For this 9th season of the Urban Chronicles™, we invite you to learn more about the value in use for commercial buildings. In a context of environmental, energy and societal transitions, digital transformations and new lifestyles, this data has become decisive in the real estate sector.
Before giving the floor to actors in our ecosystem who integrate use value into the way projects and actions are thought, let’s come back to this notion together.
What is use value?
First of all, if we use the definition of the word “use”, it includes the notion of habit, the use or use of something. This corresponds exactly to what real estate professionals want to express through the expression “value in use”: what services are provided to occupants that create value for a building? Interior comfort, lighting quality, soundproofing, connectivity, access to sports classes, role in the neighborhoods… these are all points that are no longer considered as details in the construction, renovation and use of a commercial building. We speak of use value (or intangible value) because it is constitutive of the value of a building but exceeds its simple material value, its location or its price per square meter. The uses proposed by the building not only improve the user experience but also increase the economic value of the property on the market.
Use value of a building: how to aim right and why think long term?
To determine the value in use of a building, it is first necessary to determine very precisely the expectations of users at the technical, sociological or business level, even if they are currently evolving extremely rapidly.
With this in mind, Green Soluce develops and organizes workshops to approach this use value. With its clients, the team identifies the innovation levers and concrete actions to deploy a building at the service of sustainable development and co-construct the offices of tomorrow.
Among the lessons of its workshops, it should be noted that the promise of use value engages the credibility of promoters. Maintaining long-term value for investors is a new challenge to be integrated. Ensuring sustainable use value for occupying companies requires that the services linked to this value have been designed to last and that the actors are present on site to ensure their sustainability.
Drawing on global best practices
At the international level, two examples caught our attention. They are innovative and show the commercial relevance of the value in use.
First of all, the one of the National Australia Bank. Although the building sector is forced to deal with security issues in the banking sector, it embodies a functional mix. Its ground floor, called The Nab Village, hosts startups, associations and the bank’s own clients. In addition to providing innovation for bankers, openness to the territory and a social role, the bank generated additional revenue (25% of the local users were not previously customers of the bank).
Closer to home, in London, the English developer British Land has built a series of residential and commercial buildings in a central district around which it has built outdoor spaces: green and leisure spaces, entertainment center, cycle paths, etc. In close cooperation with the city, its objective was to make these places desirable, to create amenities for the inhabitants of the district. A successful bet since today the buildings are 97% occupied.
Multiple challenges arise when promises are made to create maximum use value for the building. How does the intangible fit into real estate valuation? How do these practices integrate transition and generation issues, new lifestyles and work, a new relationship with the city? How to stay informed? What is the impact on the actors in the real estate value chain (local authority, developer, investor, developer, user) and their respective cost and revenue structures?
These are the questions that we will address in the Urban Chronicles through our meetings in the coming weeks (coworking areas, intergenerational services, etc.) and through case studies.
For more information on Green Soluce and our services, please do not hesitate to contact us.