SIPs – Adding Space and Value
In May, Savills revealed that more £70/sq ft office deals had already been completed within the City than in the whole on 2014. This premium on commercial space makes maximising usable space within a building footprint essential.
One way of achieving this in cladding applications is by using a highly energy efficient construction method such as Structural Insulated Panels (SIPs). SIPs can achieve the desired level of thermal performance with a reduced construction thickness when compared with traditional alternatives, creating additional internal space.
To investigate how the use of SIPs may help to improve the value of a property, Sweett Group developed a detailed research programme. The first stage in this programme analysed a database of 4,860 buildings. The buildings form a representative segment of the commercial building market in the UK, considering a number of factors including design, use and location, and were generated from a model that considered a range of physical and financial building characteristics.
The study examined two external wall scenarios, achieving U-values of 0.20 W/m2.K and 0.16 W/m2.K respectively. Three build-ups, containing different insulation specifications, were compared for each scenario. For the 0.20 W/m2.K scenario, a high performance, 142 mm SIP construction was tested against both 150 mm and 200 mm metal stud wall constructions insulated with layers of rock mineral fibre and mineral fibre. For the 0.16 W/m2.K scenario, 172 mm high performance SIPs were also compared with two metal stud wall constructions. The differences in both construction thickness and cost were taken into account in the analyses.
The study found that the slimmer construction thickness of the SIP build-ups created significant increases in useable space for many of the database properties. As a result, whilst the cost of the SIP constructions was between £53.00 to £56.00 per m2 greater than the metal stud wall constructions, the return on investment (ROI) achieved through the value of the additional space almost always surpassed this extra cost.
Of the 4,860 database buildings, 88% showed a positive ROI on the cost of the SIPs. For almost a third of buildings, the ROI was between 300% and 1,000%, whilst 9% of the buildings showed an ROI greater than 1,000%.
To verify these results, Sweett Group carried out further assessment work on nine real case studies of different sizes and uses across the UK. The results confirmed the initial findings as each of these buildings showed a positive ROI.
One of the buildings studied was a low-rise technology block on the outskirts of Manchester. By using SIPs over the metal stud wall constructions, internal space was increased by between 121.90/sq m and 182.80/sq m. The capitalised value of this space was shown to be as much as £708,600, leading to an ROI of between 73% and 143% on the cost of the SIPs.
Similar results were achieved at a business park in Milton Keynes where the SIP constructions helped to recover between 223 sq.m and 334.6/sq m of lettable space with a capitalised value of up to £920,504. This resulted in an ROI of between 54% and 122% on the additional cost of the SIPs.
Unsurprisingly, the most significant returns were achieved at the centrally located office blocks in London and Bristol. In Bristol, the capitalised value of the additional space achieved with the SIP constructions was between £1,600,467 and £2,400,700, while in London it reached as high as £7,094,338. In both cases, the returns on the additional cost of the SIPs were considerable with ROI ranging from 153% – 255% in Bristol, and 502% – 720% for the London property.
More information about the Sweett Group study, including the full report, can be viewed here.
For more posts in this series:
- SIPs – The History of a Truly Modern Method of Construction
- SIPs – A High Performance Cladding Solution
- SIPs – A Retro-fit Route
- SIPs – A Versatile Option for New Projects
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