written by Ishantha
INTRODUCTION
The question frequently asked by those who have an economic world view – those who say that the world is made out of demand and supply and there is nothing else – and explains the love and compassion in terms of demand and supply with the ‘economist theory of social relationships’ - is that, why we should occupy Architects to construct buildings when an engineer can do the job at a lower price with lower fees of consultancy. There is no argument that there are major drawbacks to these theories. The reality lies beyond their scope - it is human desire that generates the demand they talk about - the desire, as pictured by Shakespeare or Buddha, that draws us to the grave leaving behind us ‘a tale told by an insane one – full of glamour, sound and fury and with no meaning’.
When an economist says that it is an uneconomical use of words in a poem to say “half a league, half a league, half a league – onwards” where it is possible to say “one and half leagues – onwards”, the poet can well argue and flatten the economist. But an Architect cannot! Architecture is directly related to money and investments and therefore the architect has to justify with terms of economics the extra five words of his poetry.
The simple argument intelligible to the money minded investor and his cost consultants is that the work of Architecture adds value to a building - the value of a building constructed spending one billion is only one billion where as if the same building erected as a piece of Architecture spending one and half billions, may worth two billions and therefore it is beneficial even if he pays quarter billion to the consultant.
Any piece of Architecture has a value beyond the quantitative materialistic point of view of the economics. But value added design refers to the measurable economic benefit gained due to a design. Works of an Architect today, if to be sold in front of a client, must be pictured as increasing the economic value and potential of places and buildings. To project confidence on the client, the Architect has to demonstrate what he talks about with work examples.
HOW ECONOMIC VALUE IS GENERATED BY ARCHITECTURE
The argument here is that Architecture generates economic value by the virtue of cleaver design. Architecture moderates the way a place is perceived by people and thereby builds the image of the business and it is one of the main sources of customer attraction. Architecture accelerates the development of a business and therefore acts as a factor that adds value to the business.
VALUE OF A BUILDING DEPENDS ON ITS DESIGN THAN ITS CONSTRUCTION COST
A number of methods of cost controlling are proposed by those who are engaged in the business of construction such as quantity surveyors, contractors and architects the world over. One of the most restrictive concepts of cost controlling that come to influence a design at the preliminary sketch stage is Building morphology. The rules of morphology depicts that it is uneconomical to build long buildings, spreaded buildings and scattered individual units. What it indirectly suggests is that the most economical form of a building is a rectangular box. The other restriction is the idea that the building is profitable when the circulation spaces are minimised.
In this method the cost consultants and quantity surveyors can compare building Design Proposals and comment on the building cost. For instance compairing the percentages of rentable spaces it will be suggested that the proposal with a higher amount of rentable space is going to gain much profit, The drawback to this argument lies in the fossil assumption that the demand for the space is equal in both cases. For instance comparing Borella supper market and Majestic City, the theory of morphology will suggest the Borella supper market to be a far superior design with a minimal amount of circulation space, maximum utilization of land and almost box form that minimises the construction cost. But we know that in reality the design is an utter failure.
The rentable value of floor area is about twenty times lower in Borella super market and the occupancy factor is only about 40% where as in Majestic City it is almost fully occupied.
Dark narrow corridors and less lobby spaces with its blank facades have created an unpleasant and distractive building. This is a classic example which shows that the most economical building by no means is the most profitable building. It is clear enough today that the economic value of a building depends on its design.
ARCHITECTURAL CONCEPT DESIGNS HAVE AN ECONOMIC VALUE IN THEM
Architecture therefore has a commercial value, it is something that can be sold with the building and enhances its sellable price. The market price of rentable space will depend on the spatial quality of the building rather than the cost of its materials. A cleaver piece of Architecture adds value to the property as well as to the place.
ECONOMIC VALUE OF ARCHITECTURE AS A FORM OF ART
Architecture is defined by most theorists as a form of art although it has many other social, economical and psychological aspects. Architecture is said to be ‘frozen music’ where when you move through a building you experience an orchestration of spaces. Being a work of art a piece of architecture is said to be containing with it an artistic value.
ECONOMIC VALUE OF A FUNCTIONING BUILDING
The fact how well a building works moderates its economic value. A hospital a railway station or a factory for instance will increase or decrease the productivity and quality of service depending on the cleaver establishment of relationships and creation of correct atmosphere to the function of the building. A design that simply works well therefore has a value over another one which is not.
ECONOMIC VALUE DUE TO CLEAVER SELECTION OF FUNCTION AND SITE
Charles Correa identifies a city as an engine of economy and buildings as its spare parts. If the role of a building in the city is correctly identified and placed in the correct location that act itself will increase the impotency of that building and therefore the value of the building will increase.
On the other hand the idea of the sociologists is that places in a city have economic potentials due to prioritisation of functions and movement of people. The identification of the potential of site will increase the value of the building erected at that site and will contribute to the development of the business.
ECONOMIC VALUE DUE TO SOCIAL BELIEFS ON A BUILDING
The social belief that a building is a perfect one, regardless whether it is actually so, will contribute to the economic value of it. For instance the Torrington square of Colombo or the Colombo town hall contains with them an enormous value not due to any virtue of the design or the historical value but merely due to the social belief that they are perfect of perfection.
HOW ARCHITECTURE BECOMES A VALUE ADDED SERVICE
Value added service of architects thus can be defined as increasing the pre conceived commercial value of a building or a building complex by cleaver exploitation of above mentioned value related aspects of building with the virtue of the special knowledge and ability of the Architect. However to make an investor confident of the added value to his building at the very beginning of a project is a problem due to their method of perseverance of value.
NEED TO CONSIDER ARCHITECTURAL QUALITATIVE ATTRIBUTES IN PROJECT APPRAISALS
A. Demodaran in his book ‘Investment Valuation’ says that it’s a myth to believe that valuation is objective since valuation models are quantitative. However in the case of a building project appraisal, the changes in the parameters such as rentable value of the created space and the increased value of land due to the particular subjective aspects of the project are hardly considered. For instance the consideration of the present opportunity cost of land is considered as a parameter that does not vary due to the erection of a building of particular nature.
On the other hand valuation is quantitative. Therefore the consideration of qualitative attributes is totally neglected. The added value due to the personality of the building has no way to enter into valuation in terms of numbers.
ADDED VALUE OF ARCHITECTURE AS THE FORM OF SPATIAL ART
The ability of architecture to add value to a building is discussed. Architecture as the spatial art can invariably moderate its perceived moods, behaviour patterns as well as value but those aspects to be taken as important in providing a value added service and in expressing them with confident at the preliminary stages of feasibility are hard to grasp. While Qualitative parameters of value added services are already taken into discussion in the previous chapter, this is a consideration of strategic parameters of the subject.
VALUE ADDED BY CLEVER IDENTIFICATION OF THE POTENTIAL OF THE CONTEXT
The most important element of a value added design is the out look for potentials of places. The identification of the potential activity and the business of a place will occur both the rise of value of the created building and also the value of its context. Kurokava identifies this as the philosophy of symbiosis where two or more things exist in harmony due to the drawn inter-connected relationships.
The proposed Crescat parking building and the restaurant building at the Oberoy site is such an example where the presence of the parking and the restaurant exploits the potential of the presence of the hotel and the apartment building by using both as its catchments area of customers. On the other hand the presence of such a parking and restaurant will increase the vale of apartment blocks and the value of the hotel too.
The architects’ intervention in identification of those potentials shall be taken as a direct contribution of the profession of Architecture to add value to a project.
ADDED VALUES DUE TO THE VIRTUES OF CREATED PSYCHO-SOCIO SPACE
‘A postulate of sound investing is that an investor does not pay more for an assert than its worth. The price that is paid for any assert should reflect the cash flow it is expected to generate’ Says A. Damodaran in his ‘Investment Valuation’.
Magic or the misery of Architecture is that it will moderate the perceived value of a space. Architecture under another light can be defined as a psycho-social art where what is created by Architecture is psychological and sociological space. The exploitation of the ability of space to project psychological impacts on those who perceive that space and exploitation of the spatial potential to induce a certain kind of social behaviour will reflect back an added value to the Architectural space.
If the moderation of the cash flow due to this assert of Architecture is cleverly traced by the Architect, then only the true price of his service come to be visible.
THE PRESENCE OF THE ARCHITECT AS A HIGH PROFILE PERSON ITSELF HAS A VALUE
Architecture is said to be one of the glamorous professions in the world. Therefore the presence of the name of an Architect itself may bring value to a building. For instance the presence of the name Geofrey Bawa itself increases the reputation and tourist attraction to his hotels and the presence of the name Sit Norman Froster have increased the reputation of his Hong Kong and Shanghai bank. The amount of publications and seminars held the world over on the subject of Froster and his design has made the bank a world wide reputed place and that reputation adds value to their business.
NEED TO DEMONSTRATE BY WORK EXAMPLE
The intention of this essay is both to emphasise on the need of value added design and the need to demonstrate by work examples. A demonstration of work examples shall not be an advertisement but a presentation of a portfolio. The value of the work examples are as fallows.
TO DEVELOP INVESTORS CONFIDENCE
An architect should express his arguments with facts and those should not appear to be dreams. For instance the Kansai Air Terminal, the world’s longest structure, designed by Ranso Piano spends forty percent of its income for maintenance yet works as profitable. The air terminal has no other virtue over other air terminals than its architecture. However the greatest difficulty is to build the confidence of the investor in the case of such a project that it is possible.
The only possible tool at the very beginning stage of the project to display that the thoughts of the Architect is not just dreams, is the work examples.
FOR THE JUSTIFICATION OF THE CHARGES OF ARCHITECTS
What ever the determined price of Architecture by the governing bodies be, the market price of architecture is going down and existence of a black market price and a competition in the field is common knowledge. In such a situation, justification of the charges of the Architect is at a crisis.
The need to bring out the argument of added value and the demonstration with the work examples to establish the argument is essential for the individual Architect to make sure the reasonability of his payments.
CONCLUSION
‘The hallmarks of modern marketing are customer orientation and a long range or strategic view point that makes an organisation responsible to its ever-changing environment’ says E.W.Fredrick in his ‘Industrial Marketing Strategy’. The environment of architects has change a lot when compared to the same in twenty years back, resulting the profession challenges of facing competition and clients confronted with people from the construction industry. The service of the Architect shall be questioned and occasionally brought into courts.
For Architecture to continue as important and glamorous as it was earlier, the need of customer orientation and a long term strategic viewpoint is required as suggested by E.W.Fredrick. The role and the so called Devine service of the Architect is to be well justified for ‘the customer’ to protect Architects’ role as the leader of the team and the first person of the project. “The view often expressed that designers must provide leadership and that if they do not the quality of the building in both function and aesthetics will suffer. The weakness in this argument were provided by a plethora of studies which suggested that the traditional method of independent practice was equally susceptible to considerable criticism for inadequate performance of building not only in function and aesthetic terms but also in technical, cost control and management aspects” says T.Muir in his ‘Collaborative Practice in the Built Environment’.
Therefore the need to demonstrate the service an Architect provides s and the benefit of the customer, in terms of work example, is an essential need of the day. The development of the customers’ confidence on the so called added value is important in the sense that no investor will ever take an unnecessary risk.
ARCHITECTURE ADDS VALUE TO BUSINESS
Working with developers and investors, the Architect acts as a professional involved in a business. In which situation, though the Architect has to keep at the back of his mind his social responsibilities, has to work for the client whom is going to pay him for the services.
INCREASE THE RENTABILITY OF SPACE
The most concerned matter as thought by the investors in which case will be the rentable floor area. The idea behind the argument is that more the rentable area more will be the profit gain. The mutability of this argument was discussed in the first chapter of this essay but what we argue here is the fact that it should be demonstrated in terms of the very design and with work example.
What matters is the rentability of space and not the rentable amount. Rentability imbeds in it the added value. The designers have succeeded in justifying the large corridors of Majestic City when the question of decreasing rentable floor area is raised. Kandalama hotel is another classic example where more than fifty percent of the space is for corridors and passages and yet generating profit while many other tourist hotels are at a crisis.
DEVELOPMENT OF CLIENT ATTRACTION AND PROJECTION OF PERSONALITY OF A BUSINESS
A quality design on the other hand will increase the amount of client attraction resulting acceleration of business there by adding value to the business, place and the building. For instance the interior design of ODEL Unlimited, with its all weak points of anti response to tropical climate and depiction of pseudo culture in the form of a meaningless green house with dried palmyrah trees, seems to be acting as a place of attraction and contributes to the development of the business.
CONTEMPORARY NEED OF VALUE ADDED SERVICE
the need of value added service is felt today and will be felt much strongly in near future in the field of construction industry and the other fields of business where due to the competition, the need of customer attraction and erection of image and the personality of the companies become intensively important. In which case Architecture is seen becoming an important tool of competition.
ARCHITECTURE IS AN ART AS WELL AS A BUSINESS
At the time of Picasso it may be, but today it is impossible to declare Architecture as a pure form of art simply due to the fact that Architect has to face a competition to win bread and butter for his company. Therefore the Architect has to seek a balance between his art and business.
Architect has to sell his products to the clients and in which case it is impossible to imagine that his clients are willing to buy any thing the Architect produce with the belief that Architecture is great and divine. A. Demodaran in his Investment Valuation states - ‘value of an assert is irrelevant as long as there is a “bigger fool” around, who is willing to buy the assert from them. While this may provide basis for some profits, it is a dangerous game to play, since there is no guarantee that such an investor will still be around when the time to sell comes.’
VALUE ADDED DESIGN IS AN ESSENTIAL INGREDIENT OF THE CONTEMPORARY BUILDING INDUSTRY
In near future, those investors and developers being intelligent, there will be a day where those works of Architects will be compared in terms of added value with methods of project appraisal that are broader in scope rather than with the existing prejudices of ‘capital concerned cheaper construction’ and ‘narrow band life circle costing’.
In which case the need of the architect to add value to the design as well as the need of the demonstration in terms of work examples will be paramount.
