Professional Documents
Culture Documents
60
Years
of delivering value in the Middle East
2009
contents
two:
contents
six:
property investment
Due Diligence Funders Technical Advisor Insurance Reinstatement Cost Valuation Building Areas Definitions Building Services Standards The Great Opportunity for Sustainability Sustainable Development Outlook for Commercial Property 72 74 75 76 80 83 85 91
Chapter One
Davis Langdon
Foreword History of Davis Langdon in the Middle East Davis Langdon Worldwide Service Lines Industry Awards
Our Core Ideology, is to be passionate about recruiting and developing the best people, working with the best teams and delivering successful solutions that respect the environment. Our Goal is to build the best and most valued relationships in our industry.
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Foreword
Davis Langdons third edition of the Property and Construction Industry Handbook contains even more information than before, and we believe this will be of assistance to you when planning and progressing your projects. The Handbook is also a celebration of 60 years of adding value to construction projects in the region. Since starting business as Langdon & Every in 1948, Davis Langdons dedication to the Middle East has been continuous, with the region forming an integral part of the business today. We are pleased to publish exchange rates, comparative data, contract and cost information, etc, that we hope may be helpful in the evaluation of your proposed property investments. This year we have expanded the range of topics to cover sector key cost drivers, the outlook for commercial property and the great opportunity for supporting sustainable development. We have introduced a new chapter on specialist services which includes design management, specification consulting and strategy, value and risk. Central to our vision and approach to project delivery is that we continue to work collaboratively with clients and consultant colleagues throughout Europe and the Middle East. Our focus remains on providing the best quality of service to our clients through investment in our people, training and systems and to make a measurable difference to the value, cost and time of our clients projects. We hope you find the Handbook of interest and that the information it contains is of assistance to you on your projects in the Middle East, but we would welcome your feedback for, as ever, we are seeking continuous improvement in everything we do. Rob Smith Senior Partner Davis Langdon LLP
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Service Lines
In each location, resident directors and associates lead the practice. We employ qualified professional quantity surveyors, project managers, risk managers, construction programmers, cost engineers, engineers, civil engineers and mechanical/ electrical engineers whose skills and depth of experience ensure the excellence of our service to clients. Our combination of service lines is unique, enabling us to address different aspects of property ownership under the broad headings of Project, Property and Advisory services. Successful projects are born of sensible and realistic property advice that leans heavily on experience and the ability to act strategically. We know that cost, time and quality are directly linked project imperatives. We understand that clients are increasingly concerned about quality and that all involved in the process should provide evidence that they are meeting specified requirements. Service Lines in the Middle East: Cost Management Project Management Programme Management Engineering Support Services Specifications Consulting Design Management Strategy, Value & Risk
The Davis Langdon Middle East Advantage: Five regional offices and 60 years of experience in the Middle East Broad regional project experience across a variety of business sectors Independent professional advice Award winning value-added service Extensive database of regional and global project information Back-up from UK based specialist teams, including legal support and management consulting Back-up from global Davis Langdon teams
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Industry Awards
The consistently high standard of professional service provided by Davis Langdon is recognised throughout the construction industry, as evidenced by the following prestigious industry awards:
Sir Monty Finniston Award Young Project Manager of the Year Geoffrey Trimble Award 2007
100 Best Companies to Work For 2008 for 4th consecutive year
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Chapter Two
6 5 Half Year 2008 High 1525.0 5.5538 0.7086 50.902 3.7560 0.2758 3.6641 0.3770 3.6735 0.3867 3.7306 0.2598 3.5529 0.3657 3.6670 0.3771 49.422 0.6885 5.1804 1462.3 Low 1508.0 5.3638 0.7118 51.971 3.7537 0.2656 3.6436 0.3776 3.6737 0.3861 01/07/2008
Exchange Rates
two
2007
Currency
High
Low
Lebanese Pound
1515.3
1434.7
Egyptian Pound
5.9038
5.3459
Jordanian Dinar
0.7075
0.6882
Syrian Pound
51.357
49.514
Saudi Riyal
3.7550
3.6845
Kuwaiti Dinar
0.2900
0.2710
Qatari Riyal
3.6494
3.4721
Bahraini Dinar
0.3800
0.3603
UAE Dirham
3.6737
3.6440
Omani Rial
0.3849
0.3715
Statistics - 2007
KSA 17,820 km2 Kuwait 928,635 638,000 $57.69 billion $80,900 $2.77 billion $24.50 billion $32,100 $955.5 million 363,000 718,306 4,621,399 3,065,000 $167.30 billion $37,300 $10.71 billion Doha Manama Abu Dhabi 11,437 km2 665 km2 83,600 km2 212,460 km2 Muscat 3,311,640 920,000 $61.61 billion $24,000 $1.42 billion Kuwait Qatar Bahrain UAE Oman
Lebanon
Egypt
Jordan
Syria
Land Area
10,230 km2
995,450 km2
91,971 km2
184,050 km2
2,149,690 km2
Capital City
Beirut
Cairo
Amman
Damascus
Riyadh
Employment Number
5,462,000
6,563,000
$42.27 billion
$404.00 billion
$27.99 billion
$87.09 billion
$564.60 billion
GDP/Capita
$11,300
$5,500
$4,900
$4,500
$23,200
$972.21 million
$17.37 billion
$1.06 billion
$2.61 billion
$32.75 billion
2.3%
4.3%
3.8%
3.0%
5.8%
3.9%
6.4%
2.3%
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Chapter Three
8 7
Manila Hong Kong Beijing Sydney Joburg
three
Building Type
London
New York
Los Angeles
Singapore
Residential 2265 1900 2600 3065 840 1300 470 1700 500 390 870 415 980 1870 675 2850 875 1140 640 1810 620 2280 740 1450 495 2400 545 1350 455 1680 770 950 1040 1180 380 410
3150
2200
2200
4200
3300
3100
4850
3800
3400
5700
3800
3400
880
1900
1500
1870
2200
1950
Commercial (Shell & Core only) 1825 1900 2005 2200 2335 1050 920 780 1900 2320 2360 750 1850 730 1800 550 620 765 860 1090 1645 2060 2450 2580 3070 665 890 1140 1140 1400
- Low Rise
2275
1950
1700
- Medium Rise
3250
2500
2400
- High Rise
4550
3200
3000
- Medium Rise
4550
3000
2800
- High Rise
5750
3400
3100
Building Type
London
New York
Los Angeles
Singapore
Manila
Hong Kong
Beijing
Sydney
Joburg
1000 1700 1400 2555 3505 3505 N/A N/A 2190 1750
SGD 1.43 PHP 41.07
1170 1425 N/A 1210 1580 1580 1030 1200 630 720 2000 2350
HKD 7.80
420 460 550 2270 3025 N/A 2300 2950 N/A 908 776 1110
CNY 7.28
1060 1150 1375 1050 1688 1413 2100 3250 3250 2060 2720 1140 1710
AUD 1.15
360 490 700 905 1835 1330 1000 1080 830 980
ZAR 6.92
Industrial Light Industrial 1525 1000 Heavy Industrial 2425 1800 Attached Offices 2300 1600 Hotel (including FF&E) 3 Star/Budget 2900 2600 5 Star/Luxury 5550 4400 5 Star/Resort N/A 4400 Health (excluding FF&E and medical equipment) District Medical Centre 3100 5000 District Hospital 5175 6500
5200 9000
Retail (Shell & Core with public areas finished) District Centre N/A 1500 Regional Shopping Mall 3100 1700
1500 1600
GBP 0.51
USD 1.00
USD 1.00
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NB: Large fluctuations in exchange rates can create short-term anomalies. These cost rates (USD/m2) represent average competitive tender prices as at mid 2008 and are Inclusive of: service installations and preliminaries; but Exclusive of: external works and services; tenant fit-out; FF&E (furniture, fitting and equipment); professional fees; land; finance; etc and VAT (Value Added Tax) where applicable
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Doha Qatar Manama Bahrain Dubai/Abu Dhabi UAE
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Building Type
Beirut Lebanon
Riyadh KSA
Residential 1370 2050 2020 2600 1050 1150 800 700 2600 2300 1800 1850 2150 2500 950 1100 1550 1950
1120
1300
1260
1500
1300
1425
1650
1740
N/A
660
650
700
Commercial (Shell & Core only) 1780 2050 2460 2260 2600 3050 1450 1550 1700 1600 2000 N/A 1400 1700 2150 2050 2450 4000
- Low Rise
1000
1200
- Medium Rise
1300
1300
- High Rise
1400
1450
- Medium Rise
1430
1560
- High Rise
1750
1800
N/A
2900
Building Type
Beirut Lebanon
Riyadh KSA
Doha Qatar
Manama Bahrain
Industrial 1250 1500 1700 2330 4100 4790 3850 1570 1980 3500 1200 1550 3950 3250 2150 1450 1100 1250 1400 2350 3800 4100 4300 1400 2100 1000 900
Light Industrial
700
660
Heavy Industrial
1000
864
Attached Offices
750
1056
3 Star/Budget
1820
2000
5 Star/Luxury
2450
2800
5 Star/Resort
2730
3200
3300
3500
District Centre
1200
1250
1500
1560
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NB: These cost rates (USD/m2) represent average competitive tender prices as at mid 2008 and are Inclusive of: service installations and preliminaries; but Exclusive of: external works and services; tenant fit-out; FF&E (furniture, fitting and equipment); professional fees; land; finance; etc and VAT (Value Added Tax) where applicable
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Doha Qatar Manama Bahrain Dubai/Abu Dhabi UAE
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Building Type
Beirut Lebanon
Riyadh KSA
Residential 415 520 575 750 265 330 350 120 930 760 585 550 600 710 210 280 380 410
305
380
350
500
370
520
450
640
130
165
195
240
Commercial (Shell & Core only) 460 510 600 770 830 360 375 N/A 665 740 390 440 490 440 490
- Low Rise
320
380
- Medium Rise
340
430
- High Rise
360
460
- Medium Rise
400
510
- High Rise
415
540
Building Type
Beirut Lebanon
Riyadh KSA
Doha Qatar
Manama Bahrain
Industrial 345 380 440 670 1035 950 1405 445 575 1395 475 530 1185 970 645 465 455 550 550 480 820 880 1370 520 630 390 410
Light Industrial
250
320
Heavy Industrial
340
430
Attached Offices
360
460
3 Star/Budget
325
400
5 Star/Luxury
550
720
5 Star/Resort
690
870
N/A
N/A
District Centre
340
430
410
510
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NB: These cost rates (USD/m2) represent average competitive tender prices as at mid 2008 for service installations within buildings; and are inclusive of: subcontractor preliminaries and main contractor mark-up; but exclusive of: incoming service utility lines and connections; site distribution networks, associated builders work; and VAT (Value Added Tax) where applicable.
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Unit Beirut Lebanon Riyadh KSA Doha Qatar Manama Bahrain Dubai/Abu Dhabi UAE
Major Measured Unit Rates for the Middle East Region (USD) 2Q 2008
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Description
Basement Excavation m3 m3 m3 m3 m3 96 12 12 70 2.3 6.0 6.0 22 300 23 440 5.0 5.0 2.5 200 250 1.7 7.1 7.1 65 960 30 30 30 30 125 233 m2 m2 m2 kg kg kg m2 m2 215 27 25 240 2.4 8.0 9.3 34 440 96 125 233 218 90 140 220 212 14 12 21 16 14 12 20 11 9 26 170 180 170 35 40 150 1.9 5.5 5.5 40 540
m3
10
10
22
12
14
Foundation Excavation
Reinforcement in Beams
Description
Unit
Beirut Lebanon
Riyadh KSA
Doha Qatar
Manama Bahrain
Aluminium Curtain Wall System (including structural system) m2 m2 m2 m2 m2 m2 55 60 123 100 145 265 30 35 95 48 170 70 6 7.8 6 10 25 35 75 49 50 51 123 75 60 40 10 50 210 70
m2
700
615
1650
570
800
Average Quality Steel Stud Partition with Single Layer Plasterboard each side
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NB: (a) These cost rates (USD) represent average tender rates as at mid 2008 for average specification quality works, supplied and installed complete; but are exclusive of contractors preliminaries (site establishment, scaffolding, hoisting, etc) and VAT (Value Added Tax) where applicable. (b) Steel prices have been subject to significant fluctuations.
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Riyadh KSA Doha Qatar Manama Bahrain Dubai/Abu Dhabi UAE
Major Material Prices for the Middle East Region (USD) 2Q 2008
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Description
Unit
Beirut Lebanon
Ordinary Portland Cement 105 100 8 10 95 85 75 1600 1600 1920 1835 203 214 219 182 178 168 2060 1811 34 30 41 25 126 124 135 10 16 130 115 95 1650 1500 137 142 140
1) In Bags
Tn
95
2) In Bulk
Tn
85
Sand
m3
16
Aggregate
19mm Aggregate
m3
18
1) Grade 50 (OPC)
m3
N/A
2) Grade 40 (OPC)
m3
85
3) Grade 20 (OPC)
m3
75
Reinforcing Steel
1) High tensile
Tn
1500
2) Mild Steel
Tn
1500
Description
Unit
Beirut Lebanon
Riyadh KSA
Doha Qatar
Manama Bahrain
Hollow Concrete Blockwork 7 9 2100 732 432 0.14 0.25 0.22 0.19 986 522 0.32 0.27 1506 1234 4525 2350 35 18 18 2000 615 350 1.15 0.40 30 13 10
1) 100mm thick
m2
2) 200mm thick
m2
Structural Steelwork
Tn
1800
Timber
1) Hardwood Meranti
m3
1150
2) Softwood
m3
480
Fuel
1) Diesel
Litre
1.30
2) Petrol Premium 95
Litre
1.10
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NB: (a) These cost rates (USD) represent average tender rates as at mid 2008 for average specification quality works, supplied and installed complete; but are exclusive of contractors preliminaries (site establishment, scaffolding, hoisting, etc) and VAT (Value Added Tax) where applicable. (b) Steel prices have been subject to significant fluctuations
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Riyadh KSA Doha Qatar Manama Bahrain Dubai/Abu Dhabi UAE
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Description
Unit
Beirut Lebanon
Day
30
32
26
28
35
Steel Bender
Day
30
Carpenter
Day
35
Mason
Day
30
General Labourer
Day
15
Crane Operator
Day
45
Day
45
Day
30
Plumber
Day
35
Electrician
Day
35
Foreman
Day
50
Site Engineer
Month
2700
Construction Manager
Month
6000
NB: These cost rates (USD) represent all-in unit cost of respective operatives and personnel, including wages, salaries and other remunerations prescribed by local labour legislation; and average allowances for costs of employment; recruitment; visas/permits; paid leave; travel, accommodation; health and welfare; etc; but are exclusive of overtime working; contractor mark-up for overheads and profit; and VAT (Value Added Tax) where applicable.
These cost rates should NOT be confused with Contractors Daywork Rates.
Trades
Labour
: Material :
Plant
Air Conditioning Installations Masonry Metalwork Painting Paving Piling Works Plastering Precast Concrete Preliminaries Reinforcement Structural Steelwork Suspended Ceilings Tiling 17% 8% 20% 8% 5% 17% 23% 8% 30% 30% 70% 70% 63% 83% 92% 10% 92% 70% 83% 77% 10% 90% 20% 80%
15%
85%
0%
Lift Installations
10%
90%
Carpentry
20%
80%
0%
Carpet
5%
95%
0%
Demolition
35%
22%
43%
Drainage
15%
65%
20%
Electrical Installations
15%
85%
0%
Excavation
16%
14%
70%
Fire Protection
15%
85%
0%
Formwork
30%
70%
0%
Glazing
10%
90%
0%
Hard Landscaping
8%
42%
50%
In Situ Concrete
10%
90%
0%
Joinery
6%
96%
0%
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NB: The above are approximate average ratios across the whole region.
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Inflation/Escalation
There is no denying that mid 2008 heralds a construction boom extending from West Russia to East India, and its driving up the demand for construction resource and materials. Materials, components and plant, people on site, and design and allied consultancy professions are all in great demand. Inflation across the GCC ran at just 0.3% in 2001 but by 2007 it had shot up to 6.3%. The principal drivers are increased costs in labour, materials (cement, rebar, steel) and the cost of living. The latter has been driven by excessive hikes in rent and land costs. Inflation is now running at unprecedented levels across the region, and the IMF has recently revised its average forecast figures for 2008 from 6% to 7%. In the UAE, inflation is in reality currently in excess of 13%. Global construction industry Much of the boom in construction is being driven by the completion or start on site of mega projects like the Beijing Olympics, the forthcoming 2010 World Cup in South Africa and the 2012 London Olympics. But there are also stronger factors to consider. Urbanisation in the fast developing economies of Asia is having an even greater impact on the global demand for construction components. With 1.3 billion people in China and 1.2 billion in India, and increased liquidity due to buoyant markets, a massive demand for new or improved infrastructure will be a priority in those countries for the foreseeable future. The problem is that these regions have for decades been seen as the suppliers of cheap industrial products and labour force. With increased domestic demand and the restricted supply of raw materials, the impact of reduced availability and increased prices is now translated into higher global construction costs. Problems arising Across the GCC the problems of inflation and cost escalation are beginning to bite. Whilst there is no significant sign of the rate of construction slowing in the next three to five years, conditions are getting tougher. Perhaps those currently finding it toughest are some of the engineering, procurement and construction (EPC) contractors
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in the petrochemicals and heavy industrial sectors. Most of these projects are let on a design and construct basis, with the contractor providing a fixed lump sum cost which will include the price for the risk of future inflation. However, with contractors costs up by more than 50% of the original estimate in some cases, many are now calling for measures to assist them in the future. In Qatar for example, the government has now to its credit begun to recognise these issues and its Public Works Authority (Ashgal) is currently revamping contracts to include a price escalation clause for civil works projects. The creation of state-owned aggregate and steel companies will enable the government to curb increases in the prices of raw materials. In future, if contractors need items like steel, concrete and sand, they will be given the paperwork and they will go and get the materials from the appointed factories so they dont need to worry about paying for delivery, and if the prices go up, the government says it will take care of it. In July 2007, the government of Qatar also passed a threeyear law exempting imports of gravel, steel and cement from customs duties. But this law only applies to materials imported from outside of the GCC. If removing the duty is to be truly effective, some also believe it should be extended to cover other imported products such as aluminium, timber and panelling. Predicting price rises Could companies signing up to fixed price contracts in 2004 and 2005 have foreseen the sudden increase in prices? The surge in materials price increases that swept across the global construction industry in 2004 was in fact reported to be subsiding in 2005. The average construction inflation for 30 countries in Europe, Asia, the Middle East, Latin America and North America had slipped back to 4.9%. In 2004 higher steel prices had helped push construction inflation in these countries to 6.3%. Before that, global construction inflation was running at just 3-4% for several years. The other global price driver, energy, was however starting to translate into discernable construction cost inflation. The rising cost of oil has not only driven the GCC economies, but has had a sideways impact on the cost of the supply of materials
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back to the region as global production and delivery costs also increased. Since the mid 1980s the inflation adjusted price of crude oil on NYMEX had been generally under $25/barrel and was still at this level in September 2003. A series of events led the price to reach over $60 by August 2005, surpass $75 in the summer of 2006, fall below $60/barrel by the early part of 2007, then rise steeply, reaching $92/barrel by October 2007 and $99.29/barrel on 21 November 2007. Throughout the first half of 2008, oil hit several new record highs and has been over $140. The reasons behind these price rises are: ecline in petroleum reserves worldwide D Worries over peak oil Middle East tension Oil price speculation
A series of recent short term events have also had an impact on oil prices: North Korean missile launches The crisis between Israel and Lebanon Tensions over Iranian nuclear energy However, the biggest underlying factor contributing to the current rise in worldwide prices is the increasing demand from the expanding economies, mainly China and India, and the curtailment of supply through the OPEC oil cartel. What is the effect? To put things in context for the region, the six Gulf Arab states together earn a further $55 billion per year each time the oil price jumps $10 a barrel. Higher oil revenue combined with prudent spending by Gulf governments has created solid macro foundations which are helping to cushion the storms being felt in other global markets. The medium term picture is still bright. There is still a massive wave of projects under construction or in the pipeline and the region is now the biggest market for plant, construction machinery, vehicles and equipment. Demand is expected to carry on growing by up to 20% over the next four years.
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There are over 1,250 projects worth over $931 billion underway currently in the UAE alone, which houses more than 35% of the heavy equipment available worldwide, while 25% of the worlds tower cranes are in use in Dubai alone. Dubailand, with development worth $182,353 billion now progressing, has replaced King Abdullah Economic City in Saudi Arabia ($129,976 billion) as the regions biggest construction project currently underway. The third largest project is Kuwaits Silk City ($86 billion). Overall, Saudi Arabia has the most construction activity with 1,026 projects valued at $1,102 trillion currently underway in the Kingdom. Whilst the UAE is in second place for overall construction project value, it has the largest number of active projects. Construction activity is set to grow still further until 2010, when according to latest market reports it is forecast to begin to slow. However supply constraints are bound to bite further and the impact of increasing inflation could well slow activity sooner. Demand for ready-mixed concrete and reinforcing steel is set to double by 2009, and its a similar story for stone cladding. Mitigating the impact One things for sure - where theres a surplus in liquidity there will be a continued hunger for construction activity. Mitigating the effect of inflation and cost escalation will require more innovative and collaborative approaches to construction procurement. The old traditional methods are increasingly being replaced by more fast tracked processes and are becoming more project management driven. Whilst governments in the GCC states work up plans for reducing their dependence on supply of materials from other parts of the world, developers, consultants, occupiers and contractors are all beginning to recognise the need to work together to achieve desired objectives. With a better knowledge of likely inflation effects, cost escalation clauses are also being introduced and these will enable contractors and clients to develop a more equitable level of trust and cooperation throughout the project. All in all, the region is in no mood to slow down and inflation is just one consequence to be overcome in the quest to build a brave new world.
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Because of the vague nature of the design information, cost models tend to have a low degree of cost certainty when produced. However, because they can be produced at a very early stage they can help set parameters when considering what to develop. As a consequence of the way in which they are used, they must be flexible to accommodate project change. Cost models can be prepared from benchmark data. Often existing cost models for a generic building type are used as a starting point and adjusted to reflect a projects context. Such adjustments can include size, quality, timescale, location, site conditions, procurement method, planning issues and market attractiveness. Generic models can also be used as a checking and comparison tool. Cost Plans Once design information is available it is possible to break the project into elements or work sections and a more detailed estimate, generally termed a cost plan. Full cost estimates normally take the form of cost plans which detail estimated costs in elemental format. The objectives of a cost plan can vary depending on the stage at which it is completed. Normally it is prepared to set cost targets for the designer during the design development stage and to enable the design team to develop design solutions within the discipline of a budget, thus avoiding abortive design work. Refinements to the cost plan are made as the design develops, with plans for action agreed with the designers when design development creates divergence from the cost plan. The process of cost planning should therefore be viewed by the client and the design team as the product of collaborative teamwork. The agreed cost plan is used as a control document, key to managing change during the design development stage of a project, enabling best value solutions to be achieved. Cost plans vary according to the level of detail available and the format of the cost plan will usually be elemental, based on the Standard Form of Cost Analysis, published by the Royal Institution of Chartered Surveyors (RICS). Cost Checking At all stages of the project design, a continuing process of cost checking is necessary, in order to confirm that current design solutions are in line with previously set targets. Cost checking needs to be an integrated process involving all members of the design team.
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Stages in Preparing a Cost Estimate 1. Project Briefing All information available about the project and the clients objectives should be ascertained. 2. Specialist Advice Davis Langdon has in-house specialist teams to advise on MEP, structural works and cladding, and this provides a valuable input into the estimating process. External specialist advice is also sought where required. 3. Measurement The level of measurement undertaken will depend on the level of design information available and is generally undertaken directly from the AutoCAD drawings. Area measurements are measured in accordance with the RICS Code of Measuring Practice, and elements are measured in accordance with the Principles of Measurement International (POMI). 4. Pricing of the Estimate Pricing of the estimate is based upon the extensive database of information held by Davis Langdon. In addition we have access to external databases and specialist sources that can be used when necessary. 5. Presentation Estimates are presented in a standard report format, although these can be adapted to suit any specific project or client requirements. Davis Langdon uses bespoke cost planning software in the preparation of its estimates. The information contained in the estimate will generally include: Estimate cover Contents page Executive summary Basis of estimate Assumptions Exclusions Schedules of areas Pricing pages
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In addition we may include: Schedule of changes (reconciliation with previous estimate) Benchmarking exercise Specification Reduced layout drawings Cashflow Risk analysis
6. Estimate Review & Feedback An estimate review process is conducted with the client and the design team to ensure that the assumptions and basis of the estimate are in line with the latest information and clients requirements. Factors Affecting the Overall Project Price Levels The following factors will have an influence on price level: Method of procurement Regional variation Programme Recent changes in legislation Quality level and specification Project specifics Exclusions Contingencies
Key Cost Drivers Particularly in the early design stages, it is important to understand the key factors that determine the overall cost of the project. These vary from one building sector to another but some generic examples include: Type of faade Wall-to-floor ratio Structural grid, clear spans and design loads Storey heights Atrium Abnormal costs Industry sector Level of quality and specification Car parking ratios and strategy
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Benchmarking Benchmarking can be used to compare the cost and design criteria of various projects with the benchmark set by similar projects. Project benchmarking can involve comparing whole or elemental costs but can also be used to compare the performance of buildings in the following areas: Speed of construction Net : gross floor area efficiencies Wall : floor ratios Structural design criteria Services design criteria Preliminaries costs
Benchmarking comparisons involve adjusting the cost of projects onto a like-for-like basis to allow for location, time and procurement route variables. This benchmarking information helps Davis Langdon to play a pro-active part in cost management and value engineering discussions.
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Tall Buildings
Across the region, tall buildings highlight the prosperity of the Gulf nations. These buildings have come to characterise the renaissance of the Middle Eastern economies, and to signpost destinations for commerce, tourism and luxurious living. The recent surge in development of skyscrapers is evident in cities further afield too, as new urban centres in East Asia, such as Seoul and Shanghai compete with more established financial hubs. High profile landmark towers are in development in London and Chicago, New York and Paris, as these cities vie to maintain their position as world leaders. In 1988 the worlds ten tallest buildings were all in North America, though by the end of 2008 eight out of ten are in the Far East. However, of buildings completed in 2007 four of the ten tallest are in the Middle East, more than in any other region, and projections to 2020 show that the three tallest buildings in the world will be in the Middle East. This year almost one quarter of all tall buildings under construction are being built in the Middle East, drawing the most talented teams to the region. The development of tall buildings around the world has given rise to a very global industry of developers, designers and consultants who between them are creating skyscrapers that can respond effectively to the economy, culture and climate of local sites. Globally distributed teams are increasingly used: a Middle Eastbased investor backing a London tower designed by American architects, or American engineers and European consultants collaborating on a tower in the Gulf region. This requires new methods of team organisation and a greater awareness of potential regional differences in the practice of development, design, and construction. Davis Langdons extensive experience of tall buildings - some 200 completed projects and 100 in design or under construction - combined with our network of offices around the globe, means that we are in a unique position to advise clients by harnessing our collective experience and skills through our Tall Buildings Specialist Group. With a track record of rising to the technical, organisational and strategic challenges of some of the tallest buildings in the world, our global network of specialists support our local teams in effective project delivery. By providing strategic advice and
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detailed hands-on knowledge of global and local markets early in the design process, our Tall Buildings Specialist Group offers clients certainty that optimal solutions have been sought for design, procurement, and construction. Davis Langdon is currently engaged on some of the worlds most breathtaking tall structures: Moscows 612m Russia Tower (Foster & Partners); Guangzhous 610m TV Tower (IBA and Arup); Shanghais 492m World Financial Center (Kohn Pedersen Fox); Abu Dhabis 327m Landmark Tower (Pelli Clarke Pelli); Londons 306m Shard of Glass (Renzo Piano Building Workshop), and Beijings 234m CCTV Tower (OMA and Arup). We pride ourselves on our contribution to the success of these projects.
Optimisation of the design, procurement, construction, cost and value of tall buildings demands an in-depth knowledge of the cost drivers and value opportunities specific to this sector. Shape, structure, faade, programme, procurement, and, increasingly, environmental strategy are all key to bringing viable propositions to the table and creating sustainable towers for sustainable cities.
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Shape The shape of a tall building determines its cost effectiveness and value efficiency at least as much as (and usually more than) its height. This might seem counter-intuitive, as taller towers have higher structural costs. However, key efficiency ratios in the cost and value of a tower, such as wall:floor ratios, are directly affected by building geometry. Shape is critical in cost terms, not least because it has a significant influence on the two key elements, structure and faades. Structure A buildings height and slenderness combine to affect the fundamental structural options. The ultimate solution takes into account core location, column spacing, mass and complexity, given that the larger percentage of structural costs lies in fabrication and installation. Efficiency must also be determined with respect to lettable floor area, as cheaper-cost solutions can drive down the value of the finished product by reducing column-free spans and taking up lettable space. The impact of wind, which increases disproportionately at height, means that many of the most effective structural solutions have benefited from wind tunnel testing, reducing the wind loadings through manipulation of shape. Faade Tall buildings in the Middle East are typically designed with a sealed external envelope to counteract the heat, humidity and sand. This type of faade solution, layers of glass, the coatings used on them, and systems of ventilation between them, can be used to control internal climate without undue reliance on mechanical systems. In this way the faade becomes a key component of a towers sustainability and efficiency in operation. The technical challenges of faade manufacture lead to strong global competition for the output of a select group of quality faade fabricators. The logistics of design and installation, although key to the construction programme, should be determined in conjunction with finding the correct procurement route within global supply chains.
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Programme While demand for the skills, materials and technologies required for tall and complex buildings continues to grow, the value attributed to these project commodities will continue to escalate. The result is the inflation of construction costs which can be seen in markets around the world. Optimising a design for buildability can shorten the construction programme, bringing down the financing costs and reducing the risk of price rises during the construction phase. Greater savings can be made through phasing of works to allow phased opening (and thus earlier income streams) and to allow works that would normally be carried out sequentially to be carried out concurrently. Maximising buildability requires the early planning and programming of the construction project, with detailed consideration of alternative methodologies. Importantly, this should be reinforced through ongoing buildability reviews. Procurement Procurement methods and the contracts that support them are perhaps the aspect that varies most across different countries, legal systems and markets. In procurement, opportunities arise to avoid cost premiums caused by supply shortage. This is achieved by planning design and fabrication with an awareness of the capabilities found in global, rather than purely local, supply chains. The logistics and legalities, while complex, broaden the choices available to the design team in terms of quality, cost, social and environmental impact. In tall and complex projects the importance of procurement strategy is not only heightened due to the requirement for specialists and good quality management resource, but also benefits from a global view. We therefore ensure close co-operation between our Tall Buildings and International Procurement Groups. The Key to Success: Specialists Davis Langdon is repeatedly appointed by clients and architects to collaborate on the most exciting tower projects in the world. This reflects the industry-leading knowledge of our tall building specialists and the enthusiasm, innovation and professionalism that our teams bring to the design, procurement and construction of towers around the world. Our commitment to continuous improvement, through the practical application of the thousands of hours expended on research, is testament to our determination to avoid complacency.
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The iconic towers that we see as our strength all benefit directly from the data gathered on more than 300 high-rise projects to date. Our internationally recognised specialists in structures, faades, international procurement, sustainability and programme management contribute to the delivery of sustainable towers, on time and on budget.
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Building layout Building layout is the primary determinant of the efficiency of a scheme. In income terms, it is mainly driven by the net:gross ratio and the total area and mix of lettable space. In cost terms, the main drivers are: Building orientation - includes requirements for shading and enhanced faade performance. Wall:floor ratio - major factor as external faades typically account for 15 to 25% of construction cost. Ratios of between 0.4 and 0.5 are good but a variation of 0.1 can change overall construction costs by 4 to 5%. Extensive party walls will result in reduced external wall costs, but the building may require an atrium to provide adequate natural light. Floor-tofloor height has a marginal impact on overall cost. Plan and elevation complexity - curves, set backs and other features will have a significant impact on design, buildability and cost, including the loss of economies of scale associated with standard work.
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Vertical circulation and means of escape requirements - this is determined by the size and layout of the floorplate and the evacuation strategy. Structure The principal variables are loadings, spans, building height and requirements for load transfer. For steel frames, total piece count and the simplicity of connection detailing also affect total cost levels. Small increments in live load provision have a marginal impact on structure cost, and some developers specify higher loads throughout to increase the flexibility of the floorplate. Grids are a different matter. Column-free space is valued by many users and spans in excess of 12m incur premium costs associated with substructure, superstructure and the depth of section. Faade The main variables affecting the cost of the envelope are the wall:floor ratio, the aspect ratio, which also influences internal heat loads, and the specification of the faade itself. Unitised, highly glazed, single panel curtain wall has become the faade of choice. Externally ventilated deep-cavity double wall faades that are specified to provide improved thermal performance may cost between $1,400/m2 and $1,900/m2. These will be required on an increasing number of projects to meet higher LEED or Estidama ratings. Other potential cost drivers associated with faades include: Security features Curved and faceted work Architectural framing solutions to atrium walls and entrance screens Services The main drivers for variation in services costs are heat loads, requirements for mechanical cooling, the selection of air-conditioning systems, and the extent of back-up systems required. In city centre locations, the potential requirement for local reinforcement to the mains electrical supply has become a further source of cost variation. As the market becomes more sophisticated, the developers opportunity to differentiate the product is increasingly based on the ability to anticipate customer need, providing a flexible building that can respond to specific tenant requirements, without investment in unnecessary features such as capacity for trading or high levels of redundancy in incoming services
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and main plant. Opportunities to align the building design to enhance tenant value include: Factors that sell the building Factors that support effective occupation Features that drive staff productivity Features that contribute to staff recruitment and retention
Mixed use schemes Because of political, planning and social pressure rather than investor demand, mixed use has been adopted as the new planning standard, aimed at revitalising regional centres and securing broader community benefits such as contributions to transport, infrastructure and community residential provision. One of the complexities of mixed use is the considerable separation of residential and commercial expertise involved in design, construction, marketing and investment. In some cases, different design teams may be engaged to design the separate elements. Because of the lack of shared knowledge, opportunities to add value on schemes can be missed, and projects can fall short of their objectives. When planning mixed use schemes, the following issues will have a substantial influence on the development mix and the initial layouts of the development: Size of the scheme Separation of uses Influence of the primary use Retail and residential Location, location, location is the mantra for both retailers and residential. Regional centres provide the convenience and vibrancy that certain groups of residents value, and the critical mass of shoppers upon which retail absolutely depends. Retail and residential also benefit greatly from the enhanced transport infrastructure plans in these centres, from central facilities such as parking and service yards and from secure, managed environments. Thereafter, the priorities for each use diverge. For retail developments, the main issues include: Permeability and footfall Retail mix Preserving investment value Sightlines and visibility Access and servicing Resilient operation
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Design solutions for mixed use developments Successful design and construction of mixed use schemes is focused primarily upon separating the two uses and managing interfaces where they occur. From the point of view of Building Regulations, mixed use does not present major challenges. However, the requirement for separation of uses and complex servicing arrangements inevitably add further pressure on developments with challenging cost targets including factors such as: Transfer structures Privacy Services distribution Main plant Sustainability Car parking Management of systems Efficiency Unit size Access and means of escape Orientation
Stadiums Reconciling the needs of different stakeholders, different sports and the need to either exploit or minimise the visual impact of a stadium all have a potential impact upon the cost and revenue streams associated with a stadium scheme and the quality of the spectator experience. In putting together the business case for a project, a wide range of cost and value drivers need to be considered. The primary drivers are as follows: Capacity Seat capacity is driven by the business case and the ambition of the club and will determine the following key areas of expenditure: The number of tiers The type of roof and the extent of shelter/shade provided The total size of building in terms of footprint and floor area The extent of support facilities and concession areas required
Gross floor area Gross floor area is closely related to capacity and also directly drives cost. Schemes with a high area per seat will generally be more expensive. Where extra area delivers value though hospitality, retail or club facilities, the additional capital cost can be tested in a business case.
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Pitch level In a new build stadium, it may be possible to excavate the playing area and lower tier below ground level. Shape and arrangement of stands Arrangements range from continuous bowl arrangements, through stands with infill corners, to conventional straight stands. Bowl designs are only feasible on complete redevelopments and typically incur a cost premium of up to 5% associated with structural complexity, curved/faceted components, reduced space efficiency and an increased footprint. Straight stands are cheaper to construct due to simpler structures, repetitive detailing and more efficient space planning. Adopting a plan based on separate straight stands also enables capacity to be added incrementally. Tier arrangement Requirements for multiple tiers are determined by overall ground capacity and, to a lesser extent, by the available development footprint. Single tier stands are more cost-effective but offer poorer sightlines as capacity increases. Roof Clear span structures are required to provide unobstructed views and weather protection to all seats. As the roof is the dominant element, design statements are often made with either the roof or its structure. The primary structural options available to the project team, in order of cost and complexity, are: Goal post/arched trusses Cantilevers Tension structures Spectator comfort The primary determinants of spectator comfort relate to space standards on the tier, provision of facilities and ease of navigation. Quality of seats may also affect spectator satisfaction. All year operation Addition of facilities to increase event days and extend the range of uses of a stadium is a significant cost and value driver. The benefit is in diversified revenue streams which need to be offset against commercial risk, together with increased costs in the following areas:
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Gross internal floor area additional accommodation for services/concessions that may extend beyond the boundaries of the stadium Additional changing, club administration facilities and concessions associated with ground sharing Premium fit out to executive boxes to enable year-round usage as meeting suites. Concessions Space planning and services provision for catering, retail and other concessions can result in over-provision or abortive works unless early input is received for consultants/franchises. Capacity for expansion Designing in structural capacity for the expansion of the basic stand will result in premium costs for frame and superstructure, and potential abortive costs of roofs if demolished within their design life. It is more economic to design to the full capacity of the intended long-term use, so provision for expansion should only be considered if growth is anticipated within a defined timescale. Other drivers associated with a development include infrastructure costs associated with new sites, or the demolition, access and phasing costs associated with working with an existing stadium.
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Chapter Four
Project Management
Public Private Partnership Middle East Forms of Contract Integrated Project Management Planning and Programming Procurement Routes Partnering
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This is attractive to the public sector (apart from the obvious utilisation of private finance rather than the public sector paying in full upfront for procurement of its capital assets) as it provides long-term certainty, an integrated approach for the lifetime of the service, greater value for money and savings, effective and efficient provision of new facilities, innovative service delivery solutions, risk transfer to the private sector and improved services. The service delivery is likely to extend across a period of ten, fifteen or twenty-five years, requiring co-operation, collaboration and a long-term view of the project. However, despite the positive promotion of PPP in the Middle East, the PPP model has attracted criticism in countries where it is well-established, including: High bid costs. A suggested solution is to restrict the bidder lists to a maximum of three participants, to enable improved management of bidders and decision-making. Affordability. Solutions might be an affordability test before a scheme comes to the market and production of a betterdeveloped brief and specification before the project is sent out to tender. Time taken to reach financial close. Improving management, training, experience and accountability of project teams can help reduce delays.
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Lack of flexibility. The PPP model requires early, accurate and realistic planning and analysis to enable long-term commitment. Disproportionate risk allocation. The public sector might consider taking on board and retaining those risks that the private sector is unable to manage or adequately insure. Nevertheless, the PPP model retains an ever increasing share of the projects market and most projects are reported to be performing satisfactorily or better than expected. It continues to expand in use throughout the Middle East and further afield but will require transparency and accountability to be fully embraced for its continued success. The PPP model is not a one size fits all solution. As with anything new and breaking with tradition, the parties must be well-advised and fully briefed, with the right mindset and strong partnerships in place. Paul D Taylor, Partner HBJ Gateley Wareing, Dubai Office Email: PTaylor@hbj-gw.com Tel: + 9714 321 9999
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contractual terms can be modified to respond to a reduction in contract price. Bahrain Government work in the Kingdom of Bahrain is completed under an old JCT Standard Form of Contract, where the terms and conditions have now been superseded by existing case law. Currently the Bahrain government is in the consultation phase of the process of updating their contracts and specifications to reflect international standards, incorporating the necessary amendments for the local market. Private developers predominantly use a more updated form of either FIDIC or JCT standard forms, as both are well understood by the local market. Most of the work completed in the Kingdom of Bahrain was originally under a traditional lump sum form of contract, where the design is completed up front and a price agreed with a contractor before a start is made on site. However, many of the new developments are looking at faster procurement routes and adapting to the market difficulties that are prevalent within the Middle East. These include material and labour shortages and too much work for too few contractors through the inclusion of price fluctuation and re-measurement clauses to make the schemes attractive to contractors. Design and Build and two stage procurement are growing in use across the Kingdom and, as more international private developers work in Bahrain, with time as their main driver, the market continues to adjust to reflect this demand. UAE Construction contracts in the UAE are predominantly based upon the FIDIC Forms of Contract. The growing number of large scale developers and major repeat clients in the region has led to the development of bespoke forms of contract, tailored to each individual client. Such contracts generally use the FIDIC 4 form as a basis, amended to a greater or lesser degree depending upon the risk profile of each client. This also applies to works procured by Dubai Municipality. Abu Dhabi Municipality, however, bases its contract on a modified FIDIC 3 form. Contracts based on the FIDIC Construction Contract 1st Ed (1999) are now starting to be used in the UAE, but in general the market remains firmly rooted in the FIDIC 4 form.
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Civil works contracts within the UAE are mostly procured on a re-measurable basis, whereas building works will generally be based on a fixed price lump sum. However, there are exceptions: more and more clients are procuring projects using a fast track approach and will therefore incorporate a re-measurable element, reflecting those parts of the design which are incomplete at tender stage. Design and Build contracts are used on some major projects, but this procurement route is not yet commonplace. The increasing tendency for clients to demand a fast track approach to projects does require a greater design input from the contractor, but this requirement is not always formalised in the contract wording itself.
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Integrated project management is based on four distinctive phases in the project life cycle: 1. Business Needs & Project Inception In the early stages of a project, Davis Langdon creates the conditions for success by defining a set of value drivers based on an understanding of all stakeholder interests and requirements. We consider needs, identify risk and can assist with business planning. Where appropriate, we assist with the production of feasibility and cost estimates, the development of master plans, option appraisals, overseeing of site acquisitions, management of planning consents and advice on funding strategies. We work with clients to manage the appointment of suitable consultants, including the agreement of services and fees. 2. Project Strategy & Development At the early development stage we compile strategic and design briefs and produce an overall project execution plan. We oversee the production of costs to agree budgets and provide a detailed master programme for project delivery. We recommend the most appropriate procurement strategy and manage the selection of the best value construction team. We provide a single point of contact for the client when dealing with third parties, contractors and suppliers. 3. Project Control & Delivery Prior to commencing, we make sure that a commercially viable solution has been agreed, that all contracts are administered in the correct form and that necessary management procedures are in place. We set up systems and processes to enable the sharing of information, management of change and identification of potential risks to successful project delivery. We monitor quality, time and cost and provide leadership to the team, resolving issues, liaising with third parties, and reporting on progress as agreed with the client. We place considerable emphasis on health and safety and check that appropriate procedures are followed throughout. 4. Commissioning & Asset Management In the final stages of the project, we oversee commissioning, agree completion, settle final accounts and enable the smooth transition of the asset through to ongoing management. Post-handover, we instigate project reviews and feed lessons learned to the client for future improvement and development.
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Benefits of planning
Business Proposals
Review the request for proposal (RFP) Develop overall programme proposal for the project Identify constraints and risks List assumptions
Constraints and assumptions are identified to help in the pricing strategy The programme validates whether the clients expectation can be achieved
Prepare the master programme encompassing all stages in the projects life cycle Identify constraints and risks List assumptions Identify and integrate the statutory approval process into the master programme Identify any phasing requirements Assist the project manager in preparing the project execution plan Assist the project manager in developing the procurement plan
The master programme and PEP are contractual deliverables The master programme identifies all the phases and activities in a project
Design Stage...
Update the programme at regular intervals to record the status of the project
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...Design Stage
Regular updating helps to identify any delays, and corrective actions can be implemented to avoid any threats to the clients project objectives Regular updating helps to identify the progress trends, thereby helping the project manager to control the project Tender programmes will enhance the contractors understanding of the project Review of the contractors submission will ensure clearing any programme related ambiguities before contract is signed
Develop milestone programmes to include in the tender documents Review and assist in developing the programme and progress sections of the tender documents Develop contractual milestones for the project in line with the clients goals and objectives Attend pre-bid and post-bid meetings Review the tender programmes submitted by contractors and identify any programme implications
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Tasks undertaken Benefits of project by planning of planning life cycle Most clients and construction professionals can name at least department stages
one project that was over budget, time or did not deliver the required quality levels expected. All clients rightly expect buildings to be on and budget with level of time Issue programme andan agreed A proper contract quality, with the riskprogress rightly managed reporting by their professional programme is a guidelines toyourselves the vital tool other to monitor and contracting team. But ask this... what contractor and control the multi million or in terms of the Middle East, multi billion dollar Guide theno contractor project business, goes from having staff or expenditure, to the final developing the construction A proper resource delivery of a uniquein product as quickly as the contract programme plan is vital for the industry? This is why the right procurement process, systems byimperative. conducting success of the and approach are so To use an analogy, a new model of car at $50,000, has Review and comment of the contractors enormous planning, refinement and design occurring very on the contractors programme early in the development process, the cost of which is are way in programme updates excess of the cost the delivery of the individual car. Into the of Review and comment necessary construction industry, have the luxuryidentify of rolling out on we the dont resource any threats thousands of the same product, which is why it is important schedules, equipment to the project we all learn from the successful delivery of what are known schedules, submittal milestones in the industry as the best buildings and ask they were schedules etc why Claims avoidance Construction submitted the strategy can successful. In doing this, we by can come to understand which contractor many Stage methods procurement should be followed, andprevent why it is Issue claims from important to consider therecommendation structure and process for delivery to the consultant for developing from the start.
the approval of the Programme contract programme analysis can of assist Davis Langdon have developed strategies for the delivery and work, other supporting proper claim buildings that we know as demonstratedin by hundreds documents resolution of successful projects we have delivered. Developers that Monitor the contract build regularly in the Middle East have a real opportunity to programme updates learn from this knowledge, from our experience in done by gained the contractor developed cities around the world, maximising their time, cost Monitor the adequacy and quality mix whilst adhering to a process that increases of resources deployed the likelihood of building by thesuccess. contractorOur strategy is known as DLivering Success,against (see page 57). Studies conducted with our the plan key clients who regularly undertake development work, have Identify any slippages and trends shown that buildings can be delivered for 10-15% less cost Initiate Buildings claims when procured correctly. are more likely to be on time avoidance strategies when procured correctly. Buildings are more likely to meet our Assist inprocured claims correctly. So what is the clients expectations when analysis for your building? Which strategy, right procurement approach approach, team behaviours, attitudes, communication channels, budget and programme delivers the best approach and how can programme workshops project Proper monitoring
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Benefits of planning
Close-Out Stage
Review the as-built programme and supporting documents Archive the reports generated in the project Document any lessons learned
As-built programme is a contractual document Reports are necessary to conclude any contractual disputes Lessons learned are documented for use in future projects
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Procurement Routes
Most clients and construction professionals can name at least one project that was over budget, time or did not deliver the required quality levels expected. All clients rightly expect buildings to be on time and budget with an agreed level of quality, with the risk rightly managed by their professional and contracting team. But ask yourselves thiswhat other multi million or in terms of the Middle East, multi billion dollar business, goes from having no staff or expenditure, to the final delivery of a unique product as quickly as the construction industry? This is why the right procurement process, systems and approach are so imperative. To use an analogy, a new model of car at $50,000, has enormous planning, refinement and design occurring very early in the development process, the cost of which is way in excess of the cost of the delivery of the individual car. In the construction industry, we dont have the luxury of rolling out thousands of the same product, which is why it is important we all learn from the successful delivery of what are known in the industry as the best buildings and ask why they were successful. In doing this, we can come to understand which procurement methods should be followed, and why it is important to consider the structure and process for delivery from the start. Davis Langdon has developed strategies for the delivery of buildings that we know work, as demonstrated by hundreds of successful projects we have delivered. Developers that build regularly in the Middle East have a real opportunity to learn from this knowledge, gained from our experience in developed cities around the world, maximising their time, cost and quality mix whilst adhering to a process that increases the likelihood of building success. Our strategy is known as DLivering Success, (see page 65). Studies conducted with our key clients who regularly undertake development work, have shown that buildings can be delivered for 10-15% less cost when procured correctly. Buildings are more likely to be on time when procured correctly. Buildings are more likely to meet our clients expectations when procured correctly. So what is the right procurement approach for your building? Which strategy, approach, team behaviours, attitudes, communication channels, budget and programme delivers the best approach and how can we best combine these to lead our clients to ultimate success?
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Davis Langdon offer invaluable early advice to help determine the right procurement approach, adding the most value throughout the building process. It is this considered understanding of our clients time, cost and quality requirements that maximises the value we can offer. Listed below are some of the procurement strategies that are followed in the industry, but the real challenge is mixing the right approach for an individual clients needs: traditional lump sum: design by the clients consultants is completed before contractors tender for, and then carry out, the construction. The contractor commits to a lump sum price and a completion date, prior to appointment. The contractor assumes responsibility for the financial and programme risks for the carrying out of the building works whilst the client takes responsibility and accepts the risk for the quality of the design and the design team performance. accelerated traditional: as above, but procured in the market place before being fully designed (normally 80-85% designed), leaving more simple elements of the building to be procured once the contractor has been appointed. It is important to understand the way in which a client procures the remaining elements of work with a contractor under this approach. It may also involve the procurement of an early works package for enabling and/or piling works. two stage: a contractor is invited to become part of the project team in the initial stage, usually by way of a preconstruction fee. They design and procure the project on behalf of the client, until such time that a second stage lump sum offer can be agreed which should be before construction begins on site. An understanding of the original appointment and the subsequent framework under which the second stage is agreed are the important aspects of this approach, as well as working with transparency and trust. design and build: detailed design and construction are both undertaken by a single contractor in return for a lump sum price. Where a concept design is prepared by a design team employed direct by the client before the contractor is appointed (as is normally the case), the strategy is called develop and construct. The contractor commits to a lump sum price, for completion of the design and the construction, and to a completion date, prior to his appointment. The contractor can either use the clients design team to complete the design or use his own team.
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management contract: design by the clients consultants generally overlaps with the construction. A management contractor is appointed early to let elements of work progressively by trade or package contracts. The contracts are between the management contractor and the trade contractors, rather than being between the client and sub-contractors (as under the construction management arrangement). The management contractor in theory assumes responsibility and financial (and programme) risks for the works, but in reality this is diluted by the terms of the standard form of contract, so his liability is similar to that of a construction manager. design, manage and construct: similar to the management contract, with the contractor also being responsible either for the production of the detailed design or for managing the detailed design process.
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Partnering
Take your Partners With the market at present led by contractors and consultants, clients are currently examining new approaches to procurement in order to ensure that quality contractors and consultants are attracted to their projects. There is a commonly held belief that substantial improvements can be achieved in the procurement of construction projects through the early integration of the whole construction and design team into the procurement process. The aim of such integration is to create certainty, minimise disputes, improve efficiency, eliminate waste and maximise the best performance of all project team members. However there is another commonly held belief that to bring about such changes would require a considerable shift away from the deeply embedded blame culture prevalent in the construction industry. How can this be achieved? Project partnering may be the key. Project partnering has developed as a set of collaborative management techniques necessary to bring about just such a cultural change. It is a new system for achieving the successful planning, design and construction of any project. On a practical level project partnering provides clear, robust and fully integrated techniques for bringing together and holding together the project team (which includes the client, the contractor, sub-contractors and all consultants with design input). These techniques allow each team member to understand what others have agreed to do and when they will do it, providing a fundamental means of sustaining improved performances throughout the duration of the project and achieving a higher standard of results on completion. However it is important that project partnering is distinguished from strategic alliancing. The latter is the grouping of a number of projects in order to obtain the benefit of long-term relationships, whilst project partnering concerns the delivery of a single project. However the same partnering team and processes can be applied on several different projects. The key to a successful partnered project is communication. By getting all the team members talking to each other to a greater degree and at a much earlier stage, not only are many of the usual pitfalls avoided but numerous advantages are gained.
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Firstly the integrated approach encourages maximum input into design development from the contractor and sub-contractors, thereby allowing a greater degree of value engineering to take place early on before designs are finalised. Remember also that the client is a member of the team, and will have much greater influence over the early stages of the project and therefore is less likely to issue changes and variations later on. Secondly it allows implementation of a much more sophisticated approach to risk management. By working together the whole project team can identify each relevant risk and put forward proposals for risk elimination, reduction, sharing or apportionment as appropriate. In addition, carrying out this process prior to start on site will help to avoid disputes and claims at a later date. Partnering also encourages communication to continue after commencement of the project through the use of a core group. This consists of individuals from each of the team members who meet regularly to review and stimulate the progress of the project and consider and implement proposals for improved value management. In keeping with the principle of effective communication, partnering introduces the concept of early warning. As soon as any team member becomes aware of an actual or potential issue that may affect the smooth running of the project, they are under a duty to inform the core group, who will then meet to discuss and agree upon the best way in which the issue can be managed in order to minimise its effect. Of course, effective communication is not only useful for managing risk and avoiding potential problems, but can also be useful in motivating the team members. Project partnering recognises this and therefore provides mechanisms by which the parties can benefit from performance incentives. These are shared between the parties, encouraging collaborative working, with the parties actively seeking best value. There are several forms of contract which allow for project partnering, such as NEC3, but the only contract form which really embraces the ethos of partnering is PPC International. This is currently being used on several major contracts in Dubai and a UK version, PPC2000, has been used on over 20 billion worth of projects. The results are quite stunning with none of these projects resulting in adjudication or arbitration. So although it will take a real commitment from the construction industry to change its mindset with regard to the way projects are procured and managed, the potential benefits outlined above justify the time and effort involved in taking that
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commitment. With greater client influence, greater contractor input, better results for consultants, projects completed on time and to a higher standard, fewer disputes and the potential to establish mutually beneficial long term relationships, it must be worth a try? Nigel Truscott Partner Trowers & Hamlins ntruscott@trowers.com +971 4 351 9201
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Chapter Five
Specialist Services
Specification Consulting Design Management Strategy, Value and Risk
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Specification Consulting
Specification consulting is often seen by the architect as an onerous duty, rather than as a vital link in communications between designer, owner, and contractor. Specifications are key contract documents, at times deemed contractually more important than the drawn information. The Davis Langdon specifications team recognises the need to prepare appropriate specifications, protecting design intent and reflecting the contractual conditions. We have offices in countries around the world and have produced and co-ordinated specifications on signature projects worldwide since 1986, in: Africa Australia Central Asia Europe Far East Middle East United Kingdom United States of America
The team forms an integral part of a client/developer or design team, producing specifications that are geared to todays global construction market, embracing materials and systems to produce quality buildings which reflect best value whilst meeting the design aspirations and intent. We produce project specifications for use in any area of the world, tailored to internationally recognised formats (e.g. CAWS/ CSI), complying with all international and local standards and regulations. Where required, we are able to facilitate a suite of project specification documents incorporating all design consultant disciplines including architectural, structural and MEP. Under the ever increasing umbrella of sustainability and environmental awareness, the specifications include criteria for the control and use of sustainable and environmentally acceptable products, materials and processes. We work with and embrace guidance and requirements such as those issued under LEED and BREEAM to achieve green specifications.
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Specifications define scope, quality and responsibility and therefore need to be sufficiently flexible to reflect the various forms of procurement and contracts used across the world. They will provide a mechanism for managing design risk and exposure by acknowledging the design, terms of contract, the procurement route and programme. Specification production starts as early in the design process as possible and is developed continuously, in parallel with the design. We deliver bespoke specifications drawn down from a comprehensive up to date database, providing a platform for delivering fresh project specific information every time. This is achieved using our highly skilled and enthusiastic individuals who have experience in a diverse range of professional disciplines. An early start improves co-ordination with other tender and procurement documents produced by the project manager, cost consultant and other consultants, thus avoiding contradiction. The specification will be the main quality control and compliance checking tool during the construction process, so it is vital that it co-ordinates with the other documentation.
20 Years experience
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By developing specifications throughout the design, the designer is more likely to achieve a clear and unambiguous document. A correctly prepared specification: reflects and supports the design intent reflects the form of contract and procurement route clearly defines scope and quality allows drawings to be clear and concise confirms procedures and responsibilities establishes quality and performance benchmarks provides means for checking compliance reflects programme requirements reflects national and regulatory standards is co-ordinated with other contract documents
The specification document becomes even more important if disputes arise, when the test for a good specification will be whether it contains clear and unambiguous statements that resolve the argument. The specification document for any project should be kept close at hand throughout the construction process.
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Design Management
Design Management is the management of design teams and the design process. The Davis Langdon approach is based on a thorough understanding of the design process, gained from our experiences of working closely with architectural teams. We become a proactive member of the project team and assist to produce deliverables on time, making sure that the design process is managed and the risk to the client is minimised. Davis Langdon is typically appointed by the architect but we view each appointment on a project-by-project basis. Design management can either be part of the overall project management service, or a separate role provided by the design team. Duties likewise can be agreed on a project-by-project basis dependent on factors such as geographical location and size. Davis Langdon has wide experience of helping clients achieve their aims in the Middle East. Services typically commence upon appointment of the design team but can begin earlier with bid preparation and interviews. Services normally cease following issue of tender and contract documentation. Davis Langdon can: Provide personnel experienced in design management and familiar with the problems experienced by design teams. Provide a tailor made management system, backed up by clear procedures and communication routes, taking into account procurement, contract and the clients requirements. Help the design team to be free to perform the design tasks that they are best qualified to do. Provide outside help with a fresh outlook that understands the designers needs. Give reassurance that issues vital to the success of the design are being managed. Typical duties include: Organising the design team so that all team members are aware of project and team expectations. The design managers job is to make sure the participants adhere to the procedures and protocols established.
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Advising the project team on contractual and procurement issues. It is important for key managers to understand each others position and be sympathetic to each others needs. Co-operation is the key to success. Producing co-ordinated design programmes. A concise, relevant and realistic design programme is essential. Simple bar charts showing outline design and scheme design, for example, are often insufficient. Detail such as dependencies and flow of information has to be included, along with key deliverable dates and actions required to achieve the objectives set. Preparing design webs to suitably depict design progress and review progress with the project team. The design web can be used as a single tool or integrated into a design programme to provide an instant and visual snapshot of design progress. Design webs are a powerful visual tool and give the project team an instant picture of current status.
Establishing procedures for exchange of information and identifying design team deliverables to ensure that all parties know what to deliver and by when. Making sure everyone understands the level of information achievable by deliverable dates. Understanding what has not been done is as important as knowing what has been done.
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Ent er
WHY?
pr
e is
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HOW?
WHAT?
Op
Benefits Puts project and team on the right footing from the outset Accurately diagnoses the strengths, weakness, opportunities and threats to the development Identifies focused, project-specific activities to treat shortcomings Imparts clarity, realism and commitment throughout the team Enhances understanding of project imperatives by the whole team Provides a sound basis for ongoing project management The output of a DLivering Success review is a structured action plan, building on strengths and rectifying weaknesses. Following on from the strategic DLivering Success study, a comprehensive value and risk based consultancy service, structured for the specific needs of the development, is developed and implemented. This ensures the success factors and benefits identified and developed during the strategic study can be realised.
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Value Management The main purpose of value management is to maximise the benefits to the client undertaking a project. It also provides a basis for more effective project delivery.
Value Management
A systematic process to define what value means for clients and communicate it clearly to the project delivery team to maximise the project benefits and minimise the resources used
Value Engineering
A systematic technique to deliver the required functionality at lowest cost to give best value for money
Benefits An effective value management process helps people to work well together and delivers the following direct benefits. Early clarification of business needs and what drives value Unambiguous articulation of the project objectives to the delivery team Relating the value drivers to design requirements Reducing waste and unnecessary cost Maximising value for money thus delivering more of the right thing for less Key Steps In the first instance we work with the team to identify what is necessary to achieve a project that meets the stakeholders requirements (function analysis).
HOW?
WHY?
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This diagnosis provides the basis for putting in place actions to maximise value and reduce risk. The foregoing analysis is then linked to the design proposals, allowing the most cost/time effective ways to deliver the solutions to be explored. Central to an effective system is the notion that value management focuses on maximising value as well as minimising cost. Consideration should be given to all aspects of the project: the time required for delivery, health, safety and environmental issues, whole life costs and user requirements, as well as other value drivers. Timing is critical for any value management study. It should be noted that 80% of the value in any project is fixed once the concept has been frozen. Value management is, therefore, most effective in the early stages of a projects life but it is, nevertheless, an important tool throughout the project. A suite of services is available to address the project evolution from concept to end use. The focus of a value management study will vary depending on the stage of the project at which the study is performed. At all stages the emphasis should be on what things do to contribute to the project objectives (the functional approach) rather than what they are (the elemental approach). This is because what things do for a project creates the value. In a major project, there are five key stages when formal value management studies may be undertaken, as detailed below.
Project Stage Issue addressed Inception Stage Feasibility Stage Concept Design Stage Schematic Design Stage Detailed Design Stage To validate the need To define the optimum project To select the best options To maximise cost effectiveness To minimise costs and maximise constructability
There are also further opportunities to add value throughout the supply chain (which control 80% of the costs of construction).
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Risk Management Risk management is concerned with improving client confidence in the delivery of the expected business benefits. The main emphasis of risk management should be on putting in place activities to manage risk. It may also indicate the amounts of time and money that should be allowed as contingencies for things that might go wrong. Benefits A tailored risk management process will deliver the following direct benefits: Raise understanding of what matters on the project Identify the uncertainties and risks Allocate mitigating actions according to agreed strategies Relate quantified risks to risk allowances and contingencies Regularly review progress towards reducing risk and uncertainty thus avoiding destruction of value and minimising uncertainty in delivering what you need
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A risk study would commonly comprise five phases, as follows: 1. Preparation - Gather all relevant background information from the project team in order to fully understand the project and tailor the risk management service to suit the project requirements. 2. Identification - Identify all specific risks which could impact on the project. Describe each risk and its consequences in a risk register. 3. Analysis - Undertake a qualitative/quantitative assessment of each risk identified in the previous phase. Assign a likelihood and impact rating and record it within the risk register; rank risks accordingly in order to prioritise management actions. 4. Management - Specify planned management actions to manage the risks. Nominate action owners for all risks requiring active management. The risk register then forms the active tool by which risks are managed throughout the life of the project. Prepare a risk management report summarising all work undertaken. Advise on a risk management plan for the duration of the project. 5. Review - Undertake periodic review of the risk management plan (incorporating the risk register) to monitor risks and encourage management actions in order to reduce risk rating values. Risk management should be applied throughout the project cycle i.e. from inception through to use. The most effective risk management systems identify and manage risks from the earliest project stages in order to minimise risk exposure.
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Chapter Six
Property Investment
Due Diligence Funders Technical Advisor Insurance Reinstatement Cost Valuation Building Areas Definitions Building Services Standards The Great Opportunity for Sustainability Sustainable Development Outlook for Commercial Property
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Due Diligence
Due diligence prior to a property purchase must be an integrated process that recognises that the component parts (the price of the asset and the holding and recurrent cost of the property) impact upon each other. Each part cannot be treated in isolation: Valuation right price of acquisition future capital expenditure provided for certainty of market and revenue streams demographics
Physical condition, performance and maintenance of building fabric and services regulatory and essential service compliance environmental issues lettable areas title, easements and encroachments town planning Legal lease conditions contracts of sale development agreements agreements to lease
Accordingly, a due diligence audit, to be useful to any prospective owner/investor, must identify all the issues surrounding the inherent physical condition of the property as they relate to and/or impact upon future capital expenditure, valuation, the lease or leases and the commercial legal documentation.
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Usually the technical due diligence report includes a review of all matters affecting and impacting upon building compliance, fabric, faade, structure, finishes and services as well as the environment, together with land, title and photographic surveys. Other items such as assessment of current green performance, tax depreciation schedules, town planning and geological surveys may be included depending on the location of and the type of property; and the ownership strategy.
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Gross Internal Area (GIA) Gross Internal Area is the area of a building measured to the internal face of the perimeter walls at each floor level. Includes: Areas occupied by internal walls and partitions Columns, piers, chimney breasts, stairwells, lift-wells, other internal projections, vertical ducts, and the like Atria with clear height above, measured at base level only Internal open-sided balconies and the like Structural, raked or stepped floors are to be treated as a level floor measured Horizontal floors, with permanent access, below structural, raked or stepped floors Corridors of a permanent essential nature (e.g. fire corridors, smoke lobbies, etc.) Mezzanine areas intended for use with permanent access Lift rooms, plant rooms, fuel stores, tank rooms which are housed in a covered structure of a permanent nature, whether or not above main roof level Service accommodation such as toilets, toilet lobbies, bathrooms, showers, changing rooms, cleaners rooms, and the like Projection rooms Voids over stairwells and lift shafts on upper floors Loading bays Areas with a headroom of less than 1.5m Pavement vaults Garages Conservatories Excludes: Perimeter wall thicknesses and external projections External open-sided balconies, covered ways and fire escapes Canopies Voids over or under structural, raked or stepped floors Greenhouses, garden stores, fuel stores, and the like in residential property
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Gross Floor Area (GFA) Gross Floor Area is the total of all enclosed spaces fulfilling the functional requirements of the building measured to the internal structural face of the enclosing walls. Includes: Areas occupied by partitions, columns, chimney breasts, internal structural or party walls, stairwells, lift-wells, and the like Lift, plant, tank rooms and the like above main roof slab Note: Sloping surfaces such as staircases, galleries, tiered terraces and the like should be measured flat on plan. Excludes: Any spaces fulfilling the functional requirements of the building which are not enclosed spaces (e.g. open ground floors, open covered ways and the like). These should each be shown separately Private balconies and private verandahs which should be shown separately Net Internal Area (NIA) Net Internal Area is the usable are within a building measured to the internal face of the perimeter walls at each floor level. Includes: Atria with clear height above, measured at base level only Entrance halls Notional lift lobbies Kitchens Built-in units, cupboards, and the like occupying usable areas Ramps of lightweight construction to false floors Area occupied by ventilation/heating grilles Area occupied by skirting and perimeter trunking Areas severed by internal non-structural walls, demountable partitions, whether or not permanent, and the like, where the purpose of the division is partition of use, not support, provided the area beyond is not used in common Pavement vaults
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Net Internal Area (NIA) Excludes: Those parts of entrance halls, atria, landings and balconies used in common Toilets, toilet lobbies, bathrooms, cleaners rooms, and the like Lift rooms, plant rooms, tank rooms (other than those of a trade process nature), fuel stores, and the like Stairwells, lift-wells and permanent lift lobbies Corridors and other circulation areas where used in common with other occupiers or of a permanent essential nature (e.g. fire corridors, smoke lobbies, etc.) Areas under the control of service or other external authorities including meter cupboards and statutory service supply points Internal structural walls, walls enclosing excluded areas, columns, piers, chimney breasts, other projections, vertical ducts, and the like The space occupied by permanent and continuous airconditioning, heating or cooling apparatus, and ducting in so far as the space it occupies is rendered substantially unusable Areas with headroom of less than 1.5m Areas rendered substantially unusable by virtue of having a dimension between opposite faces of less than 0.25m Vehicle parking areas (the number and type of spaces noted) Building Footprint Building Footprint is not a term defined by the RICS, but is generally understood to mean the area of the land upon which the building sits (including all basements), measured to the outside face of external walls.
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Subject
Bahrain Specification ()
80 - 85%
70 - 80%
1:12 - 1:14/m
1:10 - 1:14/m
1:7/m
1:7 - 1:12/m
Occupancy Standards - Toilets Single sex 1 person Single sex 1 person Single sex 1 person Single sex 1 person Single sex 1 person (*) male/female ratio based on to 14m using 60/60 to 12m using 70/30 to 12m using 70/30 to 12m using 70/30 to 14m using 60/60 120% population (*) (*) (*) (*) (*) Fan Coil Units, VAV, Fan Coil Units, VAV with Re-Heat, VAV, Displacement, DX, Constant Chilled Ceiling/Beam Volume, plate heat exchangers 220, +/- 20 220, +/- 20
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Fan Coil Units, Fan Coil Units, VAV, Fan Coil Units, VAV, VAV, Displacement, VAV with Re-Heat, Downflow Units Chilled Ceiling/Beam DX, Constant Volume 220, +/- 20
Heating and Air Conditioning Internal Criteria (degree 12 - 16 litres (*) 3 - 10 (*)
220, +/- 20
22.20, +/- 10
centigrade)
12 - 16 litres (*)
10 litres (*)
None stated
12 (*)
Subject
Bahrain Specification ()
UAE Specification
Qatar Specification
Lebanon Specification
Internal Heat Gains Lighting load 15 w/m 45 w/m 25 w/m to 25% area NR 30 - 35 NR 40 - 45 12 - 15 w/m 30 - 45 w/m 800 or 1,600 w/person 25 w/m to 25% area NR 30 - 35 NR 40 12 - 15 w/m 30 - 40 w/m None None None None 15 w/m 12 w/m None 25 w/m, 25% area NR 35 - 38 NR 40 - 45 12 w/m 15 - 25 w/m None
12 w/m
15 w/m
12 - 15 w/m
12 - 15 w/m
12 w/m
12 w/m
25 w/m
None
60 - 215 w/m
None
Acoustics - Offices
NR 35 - 38
NR 35
NR 40 - 45
NR 40
12 w/m
15 w/m
15 - 25 w/m
35 w/m
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Lighting - Office 250 lux 200 lux 150 lux 80% loading with 30 second waiting interval, handling 15% in 5 minutes. Population density 1:14 80% loading with 30 second waiting interval, handling 15% in 5 minutes. Population density 1:14 80% loading with 30 second waiting interval, handling 15% in 5 minutes. Population density 1:14
500 lux
Lighting - Stairs/Circulation
Lighting - WCs
215 lux
Lighting - Plantrooms
215 lux
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80% loading with 30 second waiting interval, handling 15% in 5 minutes. Population density 1:14
80% loading with 35 second waiting interval, handling capacity of 11% to 17% in 5 minutes. Population density 1:12
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If this pioneering initiative is successfully implemented, the UAE will gain significant economic benefits by creating new job markets and by exporting the technologies, ideas and concepts to regional and international partners. Companies who learn from this and make strategic business decisions to showcase and demonstrate sustainable building design can occupy a niche market and make profits. Unless these steps are taken now, the consequences will be profound. According to the 2006 Living Planet Report published by WWF1, the UAE and Kuwait occupy the unenviable positions of having respectively the highest and fifth highest per capita Ecological Footprint on earth. The overwhelming majority of this footprint (UAE 76% and Kuwait 87%) is related to carbon dioxide from fossil fuel use, which is the primary greenhouse gas responsible for man-made climate change. As highlighted by the Stern Review, a business as usual approach to climate change could cost the world up to 20% of its GDP. In this scenario, as a region the Middle East is predicted to face some of the highest losses to its economy. The construction sector will not be immune to these costs. Doing nothing simply cannot be an option. No sector in the world has cracked this yet but by taking the initiative, organisations in the construction sector can show just what sustainability means in practice. Tanzeed Alam, Manager, Climate Change and Sustainability, Emirates Wildlife Society WWF, Abu Dhabi TAlam@ead.ae +971 2 634 7117
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Sustainable Development
The last few years have seen a rapid rise in the interest and significance of sustainability not just as a concept but as a genuine strategy in the built environment. However, despite all the hype the number of people actually trying to make genuine efforts to enhance the sustainability of our buildings is still very small. This is perhaps due to the still limited understanding of the true meaning and objective of sustainability. Most people are aware of the three pillars of sustainability (economic, environmental and social) but few people realise that addressing these at the design stage involves more than including a few green features. The use of green rating tools is one common method of enhancing or proving ones green credentials, but these tools are generally little more than a confirmation of good design practice. Having said this, undertaking an assessment on a project is a good first step, and the creation of the Emirates Green Building Council has been a well received and positive move. Furthermore, during the past 12 months several more Platinum rated buildings have commenced construction in the GCC and will be completed over the next few years. These buildings along with those of a Gold and Silver rating will enhance the sustainable credentials of many major clients. It is vitally important to remember that sustainable design is more than just adding a few renewable energy features to your building (such as PV panels, wind turbines etc). Sustainability is a whole design philosophy which starts at the very conceptual design stage and is then carried on through to the occupation and maintenance of the facility. This article will look at each stage of the facilitys life and considers some of the issues which need to be addressed if a truly sustainable project is to be realised. Not all of these ideas and suggestions are necessarily required in every project but together they serve to enhance the end product. First of all however, it is important to dispel a myth about sustainable design. It does not have to cost more. Whilst it is true to say that some sustainable features increase the capital cost of a building, such features often have long term paybacks far in excess of the initial impact. Some features enhance the value of the building (in terms of marketability, reduced management / maintenance costs) whilst others are simply sensible strategies.
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The life of a building can be broken into four stages; initially there is the design stage, then construction, occupation, and finally demolition. At this point one should consider the design life of a building. If we take a look at the buildings now being built around the Gulf, how long will they really last? In terms of old buildings there are precious few examples currently; the pyramids in Egypt, Petra in Jordan and the odd isolated historic building example within each regional country over 50 years old. So the region has a very young building stock. This poses some major problems most significantly, no one really knows how todays buildings will perform in 50 years time, what will have to be replaced and how often, what is the impact of the harsh climatic conditions and so on. These questions are more and more critical as our buildings become increasingly complex and integrated, because there are many more things which can go wrong. The key issues to be considered when making a sustainable building are as follows. In the design stage: Function Very few designers and clients truly consider how a building will be used by the final occupants and what these occupants really want / need. The challenge therefore is to understand clearly the building usage and plan the design in such a way as to minimse the future modifications and maintenance issues. One of the biggest contributors to environmental impact during the life of a building is the waste generated by churn (the remodelling of the interior of the building). Flexible design therefore stretches into the need to have designated hubs for services connections as well as limited solid (concrete / blockwork) partitions. Demountability and flexibility are the key words and shell and core strategies for rental offices for example are a good first step. Planning Many buildings are planned to maximise initial return or increase the sales value these drivers are not always the best long term solutions. As with function it is important that the project brief is clearly defined at the outset, allowing minimum modification later for future occupiers. The objective is to meet the needs of the market rather than just create saleable area. Studies have shown around the world that potential tenants are prepared to pay more for the ideal office space when compared with spaces which need them to modify their business operations and efficiency.
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Specification Always a difficult issue for clients, because there is a need to balance the initial savings against the long term benefits. Life cycle costing is one of the most reliable tools which can be used to justify the extra capital cost involved in selecting a higher value product at the start. In addition as more buildings are seeking a LEED or similar rating emphasis has to be placed on the methods and controls adopted by contractors on site. Whilst these do have a direct cost impact they also enhance the efficiency of the work reducing defects and accidents. Material Usage The environmental impact of physical material usage is often ignored. As a general rule metals (in particular aluminium) have a high environmental impact and therefore their usage should be limited wherever possible. However, the optimisation of material usage as a whole must be the ultimate goal and this is achieved by allowing designers the time to refine their design before construction commences. In addition the regional sourcing of materials has a major benefit in reducing the carbon and overall environmental footprint of the development. Building Services Design Research in Asia into high rise office buildings has found that in most cases air conditioning installations end up being 25% over designed. This is not necessarily a failing on the part of the designers, but can be a failing in correctly determining the actual characteristics of the building occupants. Close to 40% of a buildings environmental footprint is related to energy consumption and in practice this is controlled only by the occupants and not the designers. The best strategy is therefore to try and limit the interface between the occupiers and the systems (let the Building Management System (BMS) do the work). As technology becomes more integrated into the building it can be used in a positive way to optimise a buildings performance. In the construction stage, the key is not to generate waste / abortive works. Variations Things change for a number of reasons, but in every case the change leads to delays, abortive materials and waste. All of these have an impact on the sustainability of the project. The solution is therefore to ensure that the front end planning and design is completed thoroughly and in adequate time. Changes will always happen, but they should be mitigated. 66 87
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Standardisation In high rise construction the opportunities for standardisation, prefabrication and modular construction always exist and should be explored. In Singapore, for example, standardisation is a key component of the building codes and is therefore a requirement this reduces waste and enhances speed. In Hong Kong 40 storey residential blocks can be constructed using prefabricated facades and slabs with a four day cycle per complete floor. The programme savings alone pay for the slight cost premium involved, which can be eliminated altogether if there are multiple repetitive towers. The use of modular prefabricated building frames and structures have been applied on projects in both Qatar and Jordan over the past 12 months with great success. This therefore offers the potential for clients to expand their usage on other projects in the region, which in turn will lower current construction costs. Skilled Workforce The Middle East currently relies on vast quantities of unskilled labour from around the world which has been acceptable in the past. As buildings get more complex however the workers skill levels have to rise. China is going through exactly the same cycle of realisation with their migrant workers, with the result that more and more international firms are bringing in skilled workers to carry out the complex aspects of the project. The Middle East should learn from this experience and ensure the quality of future buildings by demanding better skilled workers. Defects Historically clients have accepted a building being completed with defects and have then tolerated a team of workers returning for many months patching, correcting and filling the cracks. This is wasteful and expensive. Sufficient time and resources should be made available to do it right first time round. Occupation and Maintenance is a phase in the buildings life almost totally overlooked by designers. Strategies for this stage are more than simply developing a maintenance regime or listing out a million spare parts which are to be provided, it is the concept of understanding what is needed to keep the building looking as good as it was on day one. Asset Value Retention Clients who own assets know the need for them to retain their value. One needs to look around any city in the Gulf and consider which older buildings have retained their status as desirable locations / addresses, then see what they all have in common. 67 88
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Generally the answer is they all are well maintained, flexible, functional, and still look good. The market value of a building can drop as quickly as a second-hand car if it is not looked after properly. Maintenance Regimes Fixing things only when they are broken is the sign of poor long-term management. Preventative maintenance strategies appear more costly from the outside but are in fact more economical and environmentally sustainable. If plant and equipment are kept in optimum working order they are more efficient and hence consume less energy. If materials are replaced at the correct time the impact on other surrounding systems will be less, hence reducing repair bills. Energy Usage Profiling One strategy many owners in developed countries adopt is the post occupancy review. This process examines more than just the satisfaction levels of the occupants, it also critically examines the energy consumption profiles and equipment efficiencies, as well as how the building is really being used. Armed with this information it is possible in future maintenance reviews to make adjustments to the base building to optimise energy usage as well as addressing the aspects of the buildings performance which are below expectations. Asset Benchmarking This is a powerful tool for developers with large portfolios of similar building types. The purpose is to compare how different buildings perform against each other and to then identify strengths and weaknesses with a view to elevating all buildings to the same performance levels. Demolition or end of life is something which, because it is so far in the future, building owners are sceptical as to whether anything meaningful can be planned now. The answer is there are many initial strategies which will aid this stage in a buildings life. Demountability Whilst most buildings will be pulled down and dispatched to the land fill, those buildings which are planned well can be in part reused elsewhere. Modular units can be extracted from a building and re-erected on a future project. This strategy is particularly beneficial where the building is to have a short life expectancy.
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Recycled Materials Metals are a great example of materials which can be recycled. Although currently there are very few companies in the regional markets interested in recycled materials, other parts of the world have active and extensive recycling industries and therefore these can be explored to limit the amount of waste going to local landfill. The region is also seeing the introduction of more materials in the market which have a significant recycled component, which enhances their environmental performance. All of the above strategies are linked directly back to sustainable construction and design, and clearly show that sustainability is a long term philosophy rather than a quick win. In practice none of the above approaches limits the freedom of designers to design award winning buildings or developers to maximise their returns. They all enhance the quality of the built environment and make todays buildings a sustainable asset for future generations.
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Average prime CBD rents have seen an increase of approximately 40% within the last six months, rising to circa $120-140 per square foot per annum. Construction delays, lack of prime office space in the CBD and increased demand have all created upward pressure on rents, and this trend is expected to continue over the foreseeable future. We have seen a good level of take up, including 350,000 square feet at the Al Kazim Towers and up to 200,000 square feet at the Iridium building. Continued economic growth and development in Dubai, coupled with strong population growth and pro-business regulations, will fuel demand for additional Grade A office space from a range of local and international corporations. Dubai office market outlook The majority of the new supply to be delivered in 2009 and 2010 will be along Sheikh Zayed Road corridor, situated within mixed use projects such as Business Bay, Dubai Trade Centre District, Dubai International Financial Centre, and in more dispersed areas such as Jumeirah Lake Towers, Dubai World Central, Dubai Waterfront and Dubai Exhibition City. In the short term, rents are expected to rise and begin to stabilise as the market absorbs new supply from 2010 onwards. We do not envisage a situation of great oversupply thereafter due to: Delayed or cancelled projects arising from increasing construction costs and greater government regulation Quality of space being delivered Latent demand of existing occupiers looking to upgrade from current premises Continued growth of market entrants as companies Middle East focus strengthens
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This situation will result in increased competitiveness for projects that offer an international investment grade product, supporting amenities, sustainable (energy saving) features, large floor plates and convenient access. Matt Hammond, Director Jones Lang LaSalle, Dubai Office matthew.hammond@eu.jll.com +971 4 426 6909
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Chapter Seven
Building Control
Building Regulations and Compliance
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Phase 4: Study of building permit file. 1. Submit the construction file to the Urban Development Department. The Urban Development Department will inspect the property and plans to ensure that they conform to the construction laws and regulations, and then issue its clearance for the issuance of the construction permit. 2. The Municipality calculates the construction permit taxes depending on the area of the building and the region in which this building is located. 3. Pay the building permit taxes to the Municipality. Qatar Compared with many countries the planning and building approval process in Qatar is relatively clear and structured. Land ownership, other than by Qatari nationals and the state, is still extremely limited. The key process in securing development rights is obtaining land title or a pin number; since without such land pin number all other permits and applications cannot be commenced. Once the land is secured the project masterplan is submitted for approval to the Planning Department and local Municipality offices. In parallel, general overviews and strategies for the utilities and primary infrastructure are submitted to the relevant utility companies for comment. During this process each department generally issues a series of reference numbers which are then used as the file number for all future submissions. The culmination of this initial round of submissions is the commonly referred to DC1 approval. As the design develops, a second round of submissions is made to the same utility departments for final approval. In addition submission is made to the Civil Defence department who review the fire and life safety aspects of the project. Depending upon the scale and nature of the project, separate traffic studies may be required and these would be submitted to the Road Affairs Department for approval. The culmination of this stage of submissions is the DC2 approval. The final submission is the Building Permit which follows directly from the DC2 approval. During the whole of this process, it is generally not advisable to revise or modify any submission otherwise the approval process may be delayed.
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In addition, all submissions have to be either in Arabic or bi-lingual and should be endorsed by locally registered and approved design companies. International companies cannot make these submissions by themselves. As a general guide the whole process usually takes at least 80 days, depending upon the quality of the submission. There are some parts of Qatar which are exempt from the Building Permit approval process, but these are generally related to the oil and gas production facilities. Over the past 12 months a number of revisions have been made to the design standards of buildings, in particular high rise structures. These address issues such as fire safety, refuge areas and the use of lifts in the event of fire. In addition, all fit out projects are being brought under the control of the regulatory departments, in particular Civil Defence, and all such work are now required to be submitted for approval prior to commencement. This submission must be made by a registered local consultant and failure to do this can significantly delay the approval and permitting process. Bahrain Procuring the Municipal Building Permit in Bahrain comprises a three stage process: Stage 1 Seeking the Preliminary Building Permit: This is a preliminary overall permission and is generally sought from the Municipality of Bahrain. Simple outline plans, crosssections to indicate overall important heights and an area statement is generally sufficient. The main Authorities involved at this stage are The Municipality, Physical Planning Directorate and Roads Directorate. Stage 2 Informing the various Directorates: This is in writing to the Roads Directorate, Civil Defence & Fire Services Department, Electricity Directorate Department, GPSD (Ministry of Electricity Water), Electricity Department (Damage Protection & Control Unit), SDD, Water Distribution Directorate, Batelco. At this stage the Title Deeds are required. All relevant information and documentation is given to each of the above directorates, until the Final Building Permit is in hand. Stage 3 Obtaining the Final Municipal Building Permit: Third and last stage in the process of seeking the Permit is the procurement of the Final Municipal Building Permit. Again this process is done in specific sequence of each of the Directorates in turn this sequence must be followed. All documents and drawings and Municipality forms to be filled in and submitted together with appropriate fees for certain Directorates.
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The Municipality also charges for the following:1. Site Sign Board 2. Insurance for Site Sign Board 3. Insurance for Construction Contract (Refundable) 4. Fee for Occupying Road. If the Environmental Affairs Department are involved in the process, they too have a reviewing fee. UAE The following is a general outline of the procedure, but there are many further obligations and procedures to be completed within each of the stages. For example, the Building Permit Application Stage 4 requires no less than 15 different forms, documents and separate approvals to be submitted as part of the application. It is the responsibility of the construction contractor to obtain the Building Permit. All applications must be signed by locally registered consultants. Stage 1 Preliminary Application (employer pays deposit to DM) Stage 2 N.O.C.s (No Objection Certificates) from various departments of Dubai Municipality: Drainage, Communications (Etisalat), Water and Electricity (DEWA) Stage 3 Obtaining Survey Datum Level/Gate Levels and Approval from the Roads Department (may require traffic impact study) Note: Preliminary Approval, N.O.C.s and Survey Levels can be obtained simultaneously. Stage 4 Building Permit Application (employers deposit is refunded; contractor takes over responsibility and pays new deposit) Stage 5 Contractor collects Building Permit and applies for demarcation certificate Stage 6 Application for Revision to Building Permit (if relevant) Upon completion of building works, it is the responsibility of the construction contractor to obtain the Occupancy Permit, and this is achieved by having the Building Permit signed off, effectively closing it out. In order to obtain this closure, it is necessary for the contractor to obtain certificates/signatures from various government and quasi-government departments (as applicable), including civil defence, food and hygiene, C.I.D. etc., prior to re-presenting to DM for final approval. After approval is gained, an application can be made to DEWA for utilities connections.
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Chapter Eight
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Capacity/Volume 1 cu cm (cm3) 1 cu decimetre (dm3) = 1000 cm3 1 cu metre (m3) = 1000 dm3 1 litre (litre) = 1 dm3 1 hectolitre (hl) = 100 litre Mass (Weight) 1 milligram (mg) 1 gram (g) = 1000 mg 1 kilogram (kg) = 1000 g 1 tonne (t) = 1000 kg
USA Measures and Equivalents USA Dry Measure Equivalents 1 pint = 0.9689 UK pint USA Liquid Measure Equivalents 1 fluid ounce = 1.0408 UK fl oz 1 pint (16 fl oz) = 0.8327 UK pt 1 gallon = 0.8327 UK gal = 0.5506 litre
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Chapter Nine
Directory of Offices
Middle East Regional Offices International Offices
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Bahrain Davis Langdon Al Saffar House Unit 22B, Building No 1042 Block 436, Road 3621 Seef District PO Box 640 Manama Kingdom of Bahrain T: +973 1 758 8796 | F: +973 1 758 1288 E: stephen.gee@davislangdon.com E: spencer.wylie@davislangdon.com General: bahrainoffice@davislangdon.com Contact: Stephen Gee / Spencer Wylie Qatar Davis Langdon Salwa Commercial Complex Building 1st Floor Behind Al Seal Building Salwa Road PO Box 3206 Doha State of Qatar T: +974 458 0150 / 458 0152 | F: +974 469 7905 E: steven.humphrey@davislangdon.com E: stuart.feeney@davislangdon.com E: james.hamilton@davislangdon.com General: dohaoffice@davislangdon.com Contact: Steven Humphrey / Stuart Feeney / James Hamilton Lebanon Davis Langdon Ist Floor, Chatilla Building Australia Street Rawche, Shouran PO Box 13-5422 Beirut Lebanon T: +961 1 780 111 | F: +961 1 809 045 E: dll.mi@cyberia.net.lb Contact: Muhyiddin Itani
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Indonesia Davis Langdon & Seah Indonesia Level 18, Ratu Plaza Office Tower Jalan Jeneral Sudirman 9, Jakarta 10270, Indonesia T: +62 21 739 7550 | F: +62 21 739 7846 E: dlsjkt@dls.co.id Contact: Peter Robinson / Jim Pollock Also at: Bali, Surabaya Japan Sato Facilities Consultants, Inc. Toranomon Kiyoshi Bldg. 4-3-10 Toranomon Minato-ku, Tokyo T: +81 3 5402 6080 | F: +81 3 5402 1200 E: sato@sfc-net.co.jp Contact: Takayoshi Sato Also at: Nagoya Aichi Korea Davis Langdon & Seah Korea Co Ltd 429 G-Five Central Plaza 1685-8 Seocho 4-dong Seocho-gu, Seoul, Korea 137-882 T: +82 2 543 3888 | F: +82 2 543 3898 E: dlskorea@dls.com.sg Contact: Max Lee Moon-Su / Goh Chok Sin Malaysia Davis Langdon & Seah (Malaysia) Sdn Bhd 2 Jalan PJU 5/15 Kota Damansara 47810 Petaling Jaya Selangor Darul Ehsan, Malaysia T: +60 3 6156 9000 | F: +60 3 6157 5662 E: info@dlsjubm.com.my Contact: Loo Ming Chee / Ong See Lian / Karim Ali / Justin Teoh / Mahamad Faiz Awang Also at: Johor Bahru, Kota Kinabalu, Penang
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Philippines Davis Langdon & Seah Philippines Inc 4th Floor, Kings Court Building 2129 Pasong Tamo, Makati City Manila, Philippines T: +63 2 811 2971 | F: +63 2 811 2071 E: manila@dls.com.ph Contact: Alan Hearn Singapore Davis Langdon & Seah 1 Magazine Road 05-01 central Mall 059567 Singapore T: +65 6222 3888 | F: +65 6224 7089 E: dlssp3@dls.com.sg Contact: Seah Choo Meng Thailand Davis Langdon & Seah & LECE (Thailand) Co. Ltd 10th Floor, Kian Gwan 2 Building 140/1 Wireless Road Lumpinee, Patumwan Bangkok 10330, Thailand T: +66 2 253 7390 | F: +66 2 253 4977 E: general@dls.co.th Contact: leong Choong Peng Vietnam Davis Langdon & Seah Hanoi Branch Office 706 7th Floor North Star Building 4 Da Tuong Street Hoan Kiem District, Hanoi, Vietnam T: +844 942 7525 | F: +844 942 7526 E: dlsvietnam@hcm.vnn.vn Contact: Seah Choo Meng Also at: Ho Chi Minh City
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Africa
South Africa Davis Langdon Ground Floor, MPF House 32 Princess of Wales Terrace Sunnyside Office Park Parktown 2193, South Africa T: +27 11 484 2330 | F: +27 11 484 2361 E: corp@davislangdon.co.za Contact: Johan Kemp Also at: Bloemfontein, Cape Town, Durban, George, Klerksdorp, Pietermaritzburg, Port Shepstone, Pretoria, Richards Bay, Somerset West, Stellenbosch, Vaderbilpark and Botswana
Australasia
Australia Davis Langdon Level 20, 350 Queen Street Melbourne Victoria 3000 Australia T: +61 3 9933 8800 | F: +61 3 9933 8801 E: mbeattie@davislangdon.com.au Contact: Mark Beattie Also at: Adelaide, Brisbane, Cairns, Canberra, Darwin, Hobart, Perth, Sunshine Coast, Sydney and Townsville New Zealand Davis Langdon Level 10, Citigroup Centre 23 Customs street East PO Box 935 Auckland New Zealand T: +64 9 379 9903 | F: +64 9 309 9814 E: auck@davislangdon.co.nz Contact: Chris Sutherland Also at: Wellington 105 100
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Europe
United Kingdom Davis Langdon LLP Davis Langdon Crosher & James Davis Langdon Mott Green Wall Davis Langdon Schumann Smith MidCity Place 71 High Holborn London WC1V 6QS T: +44 20 7061 7000 | F: +44 20 7061 7061 E: rob.smith@davislangdon.com Contact: Rob Smith Also at: Aberdeen, Birmingham, Bristol, Cambridge, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Maidstone, Manchester, Milton Keynes, Norwich, Oxford, Peterborough, Plymouth, Southampton and Stevenage Ireland Davis Langdon PKS 24 Lower Hatch Street Dublin 2, Ireland T: +353 1 676 3671 | F: +353 1 676 3672 E: dlpks@dlpks.ie Contact: Norman Craig Also at: Cork, Galway and Limerick Russia Ruperti Project Services International 8th March Street, Bld 6A. Block 1 Moscow 127083, Russia T: +7 495 983 0850 | F: +7 495 933 7851 E: anthony.ruperti@davislangdon.com Contact: Anthony Ruperti Spain Davis Langdon Edetco C/Muntaner, 479, 1-2 Barcelona 08021, Spain T: +34 93 418 6899 | F: +34 93 211 0003 E: fmonells@edetco.com Contact: Francesc Monells Also at: Girona 101 106
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