january 2009 presented by mark swindlehurst. what is the total area (m2 or acre) of the lancaster...
TRANSCRIPT
Estates Challenges
January 2009Presented by Mark Swindlehurst
What is the total area (m2 or acre) of the Lancaster University Estate ?
How many bed spaces does Lancaster University have ?
What was Lancaster Universities position in the 2008 People & Planet Green league table ?
Pre-Dinner Quiz
Lancaster University = 360 Acres 1,455,000m2
Equivalent to 196 Man Utd. football pitches
Total Residential Accommodation
7,109Bedspaces
Residential - UPP
4,425 Bedspaces
3340 Ensuite
1018 Non-ensuite
49 x1 bed flats
9 x2 bed flats
Residential – Lancaster University
2,684 Bedspaces
877 Ensuite
bedspaces
1710 Non-ensuite
bedspaces
42 x 1 bed flats
14 x 2 bed flats
5 x 3 bed flats
3 x 4 bed flats
Maintaining our Estate – at a sustainable level
Managing Space & Utilisation
Understanding the ‘true’ operating cost of the Estate
Supporting and reporting on our Environmental Impact and Carbon Reduction.
The Challenges
Age of the Estate (Buildings by m2)
Pre 1960 1960-1969 1970-1979 1980-1989 1990-1999 2000-20090%
5%
10%
15%
20%
25%
30%
35%
40%
Estate Management Statistics (EMS)
Royal Institution of Chartered Surveyors (RICS)
Gross Internal Area (GIA)
Net Internal Area (NIA)
Condition of the Estate
Royal Institution of Chartered Surveyors (RICS) grading:
A: New
B: Sound, operationally safe and exhibiting only minor deterioration
C: Operational, but major repair or replacement is needed in the short to medium term
D: Inoperable or at serious risk of major failure or breakdown
2008/9 Condition of Estate (GIA)Non-residential
A24%
B45%
C31%
D0%
Source: 2008/9 Conditions Survey
Building Conditions Non-residential
A B C D A B C D2006/7 2007/8
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2008/9
Building conditions benchmarked on 1994 group (Non-residential)
Lancaster University
University of Bath
University of Durham
University of East Anglia
University of Essex
University of Reading
University of Surrey
University of Sussex
University of Warwick
University of York
0% 10% 20% 30% 40% 50% 60% 70% 80%
Building condition % GIA condition A Building condition % GIA condition BBuilding condition % GIA condition CBuilding condition % GIA condition D
Source: EMS 2006/7
HEFCE/SMG estimate the sustainable estate provision for space to average £147.40 per m2 annually across UK HEIs on the basis of the Estate Management Statistics (EMS) data for 2002-03.
This cost comprises: • operating cost: £43.80 per m2 • maintenance cost: £53.40 per m2 • depreciation cost: £50.20 per m2
Add the opportunity cost of capital of £45.10 per m2
The total estate provision is £192.50 per m2
Sustainable Estate - Cost
2002/03 • operating cost: £43.80 per m2 • maintenance cost: £53.40 per m2
2008/09 (allowing 3% pa inflation) • operating cost: £50.77 per m2 • maintenance cost: £61.90 per m2
Sustainable Estate cost £113/m2
HEFCE/SMG define the total estate provision as the cost of keeping buildings in their current condition. Therefore, the cost of maintenance includes the cost of all maintenance required to keep the quality of a building’s fittings in good condition.
Maintenance costs
Operating costs are the short-run costs of using a building. Using EMS data, HEFCE/SMG defined operating costs as the sum of an HEI’s energy, rates, water, sewerage, cleaning, security and porterage costs, its insurance premiums and the HEI’s internal and external property management costs.
Operating costs
HEFCE/SMG define a building’s depreciation cost as the sum that must be saved each year to be able to replace a building at the end of its natural life and pay for periodic refits to the building.
Depreciation Cost
The opportunity cost of capital is the flow of earnings an HEI forgoes by owning a building rather than selling it and investing the proceeds.
Therefore, to find the opportunity cost of the capital tied up in the estate, it is necessary to estimate the price that the various parts of the estate would fetch in the market place.
The opportunity cost of capital
The Blue Elephant
Operating & Maintenance cost = £113/m2 (excluding depreciation & opportunity costs)
GIA or NIA
115,000m2 x £113/m2 = £13 million pa (excludes residences)
Maintenance only = £62/m2
115,000 x £ 62/m2 = £ 7.13 million pa
The Blue Elephant
Finance Strategy – key parameters
2008 2013
Insured Value of Estate £420m £500m?
Cash Generation £17m £23m
Surplus target 4-5% 5%+
Repairs & Maintenance £3m £8-9m
Debt to Income 23% <50%
Maintenance – 1.8% of insured asset value
20
05
/06
20
06
/07
20
07
/08
20
08
/09
20
09
/10
20
10
/11
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Gap Funded
£'000
ISS 2600m2 = £ 294k
Waterside 4000m2 = £ 452k
LICA 3000m2 = £ 339k
Circa £ 1.1m
Additional O&M Cost
On revenue we appear to be under investing
But....
Capital Programme Spent to Projected
Spend Projected as at 30th November 2008
Budget July '08 08/09 2008-09 2009-10 2010-11 Spend
£'000s £'000s £'000s £'000s £'000s £'000s £'000s
Major Projects £1m+
County South 11,000 275 123 4,025 5,200 1,500 11,000
Sports Centre 20,000 1,227 34 6,723 11,050 1,000 20,000
ISS New Building 9,900 1,992 1,230 7,308
601 9,900
LICA 10,000 253 138
422 5,325 4,000 10,000
Biology & ES 3,557 2,208 1,359 1,352 3,557
-
Student Learning Grid 3,000 139 93 1,861 1,000 3,000
Grizedale 3,051 206 153 2,044
801 3,051
Waterside 12,000 273 246 2,227 8,300 1,200 12,000
Health & Medicine (new building) 12,000 - -
500 4,500 7,000 12,000
Conference & Kitchen Facilities 3,500 - - 1,000 2,000
500 3,500
88,008 6,572 3,375 # 27,462 38,777 15,200 88,008
Rolling Programs
Estates - Backlog Maintenance 5,165
970
52
2,332
1,000
750
5,165
Landscaping 3,300
674
12
944
1,182
500
3,300
Sports Facilities 2,166
4
-
1,162
500
500
2,166
Utilities Infrastructure 6,000
71
8
3,929
1,000
1,000
6,000
Lecture theatre refurb 2,500
64
0
1,436
500
500
2,500
Minor Works 2,100
1,086
286
314
350
350
2,100
Social Provision 2,250
666
19
584
500
500
2,250
P/E VAT (On Additions) - 625
- 52
-
23,481
3,398
448
10,326
5,032
4,100
23,481
Space Management We haven’t yet established the budgets to
maintain our existing built estate If we are to manage our costs – we also
need to better manage space and this includes utilisation
We are seeing positive improvements in the centralised timetabling and room bookings
The more space we build, the more monies we need to operate and maintain it
Do we really need more space ?
Space by type
Acade
mic/Admin149,140m247%
Residential (LU)55,941m2
18%
Res-idential (UPP)
111,460m235%
Faculties
Faculty of Arts
& Social Sciences 43,078
m241%
Faculty of Sci-ence & Tech-
nology 45,581 m2 44%
Man-age-ment
School 12,582
m212%
School of Health & Medicine 3,403 m2
3%
Central Facilities
Centrally bookable teaching
and learning rooms10,882
m236%
IT rooms3,993 m213%
Library services15,262
m251%
We need to manage and minimise energy use.
We are taking part in the HECMP We already subscribe to BREEAM for all our
Developments. Lifecycle costs, not capital costs ! Awareness of the costs in running the Estate Reduce, Reuse, Recycle Sustainable & Renewable energies
Energy & Environment
Energy Consumption (KW/h) per student FTE
2004/5 2005/6 2006/7 06/07 Mean 06/07 Lower quartile
06/07 Upper quartile
Lancaster University Sector
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Kw
/h
Source: EMS 2006/7
People and Planet Green League 2008 Published by The Times Higher Education in
June 2008 Highlights institutions environmental
performance Enables students to make choices about
institutions based on their ‘green’ credentials as well as academic
Lancaster Uni ranked 43 of 119 Universities Key Performance Indicator (KPI) for University
Council
People and Planet Green League 2008 Benchmarked on 1994 group
We need to interrogate and understand our operating costs
We need to acknowledge the Blue Elephant and increase revenue budgets.
We need to agree the expenditure/investment plan against ◦ Health & Safety◦ Strategic Priorities◦ Condition Survey Data
We need to think strategically about space We need to drive the Environmental initiatives
Summary
3D Fly through