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Valuation Tool - C2C Investment Appraisal T“Can C2C on business sites add value to your business, environment and society?”This tool has been developed by the Architecture and Built Environment School of the University of Wolverhampton and other EU partner institutions with funding from INTERREG IVB North-West Europe. The C2C Investment Appraisal Tool provides a simple framework that allows the user to broadly assess the added value of integrating Cradle to Cradle (C2C) on C2C inspired buildings and business sites. Cradle to Cradle here is an innovative design and development philosophy that targets not just minimization of negative ecological footprints, but creation of a positive ecological footprint through smart and intelligent designs. Its core principles are: i) waste is food; ii) use current solar income; and iii) integrate diversity.

The C2C Investment Appraisal Tool forms part of a toolkit that seeks to address: i) availability and infusion of funds; ii) financial feasibility and viability of C2C in business sites; and iii) proper allocation of available funds.

The toolkit comprises:

● A User Guide that provides details of what the toolkit is for and the methodology underpinning it. It also outlines some of the critical issues and evidence bases that have informed the development of this tool. Case studies are included to illustrate the practical application of the toolkit. The user guide also discusses the strengths and limitations of the Toolkit and highlights areas where further research or development work is needed.

● A C2C Investment Appraisal Tool, consisting of a set of individual spreadsheet-based tools to assess the value of C2C buildings or sites for a range of potential stakeholders.

● A C2C Value Indexing Tool designed to collate empirical data from users of C2C inspired buildings or sites as the stock of such buildings and sites grows. The tool is based on pairwise comparison analytical technique. It enables key C2C elements of the site and buildings to be compared in pairs with the view to judging which is regarded more important or most valuable to the user. It thus works out and then ranks the relative importance of each building or site element and then on the basis of that determines the value.

Using the C2C Investment Appraisal Tool:

● Specify the characteristics of the site and nature of the transactions undertaken on the 'Attributes of site' worksheet.

● The 'Data sheet' is then used to collect parameters required to calculate cost and benefits that derive from integration of C2C defined elements

● Adjust parameters on the remaining (Investment Appraisal) sheets which summarise the added value and business case for a range of stakeholders and evaluate results. These sheets set out the NPV, IRR, and Profitability Index resulting from the combination of defined elements integrated into the building or site. Undertake sensitivity checks.

● It should be noted that in some cases, the added value cannot yet be monetised (further research required) and therefore needs to be articulated in qualitative terms.

For further information on C2C in Business Parks, visit http://www.c2cbizz.com or contact Dr Nii A. Ankrah at [email protected]

No Warranty:We make no representations or warranties of any kind whatsoever (express or implied) regarding the content of this document, or its suitability or fitness for any purpose.

Exclusion of Liability:You agree that we will not be responsible for any loss, damage, costs or expense you or anyone else incurs in reliance on or use of any information contained in this document.

Valuation Tool - C2C Investment Appraisal TCan C2C on business sites add value to your business, environment

and society?”This tool has been developed by the Architecture and Built Environment School of the University of Wolverhampton and other EU partner institutions with funding from INTERREG IVB North-West Europe. The C2C Investment Appraisal Tool provides a simple framework that allows the user to broadly assess the added value of integrating Cradle to Cradle (C2C) on C2C inspired buildings and business sites. Cradle to Cradle here is an innovative design and development philosophy that targets not just minimization of negative ecological footprints, but creation of a positive ecological footprint through smart and intelligent designs. Its core principles are: i) waste is food; ii) use current solar income; and iii) integrate diversity.

The C2C Investment Appraisal Tool forms part of a toolkit that seeks to address: i) availability and infusion of funds; ii) financial feasibility and viability of C2C in business sites; and iii) proper allocation of available funds.

The toolkit comprises:

● A User Guide that provides details of what the toolkit is for and the methodology underpinning it. It also outlines some of the critical issues and evidence bases that have informed the development of this tool. Case studies are included to illustrate the practical application of the toolkit. The user guide also discusses the strengths and limitations of the Toolkit and highlights areas where further research or development work is needed.

● A C2C Investment Appraisal Tool, consisting of a set of individual spreadsheet-based tools to assess the value of C2C buildings or sites for a range of potential stakeholders.

● A C2C Value Indexing Tool designed to collate empirical data from users of C2C inspired buildings or sites as the stock of such buildings and sites grows. The tool is based on pairwise comparison analytical technique. It enables key C2C elements of the site and buildings to be compared in pairs with the view to judging which is regarded more important or most valuable to the user. It thus works out and then ranks the relative importance of each building or site element and then on the basis of that determines the value.

Light grey cells indicate user input is requiredGrey cells are for calculation purposes and should not be altered

Using the C2C Investment Appraisal Tool:

● Specify the characteristics of the site and nature of the transactions undertaken on the 'Attributes of site' worksheet.

● The 'Data sheet' is then used to collect parameters required to calculate cost and benefits that derive from integration of C2C defined elements

● Adjust parameters on the remaining (Investment Appraisal) sheets which summarise the added value and business case for a range of stakeholders and evaluate results. These sheets set out the NPV, IRR, and Profitability Index resulting from the combination of defined elements integrated into the building or site. Undertake sensitivity checks.

● It should be noted that in some cases, the added value cannot yet be monetised (further research required) and therefore needs to be articulated in qualitative terms.

For further information on C2C in Business Parks, visit http://www.c2cbizz.com or contact Dr Nii A. Ankrah at [email protected]

No Warranty:We make no representations or warranties of any kind whatsoever (express or implied) regarding the content of this document, or its suitability or fitness for any purpose.

Exclusion of Liability:You agree that we will not be responsible for any loss, damage, costs or expense you or anyone else incurs in reliance on or use of any information contained in this document.

ATTRIBUTES OF SITE

Kindly provide details of the development as requested below

Land area (Ha):

Location of the property:

Building footprint area (m2):

Gross internal area (m2):

Property type & user:

Type of tenure:

Length of tenure if leasehold (years):

Type of transaction:

Sale price (€):

Rent/sqm p.a. (€):

Transaction date:

Time to let/sell (years):

Occupancy rate (%):

Rent-free period (years):

Rent review period (years):

Sale price of comparable non-C2C developments (€):

Rent/sqm p.a. of comparable non-C2C developments (€):

Time to let/sell comparable non-C2C developments (months):

Occupancy rate of comparable non-C2C developments (%):

Kindly provide details of the development as requested below

1

1000

6000

Choose from list

Choose from list

10

Choose from list

€ 10,000,000.00

€ 200.00

0.00

90%

0.00

3

€ 9,500,000.00

€ 150.00

DATA SHEET Light grey cells indicate user input is required

Grey cells are for calculation purposes and should not be altered

Item Data Unit

Exchange Rate € 1.22 £ 1.00

Investment term 10 years

Inflation rate 1.5%

Cap rate 8%

Discount rate 3.5%

Retail Price Index (RPI) 2%

Cost of capital 6%

4800 m2

Roof area 1000 m2

Average weekly hours 34 hrs

Average yearly hours 1768 hrs

Average weekly salaries £ 614.00 £/week

Average weekly salaries € 749.08

Average hourly salaries £ 13.13 £/hour

Average hourly salaries € 16.02 €/hour

Number of employees occupying facility 432 nr

Design life of property 60 years

€/year

OR

€ 14,560,653.31 €/year

Operational (usable) floor area in the property (80% GIA)

€/week

Total annual salary of workforce in the property (most current financial year on company account)

Total annual salary of workforce in the property based on annual average earnings in the UK (€)

Employee turnover rate (%) 20%

GP consultation cost per minute (€) € 3.75

12.00 minutes

Average prescription costs/ year (€) € 461,880,630.59

52,000,000 nr

€ 53.88 €/visit

Analysis of Working Days

Days in the year 365 days

Weekend days 104 days

Country specific public holidays 8 days

Annual holidays 20 days

Total number of working days 233 days

Medical cost for minor work-related ailments

Average length of time per consultation (minutes)

Average number of prescriptions per annum

Total cost per visit for minor ailments (incldg. Prescription)

Light grey cells indicate user input is required

Grey cells are for calculation purposes and should not be altered

Data Source

Assumed wages rising at rate of inflation

Based on Green Book. Amend as necessary.

UK HM Treasury

Based on Planning Parameters in Spon's Architects' & Builders' Price Book

Based on footprint area

http://www.ons.gov.uk/ons/search/index.html?newquery=hours+worked. Amend as necessary

Based on UK. ONS data.

Based on UK. ONS data.

Assuming 10m2 for one workstation

Based on UK ONS data.

CIPD Annual Survey Report: Recruitment Retention and Turnover 2007

http://www.pagb.co.uk/information/PDFs/AndyTismanarticle.pdf




http://www.prnewswire.co.uk/news-releases/wide-variations-in-eu-holiday-entitlements---uk-amongst-lowest-154599925.html


C2C PRINCIPLE Present on site

Yes

C2C Defined Element

Everything is a nutrient

Leasing agreements are incorporated whereby suppliers of components and other service providers take back their products at end of their service life.

Choose from list

No


Clean material separability

Health enriching materials

No

Yes


Environment enriching materials

There are facilities such as bio-digesters that treat and recycle waste water on-site.

Choose from list


Water Protection Elements

No

Yes


Infrastructure to facilitate raw material exchanges amongst businesses, joint use of transport, utility and technical/business advisory services.

Use current solar income

Features are integrated into the development to generate renewable energy e.g. wind turbines, geothermal and solar.

Yes


Smart utility sub-meters and building management systems are installed to monitor energy usage, on-site generation and any feed-in surplus.

No

Integrate diversity

Yes


Natural lighting is integrated with innovative artificial lighting using sensors that detect changes in natural lighting conditions.

The development integrates indoor plants, vegetative walls, algae tanks, bio-coated surfaces and furnishings to metabolize air pollutants.

Integrate diversity

Yes

Yes

The development integrates indoor plants, vegetative walls, algae tanks, bio-coated surfaces and furnishings to metabolize air pollutants.

Indoor and outdoor features are integrated into development to create habitat for plant, animal or insect species.

Integrate diversity

NoArchitectural Design Diversity

Integrate diversity

NoLand Use Design Diversity

C2C COSTDetails of Feature Parameter Sourced data

Light Leasing

Contract period 10

€ 0.01

Lighting level (lux) 500

Cost/sqm/month € 2.50

6%

Annual payments (uniform series)

PV

Less

Conventional system

€ 64.96

Total € 389,760.00

Annualised cost

C2C premium

Total

Cost/sqm/lux/month1,2

WACC (supplier)1

Installation (cost/m2)3

Data Sources + Assumptions

1. Philips presentation - http://www.dakofa.dk/NogH/Dokumenter/Phillips%20Lighting%20Leasing%20System.pdf

2. Including energy consumption

3. Spon's A&B Price Book

4. Assume 2080 hours p.a., 10Watt/sqm, 10.25 ct/ KWh (Based on 1.)

5. Kat G. H. (2003) Green Building Costs and Financial Benefits, Massachusetts Technology Collaborative. (Productivity gains of up to 7.1% from better lighting control. Conservative figure of 1% used here)

6. Hughes, Ancell, Hirst and Gruneberg (no date) EXPOSING THE MYTH OF THE 1:5:200 RATIO RELATING INITIAL COST, MAINTENANCE AND STAFFING COSTS OF OFFICE BUILDINGS

Total


Total


Total


Helophyte filter5

Number of users 432

Waste water/user/day (ltrs) 20

Amount of waste water available (ltrs/day) 8640

57.6

Space required (m2) 288

€ 457.14

Capital cost

Space required m2/IE1

Amount of waste water pollution (IE)1

Cost/IE21

Operating costs/year

Energy consumption

cost/IE € 1.00

Personnel costs

hrs/week 0.5

days/year 233

cost/hour € 16.02

Maintenance (% of investment) 0.5%

Total operating cost/year

€/year

Total


1. RE: Resident’s equivalent or a measure of wastewater pollution 1 IE is consistent with a theoretical volume of 150 litres per day and a daily load of 90 g Suspended Matter (SM), 135 g Chemical Oxygen Demand (COD), 60g Biological Oxygen Demand (BOD), 10 g nitrogen (N) and 2 g phosphorus (P)

2. Installation included

3. http://www.bloomberg.com/news/2013-08-07/german-water-charges-second-highest-in-europe-handelsblatt-says.html

4. Assume 90% of waste water recovered

5. https://www.realestate.bnpparibas.com/upload/docs/application/pdf/2012-03/eom_2012_web.pdf

6. http://poliswaterproject.org/sites/default/files/maas_ghg_.pdf

7. http://www.carbontrust.com/media/18223/ctl153_conversion_factors.pdf

8, Waldbaum, H. (2008) Green roofs for urban agriculture, unpublished MSc thesis, University of East London (Some cities offer up to 80% reduced sewage rates)

http://www.emis.vito.be/node/22504

http://www.emis.vito.be/node/22504

Total


Total


PV

Area available (m2) 400

8

Site potential (KW) 50

KWh/year for 1 KWp 850

Correction factor for sub-optimal performance 95%

Power generated KWh/year 40375

£ 3,500.00

Approximate area per kW (m2)1

Installation cost/KW1

Installation cost/KW

Installation cost

Maintenance 0.20%

Maintenance cost/year

Maintenance cost/year

Total


1.http://www.energysavingtrust.org.uk/content/download/2278/57162/version/7/file/Solar_Guide_P1.pdf&sa=U&ei=r1B1U4uDBIOAOPrpgYAG&ved=0CEsQFjAI&usg=AFQjCNFrfpx0QkhpgzMk4p6BS5MlWc-S7w

2. http://www.directsolar.co.uk/4kw-solar-system/

3. http://www.energysavingtrust.org.uk/Energy-Saving-Trust/Our-calculations (assume gas)

Smart metersTotal

Maintenance 1%

Total

Smart meter1

Ancillary equipment (Communication - GPRS/3G)1


1. Ecopark presentation (VAT included)

2. Data from elctricity records

4. Assumed as 10.25 cts/KWh

Daylight integration

Total


€ 450.00

Length required (m) (assumed) 236.64

Cost

3. http://www.joneslanglasalle.com/GSP/en-gb/Pages/Global-Property-Sustainability-Perspective-Sustainable-Buildings.aspx gives range of 2-3% for reduction in energy consumption due to behaviour change

C2C Certified Cradlevent textile ventilation vent

Average cost of CradleVent textile ventilation duct per metre incld. Installation6 (€)

€ 2,500.00

Cost

less conventional system?

Total


1. Dapaah et al. (2010) Indoor Air Quality and Office Property Value, JOSRE, 2 (1), 91-115.

2. Kat G. H. (2003) Green Building Costs and Financial Benefits, Massachusetts Technology Collaborative.

3. Assuming 1% less employee turnover due to IAQ improvements

4. ONS

5. Fitz-enz J. (2009) ROI of Human Capital

Green roofs

Roof area (m2) 1000

180.00

Installation cost

Installation cost

C2C Certified Cradlevent textile ventilation vent

Laundry costs of cleaning textile ductwork (€) (average cost/yr)

Cost of air cleansing plant (€)

Rate (including maintenance)6 £/m2

Total


1. Well insulated - H.F. Castletona, V. Stovin, S.B.M. Beck, J.B. Davison (2010) Green roofs; building energy savings and the potential for retrofit, Energy and Buildings, 42.

2.http://www.cstc.be/homepage/download.cfm?dtype=research&doc=H8_De_Cuyper_Standardized_method_for_measuring_the_attenuating_effect_of_green_roofs_on_storm_water_discharge.pdf&lang=en

3.http://www.royalgreenwich.gov.uk/info/510/allotments/833/allotment_fees

4. Waldbaum (2008) [€8 - 25/m2]

5. Based on STW framework (http://www.stwater.co.uk/upload/pdf/Scheme_of_charges_web.pdf)

Total


Total


TOTAL

C2C COSTCapex Opex

€ 180,000.00

€ 1,324,815.67

€ 46,865.28

€ 133,134.72

€ - € 133,134.72








€ - € -


€ - € -


€ - € -


€ 26,331.43

€ 57.60

€ 373.23

€ 131.66

€ 562.49

€ 562.49

€ 26,331.43 € 562.49










€ - € -


€ - € -


€ 4,270.00

€ 213,500.00

€ 427.00

€ 427.00

€ 213,500.00 € 427.00





€ 8,475.05

€ 1,440.00

€ 9,915.05

€ 9,915.05 € 99.15

€ 9,915.05 € 99.15





€ - € -


assumed

€ 106,489.44


assumed

€ 2,500.00

€ 106,489.44 € 2,500.00





4. ONS


€ 219,600.00

€ 219,600.00 € -





4. Waldbaum (2008) [€8 - 25/m2]


€ - € -


€ - € -


€ 575,835.92 € 136,723.37

VALUE ADDEDCriteria Type of value

Hard

Maintenance/sqm/anum

Maintenance/year

Insurance savings Hard

Reduced capital cost of development

Allowance for inflation

Savings on insurance/year

Savings in energy costs Hard

Energy/year

hard

Productivity gains (hrs/year)

Productivity gain (€/year)

Total

Savings generated from leasing equipment and systems

Installation (cost/m2)3

Maintenance6

Energy/m2/anum4

Productivity improvement from optimised lighting

Productivity gains5

Q9

Nii A. Ankrah: 20 year life assumed








Total


Total


Total


Savings in water costs hard

Number of days development in use

Annual savings

Annual savings /m2

Water saved (ltrs/day)4

Rate /m33

Total










Total


Total


hard

Generation tariff (€/kWh)

Income/year

Income/year

hard

Export tariff

Improved access to subsidies & grants for innovation

Generation tariff (£/kWh)2

Selling excess C2C-defined renewable energy to grid

Export tariff

Income/year

Income/year


Reduction in consumption

Tarrif (£)

Tarrif (€)

Energy bill savings/year

Energy bill savings/year

Total






Energy reduction (KWh)

Annual saving

Total

% exported2

Annual energy consumption (GWh)2

Behaviour change3

Tarrif4





Total


hard

Proportion linked to IAQ in work environment


Absenteeism improvements due to improved indoor air quality (IAQ) Total number of absenteeism days per employee

linked to poor IAQ4

Annual savings

Total

hard

Annual benefit

Total

hard

Staff retention/attraction benefits from IAQ

Total





4. ONS


hard

Annual savings (KWh)

Annual savings

Savings/year

Productivity improvements due to improved indoor air quality (IAQ)

Productivity benefits2 (%)

Staff retention/attraction improvements

Staff retention/attraction improvement3

Estimation of total cost of turnover (termination, replacement and learning curve productivity losses)5 (€)

Savings in energy costs (cooling effect)

Energy savings1

hard

Proportion of site covered (assumed)

Chargeable area m2 (A)

Select appropriate band for A (C )

Select appropriate band for B (D )

savings/yr (C - D)

Savings/year





4. Waldbaum (2008) [€8 - 25/m2]


Discounts from reduced stress on public drainage systems5

less excluded cultivated area (green roof) (B)

Total


Total


TOTAL

VALUE ADDEDSourced data Productivity benefits

Capital savings

€ 64.96

40%

€ 1.30

€ 7,795.20

Capital savings

€ 389,760.00

3%

€ 14,502.97

€ 14,502.97

Capital savings

€ 2.13

€ 12,792.00

1%

7637.76

€ 122,346.22

€ 35,090.17 € 122,346.22

Occupational Cost Savings

R17

Dr Nii A. Ankrah: Used SF factor at 3% over 20 yr life








€ - € -


€ - € -


€ - € -


Capital savings

7776

€ 5.34

220

€ 9,135.24

€ 9,135.24

€ 9,135.24 € -










€ - € -


€ - € -


Revenue

£ 0.17

€ 0.21

€ 8,373.78

€ 8,373.78

Revenue

£ 0.05

€ 0.06

50%

€ 1,142.77

€ 1,142.77

Capital savings

20187.5

£ 0.04

€ 0.05

€ 1,036.87

€ 1,036.87

€ 10,553.42 € -





6.32727272727273

2%

126545.454545455

€ 0.10

€ 12,970.91

€ 12,970.91 € -





€ - € -


Capital savings

0.235579188261426

20%

€ 2,944.37

€ 2,944.37

Capital savings

1%

€ 145,606.53

€ 145,606.53

1%

€ 1,456,065.33

€ 14,560.65

€ 14,560.65

€ - € 163,111.55





4. ONS


Capital savings

2%

126545.45

€ 12,970.91

€ 12,970.91

Capital savings

40%

4000.00

3000.00

4000 - 7499

2000 - 3999

€ 1,831.04

€ 1,831.04

Total € 14,801.95 € -





4. Waldbaum (2008) [€8 - 25/m2]


€ - € -


€ - € -


€ 82,551.69 € 285,457.78

VALUE ADDED

€ -

Other revenues and savings








€ -


€ -


€ -


€ -










€ -


€ -


€ -





€ -





€ -


€ -





4. ONS


€ -





4. Waldbaum (2008) [€8 - 25/m2]


€ -


€ -


€ -

INVESTMENT APPRAISALMarket conditions: Market is not yet responsive to C2C

Tenant behaviour: Potential tenants unlikely to want to pay more than they would to occupy conventional premises (i.e tenants have fixed b

Implications: Tenant will only bid more if operational costs can be shown to be reduced

Developer will achieve increased rent only based on operational cost savings

Business case will rest entirely on operational cost savings achieved by C2C integration

Non-C2C

Tota

l Cos

t of O

ccup

atio

n

βΔO

ΔB

Business case:Added value from C2C integration

Cost of integrating C2C features

O1

R1

VC2C - CC2C

VC2C =

CC2C =

C4

Dr Nii A. Ankrah: Choose from dropdown list scenario that best describes market

D29

Nii A. Ankrah: Or ROI (%) = [(V - C)/C] x 100%

Savings in Operating costs (ΔO) € 52,791.69

100%

Yield 8%

€ 285,457.78

0%

Increase in budget (ΔB) = μ x ΔP € -

Increase in rent (ΔR) = β x ΔO € 52,791.69

ΔR x (1/yield) € 659,896.15

Time to let (years) 0.0

Rent-free period 0.0

Rent review (year) 3

Rent adjustment factor 3%

Innovation risk factor (r) 0%

€ 575,835.92

€ 136,723.37

€ 575,835.92

Cost of capital (C) € 455,398.51

€ 2,168,308.70

Business case:-€ 1,508,412.55

Return on Investment (ROI) -70%

DCF Calculations Year

0 1 2

Expenditure

VC2C Calculations

Proportion of Opex savings reflected in effective rent (β)

Productivity benefits, new revenues, brand value, etc. (ΔP)Proportion of ΔP reflected in budget increase where market is responsive (μ)

VC2C =

CC2C CalculationsCapex (ΔC1)

Annual/maintenance cost for year 1 (ΔC2)

CC2C =

CC2C = ΔC1 + Σ(₁,n;i)ΔC2 + C

VC2C - CC2C

VC2C - CC2C

D34

Dr Nii A. Ankrah: Savings/m2 x floor area

D35

Dr Nii A. Ankrah: To be set to 100% if gross lease applicable. Otherwise if net lease, may vary according to tenants preparedness to bid higher on account of the savings they stand to make.

D36

Dr Nii A. Ankrah: Adjusted to reflect covenant strength. The better the covenant strength the lower the yield.

D38

Dr Nii A. Ankrah: Should be set to 0% where market is not yet responsive to C2C

D45

Dr Nii A. Ankrah: RPI + 1.5%

D46

Dr Nii A. Ankrah: Adjusted to reflect tenants' lack of experience of these types of buildings and concern that unforeseen problems could arise. Such concerns if they exist could lead to tenants actually deciding to pay less than in a conventional development.

D57


Capex € 575,835.92

Annual costs € 136,723.37 € 138,774.22

Cost of capital € 43,687.50 € 46,308.75

€ 575,835.92 € 180,410.86 € 185,082.96

Value

Increased rent € 52,791.69 € 52,791.69

Rent review adjustment € - € -

€ - € 52,791.69 € 52,791.69

NET INCOME -€ 575,835.92 -€ 127,619.17 -€ 132,291.27

PVs -€ 575,835.92 -€ 123,303.54 -€ 123,495.32

Business case:Net Present Value (NPV) -€ 1,810,972.65

Internal Rate of Return (IRR) Err:523

Profitability Index (PI) 0.21

Total Expenditure (CC2C)

Total Value (VC2C)

Potential tenants unlikely to want to pay more than they would to occupy conventional premises (i.e tenants have fixed b

Tenant will only bid more if operational costs can be shown to be reduced

Developer will achieve increased rent only based on operational cost savings


C2C

ΔO € 52,791.69

€ -

Added value from C2C integration

O2

R2 R1

*

Increase in capital value of property

*

Capitalised cost of integrating C2C

Year

3 4 5 6 7 8

€ 140,855.83 € 142,968.67 € 145,113.20 € 147,289.89 € 149,499.24 € 151,741.73

€ 49,087.27 € 52,032.51 € 55,154.46 € 58,463.72 € 61,971.55 € 65,689.84

€ 189,943.10 € 195,001.17 € 200,267.65 € 205,753.62 € 211,470.79 € 217,431.57

€ 52,791.69 € 52,791.69 € 52,791.69 € 52,791.69 € 52,791.69 € 52,791.69

€ - € 1,583.75 € 1,583.75 € 1,583.75 € 1,583.75 € 1,583.75

€ 52,791.69 € 54,375.44 € 54,375.44 € 54,375.44 € 54,375.44 € 54,375.44

-€ 137,151.41 -€ 140,625.73 -€ 145,892.21 -€ 151,378.18 -€ 157,095.35 -€ 163,056.13

-€ 123,702.71 -€ 122,547.20 -€ 122,837.33 -€ 123,146.24 -€ 123,475.52 -€ 123,826.71

Year Discounted Totals

9 10

€ 575,835.92

€ 154,017.86 € 156,328.13 € 1,211,852.85

€ 69,631.23 € 73,809.10 € 471,065.88

€ 223,649.09 € 230,137.23 € 2,258,754.65

€ 52,791.69 € 52,791.69 € 439,047.67

€ 1,583.75 € 1,583.75 € 8,734.34

€ -

€ 54,375.44 € 54,375.44 € 447,782.00

-€ 169,273.65 -€ 175,761.79

-€ 124,201.32 -€ 124,600.84 -€ 1,810,972.65

O77

Dr Nii A. Ankrah: NPV

INVESTMENT APPRAISALMarket conditions: Market is not yet responsive to

Investor behaviour: Potential investor unlikely to bid more than they would for a conventional premises

Tenant behaviour: Tenant will only pay higher rent based on operational costs achieved

Implications: Investor will achieve increased return only based on an increase in effective rent arising from operational cost savings

Business case will rest entirely on increase in effective rent achieved from operational cost savings achieved by C2C integration

Assumption: Covenant strength not affected

Non-C2C

Tota

l inv

este

d x

yiel

d

I


Tota

l inv

este

d x

yiel

d

VC2C - CC2C

VC2C =

C4



CalculationsOperational cost savings (ΔO) € 52,791.69

100% *

Yield 8%

€ 285,457.78

20%

Increase in tenant's budget (ΔB) = μΔP € 57,091.56

Increase in rent (ΔR) = β x ΔO € 109,883.25

ΔR x (1/yield) € 1,373,540.59 Increase in value of property





Rent growth 3.5%


C2C premium € 500,000.00

Investor's innovation risk perception 2%

Insurance risk 1%

€ 136,723.37


ΔI € 2,027,398.12 C2C investment premium

Business case:-€ 653,857.53

Return on Investment (ROI) -32%

Year

CC2C =


Productivity benefits, new revenues, brand value, etc. (ΔP)Proportion of ΔP reflected in rent increase where market is responsive (μ)

VC2C =

CC2C Calculations

Annual/maintenance cost for year 1 (ΔC2)

CC2C =

VC2C - CC2C

VC2C - CC2C

D36


D37


D39


D46


D47

Dr Nii A. Ankrah: Source: Davis Langdon (no date) The cost and benefit of achieving green buildings, AECOM (Davis Langdon)

D48


D51

Dr Nii A. Ankrah: To be adjusted to reflect investor's budget with due consideration of prevalent market conditions and their perception of risks.

D52

Dr Nii A. Ankrah: Adjusted to reflect investor's lack of experience of these types of properties and concern that unforeseen problems could arise. Such concerns if they exist could lead to investor actually deciding to pay less than in a conventional development.

D53

Dr Nii A. Ankrah: Adjusted to reflect any perceived risk of unforeseen problems that could increase insurance premiums

D58


Expenditure 0 1 2 3

Capex € 500,000.00

Annual costs € 136,723.37 € 138,774.22 € 140,855.83

Cost of capital € 37,933.98 € 40,210.02 € 42,622.62

€ 500,000.00 € 174,657.34 € 178,984.23 € 183,478.45

Value

Increased rent € 109,883.25 € 109,883.25 € 109,883.25

Rent review adjustment € - € - € -

€ - € 109,883.25 € 109,883.25 € 109,883.25

NET INCOME -€ 500,000.00 -€ 64,774.10 -€ 69,100.99 -€ 73,595.20

PVs -€ 500,000.00 -€ 62,583.67 -€ 64,506.51 -€ 66,378.65

Business case:Net Present Value (NPV) -€ 1,188,845.04




Total Value (VC2C)

Potential investor unlikely to bid more than they would for a conventional premises

Tenant will only pay higher rent based on operational costs achieved

Investor will achieve increased return only based on an increase in effective rent arising from operational cost savings

Business case will rest entirely on increase in effective rent achieved from operational cost savings achieved by C2C integration

C2C Rent collected

ΔO € 52,791.69

I

ΔI*yield € 162,191.85 ΔP € 57,091.56

O2

R1

H26

Dr Nii A. Ankrah: Add annual maintenance costs

Increase in value of property

C2C investment premium

Year

4 5 6 7 8 9

€ 142,968.67 € 145,113.20 € 147,289.89 € 149,499.24 € 151,741.73 € 154,017.86

€ 45,179.98 € 47,890.77 € 50,764.22 € 53,810.07 € 57,038.68 € 60,461.00

€ 188,148.64 € 193,003.97 € 198,054.12 € 203,309.32 € 208,780.41 € 214,478.86

€ 109,883.25 € 109,883.25 € 109,883.25 € 109,883.25 € 109,883.25 € 109,883.25

€ 3,296.50 € 3,296.50 € 3,296.50 € 3,296.50 € 3,296.50 € 3,296.50

€ 113,179.74 € 113,179.74 € 113,179.74 € 113,179.74 € 113,179.74 € 113,179.74

-€ 74,968.90 -€ 79,824.23 -€ 84,874.37 -€ 90,129.57 -€ 95,600.67 -€ 101,299.11

-€ 65,331.06 -€ 67,209.86 -€ 69,045.36 -€ 70,841.03 -€ 72,600.25 -€ 74,326.30

10

€ 500,000.00

€ 156,328.13 € 1,211,852.85

€ 64,088.66 € 409,027.87

€ 220,416.79 € 2,120,880.72

€ 109,883.25 € 913,855.60

€ 3,296.50 € 18,180.08

€ -

€ 113,179.74 € 932,035.68

-€ 107,237.04

-€ 76,022.36 -€ 1,188,845.04

O77


INVESTMENT APPRAISALMarket conditions: Market is not yet responsive to C2C

Tenant behaviour: Potential tenants unlikely to want to pay more than they would to occupy conventional premises (i.e tenants have fixed budget for premises)

Implications: Tenant will only bid more if operational costs can be shown to be reduced


Non-C2C

Tota

l Cos

t of O

ccup

atio

n (1-β)ΔO

βΔO

μΔP

(1-μ)ΔP



O1

R1

VC2C - CC2C

VC2C =

CC2C =

C4


D28


Savings in Operating costs (ΔO) € 52,791.69

0%

Yield 8%

Operational savings accruing to tenant (1-β)ΔO € 52,791.69

€ 285,457.78

0%

Productivity benefits accruing to tenant(1-μ)ΔP € 285,457.78

Tenant savings (ΔS) = (1-β)ΔO + (1-μ) € 348,396.95

€ 2,897,479.94






C2C premium € 300,000.00

€ 2,494,981.60

Business case: € 402,498.34

Return on Investment (ROI) 16%

DCF Calculations Year

Expenditure 0 1 2

Increased rent € 300,000.00 € 300,000.00

Rent review adjustment € - € -

€ - € 300,000.00 € 300,000.00

Value

VC2C Calculations


Productivity benefits, new revenues, brand value, etc. (ΔP)Proportion of ΔP reflected in budget increase where market is responsive (μ)

VC2C =

CC2C Calculations

CC2C =

VC2C - CC2C

VC2C - CC2C


D33

Dr Nii A. Ankrah: Savings/m2 x floor area

D34


D35


D38


D45


D46


D49

Dr Nii A. Ankrah: Tenant to enter rent they are willing to bid in relation to comparable property on 'Attributes of site' sheet

D52


Annual savings accruing to tenant € 348,396.95 € 348,396.95

Interest on savings € 25,084.58

€ - € 373,481.53 € 348,396.95

NET INCOME € - € 73,481.53 € 48,396.95

PVs € - € 70,996.65 € 45,179.07

Business case:Net Present Value (NPV) € 377,099.94



Total Value (VC2C)

Potential tenants unlikely to want to pay more than they would to occupy conventional premises (i.e tenants have fixed budget for premises)

Tenant will only bid more if operational costs can be shown to be reduced


C2C

ΔO € 52,791.69

ΔP € 285,457.78

Added value from C2C integration

O2

R2 R1

*

Present Value

*

Present Value

Year

3 4 5 6 7 8

€ 300,000.00 € 300,000.00 € 300,000.00 € 300,000.00 € 300,000.00 € 300,000.00

€ - € 9,000.00 € 9,000.00 € 9,000.00 € 9,000.00 € 9,000.00

€ 300,000.00 € 309,000.00 € 309,000.00 € 309,000.00 € 309,000.00 € 309,000.00

€ 348,396.95 € 348,396.95 € 348,396.95 € 348,396.95 € 348,396.95 € 348,396.95

€ 348,396.95 € 348,396.95 € 348,396.95 € 348,396.95 € 348,396.95 € 348,396.95

€ 48,396.95 € 39,396.95 € 39,396.95 € 39,396.95 € 39,396.95 € 39,396.95

€ 43,651.28 € 34,332.17 € 33,171.18 € 32,049.45 € 30,965.65 € 29,918.50


9 10

€ 300,000.00 € 300,000.00 € 2,494,981.60

€ 9,000.00 € 9,000.00 € 49,634.72

€ -

€ 309,000.00 € 309,000.00 € 2,544,616.31

€ 348,396.95 € 348,396.95 € 2,897,479.94

€ 24,236.31

€ -

€ 348,396.95 € 348,396.95 € 2,921,716.25

€ 39,396.95 € 39,396.95

€ 28,906.76 € 27,929.24 € 377,099.94

O71


INVESTMENT APPRAISALMarket conditions: Property market influence on owner occupier behaviour is limited or non-existent

Owner Occupier behaviour: Not driven by profit motive

Inspired by C2C vision and keen to experiment on C2C to realise the benefits it offers

Implications: Extent of implementation of C2C only limited by the budget available

The budget may be bigger, equal, or even less than that required for comparable non-C2C development

Business case is based on the operational cost savings plus productivity benefits, brand value, etc. achieved by C2C integration

Non-C2C

Tota

l bud

get

Tota

l bud

get

B



VC2C - CC2C

VC2C =

CC2C =

CalculationsOperational cost savings (ΔO) € 52,791.69

Productivity benefits, etc. (ΔP) € 285,457.78

Other revenues and savings (ΔR) € -

ΔO + ΔP + ΔR € 338,249.47 Added value per anum

€ 2,813,087.32 PV


€ 575,835.92

€ 136,723.37


€ 2,146,625.61 C2C investment premium

Business case: € 666,461.71

Return on Investment (ROI) 31%

Year

Expenditure 0 1 2 3

Capex € 575,835.92

Annual costs € 136,723.37 € 138,774.22 € 140,855.83

Cost of capital € 43,687.50 € 46,308.75 € 49,087.27

€ 575,835.92 € 180,410.86 € 185,082.96 € 189,943.10

Value

Operational cost savings (ΔO) € 52,791.69 € 52,791.69 € 52,791.69

Productivity benefits, etc. (ΔP) € 285,457.78 € 285,457.78 € 285,457.78

Other revenues and savings (ΔR) € - € - € -

Total added value (VC2C) =

CC2C CalculationsCapex (ΔB1)

Annual/maintenance cost for year 1 (ΔB2)

Total cost (CC2C) = ΔB1 + Σ(₁,n;i)ΔB2 + C

VC2C - CC2C

VC2C - CC2C


D39

Dr Nii A. Ankrah: Adjusted to reflect owners' lack of experience of these types of buildings and concern that unforeseen problems could arise. Such concerns if they exist could lead to owner actually deciding to reduce the budget for the development.

D48


€ - € 338,249.47 € 338,249.47 € 338,249.47

NET INCOME -€ 575,835.92 € 157,838.61 € 153,166.51 € 148,306.37

PVs -€ 575,835.92 € 152,501.07 € 142,982.57 € 133,763.85

Business case:Net Present Value (NPV) € 554,332.67

Internal Rate of Return (IRR) 17%


Total Value (VC2C)

Property market influence on owner occupier behaviour is limited or non-existent

Inspired by C2C vision and keen to experiment on C2C to realise the benefits it offers

Extent of implementation of C2C only limited by the budget available

The budget may be bigger, equal, or even less than that required for comparable non-C2C development

Business case is based on the operational cost savings plus productivity benefits, brand value, etc. achieved by C2C integration

C2C Added value

Savings in operating costs ΔO € 52,791.69

B

Other revenues and savings ΔR € -

€ 575,835.92 ΔP € 285,457.78 Productivity improvements

€ 136,723.37

ΔB1

ΔB2

H23

Dr Nii A. Ankrah: Add annual maintenance costs ΔB2

H26

Dr Nii A. Ankrah: per anum

Added value per anum

C2C investment premium

Year

4 5 6 7 8 9

€ 142,968.67 € 145,113.20 € 147,289.89 € 149,499.24 € 151,741.73 € 154,017.86

€ 52,032.51 € 55,154.46 € 58,463.72 € 61,971.55 € 65,689.84 € 69,631.23

€ 195,001.17 € 200,267.65 € 205,753.62 € 211,470.79 € 217,431.57 € 223,649.09

€ 52,791.69 € 52,791.69 € 52,791.69 € 52,791.69 € 52,791.69 € 52,791.69

€ 285,457.78 € 285,457.78 € 285,457.78 € 285,457.78 € 285,457.78 € 285,457.78

€ - € - € - € - € - € -

€ 338,249.47 € 338,249.47 € 338,249.47 € 338,249.47 € 338,249.47 € 338,249.47

€ 143,248.29 € 137,981.81 € 132,495.85 € 126,778.68 € 120,817.90 € 114,600.38

€ 124,832.61 € 116,176.98 € 107,785.46 € 99,646.89 € 91,750.51 € 84,085.85

Year

10 Discounted Totals

€ 575,835.92

€ 156,328.13 € 1,211,852.85

€ 73,809.10 € 471,065.88

€ 230,137.23 € 2,258,754.65

€ 52,791.69 € 439,047.67

€ 285,457.78 € 2,374,039.65

€ - € -

€ 338,249.47 € 2,813,087.32

€ 108,112.24

€ 76,642.80 € 554,332.67

O68


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