Project Site Selection

Introduction

Selection of construction methods

Site selection is also termed as Construction methods is one of the means which is used to change the resources in the construction’s project. The management and programming technique is of lesser value for a project wherein if construction methods do not apply optimal costs and safety. The construction's method selection not only affects the activity selection and sequence of work but even requires its duration. In the means of development, such a process so iterative and need the team and members of construction (Alarcon & et al., 2018).

This assignment is regarding Site selection wherein the process to examine various options and assessment of linked advantages and disadvantages will be discussed. The choice of the sites will be the main activity for this project, wherein careful consideration will be given regarding different factors. During the time of selection, strategic, long term, and non-repetitive decisions will be highly required and along with future planning. The site selected for this project is the office/development /refurbishment opportunity on Headstone Drive, Harrow, HA1 4TY, which is in the UK.

It is analyzed that the owner of the property is Kodak HQ, which has planned to sell the vacant possession on long leasehold interest along with the option to purchase Freehold Interest. The selected site even possesses the planning permission to add two more new floors of a total of 70,000 sq—Ft. Of B1 offices. However, when CBRE development found it to be an excellent investment opportunity and decided to proceed next stage of development and plan to sell upon completion, UK's local authority is concerned regarding the reduction of the embodied carbon and carbon emissions in materials, construction process and also building components to contribute towards the UK’s 2050 NetZero emissions target. This is the reason that employer of CBRE development should acknowledge the present situation of the UK and understand the carbon emission situation of the UK.

The present economic and environmental situation of the UK

The UK possesses the sixth-largest economy in the world wherein the British economic growth has declined due to leaving the European Union and decreased in the second quarter of 2019. The GDP of the UK has increased only by 1.4% in the year 2019, which increased by 1.3% in 2018. The country's economy has been affected by the uncertainties which have gone through the negotiation process during BREXIT and are expected to rise in future trade costs. The potential growth has also declined because of the slower accumulation of capital, lower productivity, and a decrease in net migration through the European Union.

As per the IMF, who have gone through WTO trade rules have stated that there would be long-term production loss for the UK of approximately 5-8% of GDP as compared to the situation without Brexit(Department for Business, Innovation, and Skills, 2013). Since the year 2018, there is a decline in business investment, and consumption has also minimized due to weaker growth in the real income as well as the public debt have reached above 85% of GDP. The government of the UK has committed to enhance investment spending by 3% of GDP and enhance budget spending (Brandon and Lombardi, 2015).

Moreover, the government has not planned to increase the income taxes, national insurance's cost, and value-added taxes. Despite the growth, the employment rate has reached higher, wherein unemployment is measured to reach 3.8% of the total working population. However, According to the IMF, the price of unemployment will be expected to reach 4.8% by the end of 2020. The job insecurity, expansion of part-time work, and freezes of wages have led to a decline in a job opportunity. However, the government is making its effort to invest in infrastructure, increase the women's participation in the labor market and enhance the supply of housing to assist sustainable growth (Zwikael & et al., 2014).

In addition to that, National carbon emissions, which are targeted for the UK, have set out Climate change Act till the period to 2050, which has made a significant change in the built-in environment for things to be attained. The built environment has led to 50% of the UK carbon emissions, 35 % of the landfill waste, 50% of the water consumption, and 13% of the raw materials which is used in the UK (Hakkinen and Belloni, 2019).

It is analyzed that the construction industry is acknowledged as critical enablers, which possess the potential to have a significant contribution to every aspect of sustainable development as there is a considerable impact that is created by building activities upon the environment, social and economic impact. The UK government has made a publish of various reports and initiatives which should be applied by the construction sites to minimize the effects (Gibson & et al., 2016).

Key Environmental and Planning Consideration

Environmental Issues and Consideration

It is expected that when the employer of CBRE development proceeds to the next stage of the development/refurbishment process, then they will face plenty of construction and planning issues. To be safe and provide enhanced life conditions of people, Environment protection is one of the essential problems wherein construction is one of the non-environment friendly processes (Alarcon & et al., 2018). It is indicated that operation and building construction possess direct and indirect effects on the environment. The structure is stated as the primary source of pollution as compared to other industries. There is the built-in positive and negative impact of the construction on the environment. It is expected that the development of the building will be damaging the fragile ecosystem and will lead to several issues.

It should be noted that the state of an environmental situation not only depends upon the anthropogenic and climatic influences but also depend upon the environment and responsibilities of authorities (Lines, Sullivan, Hurtado & Savicky, 2015). It is seen that the B1 office project is located in a populated area. Thus, people who are living at or close to the construction sites are prone to the harmful effects on health due to dust, noise, and vibration due to pile driving. Moreover, during the phase of construction, dust and noise are considered significant factors that affect the health of humans. It is even stated that this is the reason that UK local authority has kept an objection upon the construction company (Eriksson & Westerberg, 2011).

It is stated that these constructions would even impact the natural respires which are applied at the time of the construction process such as energy, materials, water, and land. Moreover, the construction equipment, which will be used while building two more floors of the B1, would also make the consumption of natural resources like electricity and diesel fuels. This would further generate a higher amount of pollution, which results during the time of transportation and extraction of the raw material.

Thus, CBRE development’s employer should even make concern regarding natural resources before construction. Since, construction industry generates worldwide substantial environmental impact and contribution to half of the total energy consumption of higher-income countries and leads to greenhouse gas emissions so if the employer plans to complete the construction project than he should minimize the energy consumption and apply those products and techniques which reduce the greenhouse emission(Asbach, Dorndorf and Pesch, 2019).

The employer would even face the ecosystem issues like construction of the building would lead to adverse environmental impacts such as noise, dust, toxic generation, air pollution, bad odor, climate change, land usage, etc. The emission of air from vehicular exhausts and dirt at the time of construction would be a significant issue for the employer as this emission possesses CO2, NO2, and SO2. The employee might even face the problem of noise emission due to construction equipment, vehicles, and air compressors. The generation of the noise and generation of waste from construction activities would further affect the operation of the construction sites (Dvir, Raz & Shenhar,2013).

Planning Issues and Consideration

Project management is termed as the usage of tools and techniques to direct the utilization of resources to attain the required task within time and cost constraints. There are five phases of project management, which includes initiation, planning, execution, performance monitoring, and closure. Preparation possesses the creation of maps for everyone to direct. The project management makes the creation of formal documents as a project management plan, which leads the project execution and guides the project (Asbach, Dorndorf, and Pesch, 2019).

The performance reviews and monitored and after the progress and performance are executes, the project is tracked for the planning wherein closure is made when the project is completed. However, it is found that there are several obstacles and issues linked with project completion, which is expected to go wrong while keeping track of the construction work. The construction project planning is attaining more considerable attention as a lack of deterministic planning would lead to failure of the project. There is a more significant concern in the collapse of construction planning to attain goals and attain resources (Lines, Sullivan, Hurtado & Savicky, 2015).

Planning is one of the main elements which needs to be considered by the employee of the CBRE development for successful competition of the construction project. It will give a road map to the project and milestone through which progress could be measured. CBRE development should consider the main four objectives of planning that include work execution, control over the human resources and materials: and coordination of activities. However, safety is one of the major issues linked with a construction project which need to be considered by the CBRE development while developing construction project as humanitarian issues are connected with workers and ramification of costs for the records. It is essential that planning and scheduling specification system should be included in the planning of the financial needs, material needs, equipment needs, and workforce needs.

Employers and others associated with CBRE development should schedule actual activity and give feedback to monitor the costs, schedule, and use resources. Employees should even consider construction projects wherein scheduling and planning should be included in a construction contract. Moreover, characteristics of the project need to be taken into account during the determination of which schedule and planning clauses should be covered while a construction project (Dvir, Raz & Shenhar, 2013).

It is stated that CBRE development's employee should recognize the importance of effective planning, and review of the project is linked with traditional means of costs, quality, time, and other critical success factors. If the employers of CBRE development take effective planning into consideration than it can lead to the prevention of ill health and accidents of the personnel of the site. Since the construction industry faces several issues due to the working pattern, so usage of modern planning techniques might decline the dilapidation of the resources and strengthen the company performance (Yang, Chen & Huang, 2012).

Brexit and its Impact on the Project

As per the provided case, it is apparent that the project site which is selected was previously possessed by the Kodaq headquarter operating within that particular sector. The place was available for refurbishment on the area of headstone drive, plow, HA1 4TY. There was an option to purchase the freehold interest with a further additional plan of adding two other floors that makes a total area of 70,000 sq.ft. However, it is expected that Brexit is likely to have an impact on the building in terms of its cost and other planning activities. Notably, there is a considerable impact in terms of the growth of Brexit upon the construction industry of the UK. Notably, Brexit has a significant influence on the industry and the potential outcomes of operations in this sector. It is to be noted that the scale of a problem linked with Brexit and the construction yet to be known extensively.

With more than 750,000 people working with the industry, its contribution to the UK economy is quite significant. Brexit is expected to provide some adverse impact on the construction projects, especially in terms of the cost of operations in this sector. The cost impact of Brexit on the construction industry is mainly linked with the price over overrun as a result of the new laws post-Brexit. Most notably, the new regulations post-Brexit will forces companies to acquire contracts at a higher rate that will not be cost-effective and will not ensure the best value for money for the people. Linking this to the given case study, it is apparent that CBRE development, the company which is proposing to put money on the project needs to evaluate the impact of Brexit on the cost of the project that involved building or adding more floors in the structure (Design Buildings, 2019).

One of the essential reasons in this context is concerning the delay in the procurement of materials and goods in the construction sector post-Brexit, which can increase the cost of a particular project by more than 10-15%. With a delay of each day, the damage of construction projects is expected to grow leaps and bounds. Brexit has raised the level of lots of uncertainty for the construction industry, and any further projects post-Brexit are scheduled to run on cot overrun risks. The lower confidence from the end of the investor post Brexit can also be termed as a potential impact on the industry (PBC Today, 2019).

The investment planned by CBRE development to invest £10.5 million in the refurbishment of the procured area in the headstone and sell it as at a profit upon completion needs to be evaluated in alignment with the probable influence of Brexit. This can also be justified by the fact that the construction industry of the UK relies heavily on skilled migrant foreign labor to conduct its operations. These are people mostly outside of the EU who are provided with the rights of free movement, which further ensures there is no shortage of skilled labor in the industry. However, post-Brexit, immigration is expected to keep limited, which also leads to a lack of skilled labor, and it will increase the cost of the projects as labor demands will outstrip supply. This further shows that the investment plan of CBRE development might be impacted as a possible effect of Brexit (Design Buildings, 2019).

Elemental Cost Plan

The increasing significance of environmental problems has generated the requirement to better tradeoff between cost and carbon emission. One of the methods to manage the tradeoff between cost and carbon emission is to change the traditional elemental cost plan to integrate data on carbon emission. One fundamental principle to achieve this is by allowing the quantification and comparison of the environmental influence of the scenario through life cycle evaluation. This is described as an objective method to evaluate and to quantify the ecological outcomes of the project through the entire life cycle. In the meantime, various tools are developed to support life cycle evaluation and to make it much expedient and straightforward. Life cycle evaluation is a methodological tool that utilizes life cycle thinking in a numerical manner on an environmental assessment of functions associated with the project. It is an extensive application in construction for environmental performance evaluation (Fu & et. Al., 2014).

Based on the life cycle evaluation outline, the following system is recommended to incorporate data on carbon emission and to compare the proposals or design specifications.

The structure of the system comprises three essential procedures, which are calculation and evaluation of carbon emission of construction procedure, comparison of action to evaluate the carbon emission of embodied materials, types of transportation and tools between the traditional project plan and substitute plan and making a decision and providing feedback after evaluating carbon emission of diverse proposals and designs.

By considering the security and confidentiality of the project data, the browser/server method can be accepted to develop a carbon emission computation system. The system can be able to evaluate the GHG impact of construction functions concerning CO2 equivalency. It can do this through computing the personified CO2 equivalency materials along with CO2 related to transportation. It also considers the equipment utilized and waste disposal management.

The system can be utilized to evaluate and compare the sustainability performance of diverse designs and proposals for the project. It assists in high pointing the places where better carbon saving can be achieved on the project. It can also be utilized to help the computation of users' overall carbon emission from construction functions and recognize areas of better savings. It further supports the total emissions and calculation in the conservation with CO2 release (Kim & et. Al., 2009).

Based on the structure of carbon sources, the construction data regarding carbon release models should be recorded in the first phase. After associated project data and types are described, the critical process is the interactions connecting between the recorded project data and associated carbon quantity through a built-in database. It afterward automatically evaluates the embodied and transports carbon emission for every design or proposal (Craig & et. Al., 2017). Furthermore, for the demand of the majority of users, the diverse recommendations can be compared within the system, and feedback is given to the best proposal or design.

The above system can permit to evaluate the materials stated in the construction project that it is involved with and to develop substitute material options based on experience and knowledge, where such alternatives can enhance on previous carbon release level, while also associating to its influence on project expenses.

Moreover, it makes an enhanced connection between the contractor, designer, and owner of the project in a critical field of construction sustainability. It will pass on necessary contractor expertise in the area of carbon release directly to the client, hence making the client conscious regarding the options and substitutes that they may not have traditionally known within the project procedure (Center for Sustainable Energy, 2018). This will also eventually permit the client to play an active and significant part in supporting a sustainable approach to construction.

Following is the elemental cost plan of the project.

Profit Evaluation

To evaluate the profit, a discounted cash flow method is used. It is considered that the discounted rate will be 12% for the project. The expected rent for the initial period is forecasted at £220000 per annum, which will gradually increase to about £250000 after 10 years. The essential costs comprise maintenance cost and utility costs, representing the electricity expenses.

Following is the estimated NPV of the project based on the above assumptions.

From the analysis, it can be observed that NPV is negative. Therefore it can be stated that the project can give a negative yield and may result in a loss of investment.

The following table demonstrates the IRR of the project.

From the above figure, it can be observed that IRR is -21%, which is harmful, therefore it can be stated that the project may bring negative yield to the investment.

Conclusion and Recommendation

In this particular section of the study, the focus would be mainly on analyzing the overall findings and conclude the research in context to the objectives of the paper. Furthermore, based on the results, the report can make recommendations regarding the investment to be made or not based on construction industry figures and trends of the UK. Notably, as per the provided case, the CBRE development team has selected a site in the UK which will work towards analyzing the possible investment that can be made in the same and how to post completion of the deal, it can be sold at a profit to another party. Furthermore, the short case provide has shown that the company is targeting to include more floors in the already completed site, which will make the entire investment to be around £10.5 million.

The development of the refurbishment process of the site needs to be evaluated based on the current condition of the UK post-Brexit, which means the role of Brexit in this investment is deemed as key. Notably, several environmental and planning issues can hamper the outcome of this investment in the long run. Economically, the UK market has been on an increasing trend with a 1.3% boost in the year 2019. Though the economic angle has not been disturb as a result of Brexit, the growth rate has undoubtedly become weaker in recent times. During the refurbishment process, the CBRE team is expected to face several issues related to the environment and planning, especially in the construction stage. Construction is always seen as a non-environmental operation, and hence the UK government considerable regulations governing the sector in terms of environmental protection. Since pollution and greenhouse gas emissions are quite common in this sector, the CBRE team might face ecological issues in executing their goals of refurbishing the area of investment.

About Brexit, it is known that the construction is facing issues from lack of migrant skilled from other countries from the EU in the UK, which further flows in the form of a scarcity of employees in construction projects of the UK. This will also pose a significant challenge for the execution of the project. A cost plan has also been determined considering the factors of environment, planning, and Brexit in terms of the investment in this property for the CBRE team. Low embedded carbon emission is expected to cost higher as compared to high embedded carbon emission. About the evaluation of cost in this project, a profit evaluation has also been formed based on the NPV and IRR techniques. Surprisingly, considering all the effects that can be seen in this project, the NPV I negative, which shows that the project might not yield a positive result. Apart from this, IRR calculated has shown a -21% figure, which also confirms the fate of the investment to be negative. Hence, it can be recommended that the CBRE team should not proceed with the investment in the selected, which is expected to amount up to £10.5 million.

Continue your journey with our comprehensive guide to Project Planning and Management Techniques.

Continue your journey with our comprehensive guide to Project Planning and Management Techniques.

References

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