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Good design looks at many aspects of a building. The way that it looks. How it performs. And how it defines the internal space. But the big design question in a commercial environment is, what will my return on investment (ROI) be?
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.
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.
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.