Real Value of Space

Building Better - Real Value of Space - Infographic-1

At Kingspan we pride ourselves on thinking beyond product manufacture, to how those products can benefit the end user.  Not just our direct customers, but their customers too - the people that they are designing, specifying and building for. It was this kind of thinking that prompted us to research the real commercial value that specifying a premium performance product has over a cheaper, commonly used equivalent.

 

Do you get what you pay for?

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There is no question that Kingspan Kooltherm insulation sits in the premium bracket. It’s not cheap. Unashamedly so, because we know that it provides value that delivers far beyond its cost. Our customers understand this too, but there may be times when they need to justify the use of Kooltherm rather than cheaper insulation. After all, insulation is insulation, right? So, we commissioned Sweett Group to quantify the return from using Kingspan Kooltherm insulation in commercial real estate in Britain. It’s a bit of a mouthful, so we called it simply the ‘Real Value of Space’.

It looked at how much additional internal floor space could be created through the specification of Kingspan Kooltherm wall insulation products, compared with an alternative solution. It looked at the cost uplift for the Kingspan product and calculated the return from the extra rental income created by the extra floor space.

Never mind the quality, feel the width…

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We were expecting the results to be positive when they were published in May 2015, but even we were astonished at the scale of the returns that are possible.

  • 92% of 7,290 database buildings analysed for each wall construction type showed a positive ROI

  • 40% of the database buildings showed an ROI between 300% and 1,000%, whilst 18% showed an ROI greater than 1,000%

  • The ROI for the database buildings in locations with non–domestic yields of 5% and lower can exceed 2,500%

As you might expect, the greatest returns came out of London property.  But up and down the country, the story was the same, even in buildings with the highest  yields.

Making space boosts returns

See how only 42mm reduction in wall depth can increase total floor area and therefore rental income.

We decided to take it further

 Meanwhile, in Australia work was underway to explore whether these financial benefits would translate geographically. This time two world-leading asset management and construction consultancies, Currie & Brown Australia and Sweett Group UK, were involved in the study, which was published in June 2016. 
 
In this instance, concrete external wall constructions were examined. Two Kingspan Kooltherm build–ups were compared against conventional steel stud-and-track build-ups incorporating 90 mm glass fibre batts, and the differential in both thickness and cost were considered in the analyses.
 
Despite a CapEx uplift of $18.03 per m2 for the Kingspan solution, the results continued to show the value of specifying a thinner wall build up.
  • 72% of the building scenarios analysed showed a positive ROI
  • A positive ROI, up to 850%, was found for all scenarios with rental rates of $400 per m2 or greater, across all yield rates.

In conclusion…

Whichever side of the world you are on, space is valuable, and you really do get what you pay for if you use Kingspan Kooltherm.

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