date Posted: 06/12/2013

“Asset Lifecycle Accounting for [Property and] Facilities Managers”

Historically the way buildings are built, managed and operated within the GCC has significantly lagged behind the methodology and strategies being used in the more developed world economies.

There is very little or no GCC defined standards, codes or regulatory requirements for lifecycle costing of built assets to be carried out. Unfortunately therefore the majority of GCC projects are carried out with no consideration to the lifecycle costs at all.

Moving towards a "Maintain well and they will stay" philosophy
However this is rapidly changing due to the growing awareness and demands to look after the huge amount of property and infrastructure investments that have been made over the last 20 years throughout the region.

Possibly due to the economic downturn some of the regions largest master developers are also now changing their strategies from the ‘build and they will come’ approach of earlier years boom period to the 2013 ‘maintain well and they will stay’ philosophy.

Throughout the region there are now pockets of expertise emerging and working hard to bring the very best in advanced building management and life cycle costing to the GCC and these tend to be located, not surprisingly where the areas of construction and development have advanced most. Within Dubai and Abu Dhabi in the UAE, Doha in Qatar and now with some evidence of advanced systems emerging from Kingdom Of Saudi Arabia.

Interestingly with such large opportunities currently being created by these master developers the development of processes and standards for undertaking large, often city scale, asset management studies are becoming very advanced and in many ways are now world leading.

In 2009 Dubai’s RERA initiated a project to capture asset information for over 1,000 of Dubai’s development using digital city technology. Several of Dubai’s master developers are now considering the use of this technology to generate manageable and effective lifecycle cost information across their city scale developments.
In Dubai for example one of the largest ever exercises carried out in the GCC was to monitor and track the construction progress of over 1,000 development projects and capture information on the assets as they were built. This initiative carried out by Dubai’s Real Estate Regulatory Agency with their partners Realpoint using pioneering advanced 5D digital city and database technology. This technology led approach is now being considered by several of Dubai’s master developers to capture asset information, record their condition and life cycle costs of their master developments and infrastructure projects.

The leading designers and developers in the region are also now rapidly adopting building Information Modeling (BIM). Whilst this technology is not yet common within the property and facilities management sectors interest is starting to be shown and I believe that it will not be long before BIM is embraced throughout the design, procurement, construction and operation of built assets in the GCC.

With the adopting of BIM and linking with lifecycle cost database systems the ability to manage assets will become much greater and the awareness of the lifecycle costs of assets and the process of capturing of this valuable information will become much stronger.

On projects within the GCC the project and consultancy teams tend to comprise a mixture of international and local expertise. Many of the world’s leading consultancy firms are also present within the region and bring their own international standards and approaches to life cycle costing. The UK’s BCIS Standardised Method Of Life cycle Costing and BSi ISO 15686-5 Service Life Planning Part 5: Life Cycle Costing are often used and this will be enhanced with the adoption of BSi’s upcoming BS8544 latest standards.

The Royal Institution Of Chartered Surveyors which plays an international role developing and promoting lifecycle and real estate professionalism is also now in the region with many affiliated companies present with their capabilities.

With this international approach new standards are being developed that take the best components of the international standards and technology and blend them together to form leading and tailored standards within the GCC.

At Realpoint for example we are now developing our asset information collection and condition reporting expertise with the use of our own ‘in house’ developed maintenance and cost databases for buildings in the UAE. When applying this to client’s built assets we adopt current USA standards in BIM and asset-tracking that can be easily linked to models of the buildings built using the various well known 3D BIM modeling software. We also use the lifecycle costing standards of the UK which are the most modern standards worldwide and are currently being significantly developed for the operational phase with the introduction of BS8544.

When all of this is combined together the end result is a market leading and comprehensive system that provides property and facilities managers with highly visual and usable information they need to effectively management the built asset.

The reasons for adopting this approach in the GCC is mostly due to the fact that the few projects in the GCC that do consider the use of lifecycle costing tend to be the very large and complex projects. Due to the scale of these projects it becomes impractical and unmanageable for the client and their managers to use the traditional spreadsheet and database approaches.

Sadly this fact is often not appreciated by many of the international firms that simply bring their own home country approach to the GCC region without fully appreciating the intricacies and complexities of the projects and the lower operational skill levels being applied on the assets they are taking on.

Often GCC clients are not experts in built environment asset management or the methods of lifecycle costing. As such they rely upon and trust these consultants who then typically deliver, at great cost, a huge spreadsheet or database of asset information and costings. Although often expertly carried out they are provided without the appreciation that the client and the operational teams ‘on the ground’ have no chance of being able to interpret or implement the information to better manage their assets. Unfortunately this leaves clients with a bitter experience and creates a reluctance towards changing to a lifecycle approach to their developments.

The successful approaches being adopted in the GCC use map, CAD and BIM graphical information with the asset information to provide a visual and easy to understand display of the information. In this way the complex lifecycle calculations and figures that are behind the accountancy headlines are more easily understood and hence the studies and systems become effective management tools that live with the built assets.

It is early days for the development of these advanced systems but in the GCC these leading systems are now being developed. Given the speed and scale of development and construction in the region and the growing appreciation for needing to better manage and look after built assets it would not be surprising to find some of the world’s future leading built asset management and lifecycle cost systems and approaches being developed and coming out of the GCC in due course.

James Garbutt
Managing Director,
Realpoint Real Estate Consultancy,

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