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[Nordic GBC Conference 2013] Pekka Pajakkala - Business Opportunities with Renovations
1. Pekka Pajakkala 31.1.2013 1
Business opportunities with renovations
PEKKA PAJAKKALA, Senior Advisor
VTT Business Solutions / Real Estate and Construction
Nordic GBC-conference, Helsinki, 31.1.2013
2. Pekka Pajakkala 31.1.2013 2
CONTENTS
VTT
European and Nordic Construction Output
• The role and market of R&M of Buildings
Grade for the Finnish Building Stock
• refurbishment debt
Renovation needs in Finland
Company strategies to increase
renovation business
Summary
3. Pekka Pajakkala 31.1.2013 3
VTT’s strategic research portfolio
Addressing innovations, business, services and people
Materials for breakthroughs
functional materials and nanotechnology Enabling electronics and photonics
bio-based chemicals and precursors high-performance microsystems
industrial biomaterials printed intelligence Digital
wood-fibre value chain sensing solutions
world
Low carbon technologies in energy
efficient use of energy
Eco-efficient, intelligent built
renewable energy sources environment Emancipation of data
nuclear energy, clean fossil energy comfort, health and safety interacting with the real world
energy systems, modelling for changes connected sustainable districts gratifying user experience
multimodal intelligent transport managing design complexity
Industrial resource efficiency massively scalable services
integrated design, production
industrial biotechnology - green chemistry
clean water
and use
waste refinery Agile industrial systems
resource efficient processes Technologies for health and organisation and management of
wellbeing global manufacturing
healthier food solutions simulation based engineering
drug discovery and diagnostics
Sustainable systems biology
eco-efficient machines
Sustainable human and organisational practices
development ICT for health
development
VTT: Personnel 3 200 Turnover 315 M€ (2012)
8. Pekka Pajakkala 31.1.2013 8
Growth of GDP and Renovation of Buildings in Finland
volume -index 2000 = 100
150
140
130
R&M of buildings
120
110 GDP
100
90
80
70
60
50
R&M growth is equal to GDP growth
=> Low growth possibilities in the next years
10. Pekka Pajakkala 31.1.2013 10
Grade for Finnish Buildings (stock) scale 4…10
Apartment buildings
Detached houses and holiday homes
Business premises
Public service buildings
Production facilities
Impact on Well-Being Impact on Competitiveness
• Housing and working conditions
• Health, safety and security
(space per person, …)
• Reachability and accessibility
• Adaptability, changes in intented use
• Energy efficiency and sustainability
• Functioning and dynamics of markets
• Comfort and social features
• Energy efficiency and sustainability
Impact on Sustainable Development ??
11. Pekka Pajakkala 31.1.2013 11
Grade for buildings 7½ => satisfactory
Why the direction is downwards
• The R&M inputs are not sufficient for repair and
upgrading needs of the stock
• Attitudes and way of thinking concerning sufficient
energy efficiency is changing all the time,
=>the energy efficiency-debt is bigger than was thought
5-10 years ago
12. Pekka Pajakkala 31.1.2013 12
Grade for Eco Efficiency of Finnish
Buildings
Knowledge Construction
Public coordination Maintenance
Market-driven development Use
FACT: Indicators and methods are not yet harmonized nor transparent.
CHALLENGE: Energy efficiency measures for refurbishment already 2015?
MEASURE: Indicators and methods needed also for residential areas,
not only for individual buildings.
13. Pekka Pajakkala 31.1.2013 13
Inadequate renovation increases refurbishment debt
Depreciation R&M output
Residential buildings Non-residential Civil Engineering
buildings Structures and
Transport Networks
Do we have right methods in calculating depreciation ?
What is the remaining lifetime of buildings and building parts/systems
14. Pekka Pajakkala 31.1.2013 14
The output of Finnish building construction by 5 year periods
Rakennuskannan kerrosala rakennusten valmistumisajankohdan mukaan,
- the building stockyhteensä 510 milj.m2 vuonna 2005
reaching 50 years age is increasing rapidly
60 000
Muut
50 000
Erilliset pientalot
40 000
Rivitalot
30 000
Teollisuus ja
varasto
20 000
Julkiset
10 000 Liike ja toimisto
0 Asuinkerrostalot
-1920
1921 - 1925
1926 - 1930
1931 - 1935
1936 - 1940
1941 - 1945
1946 - 1950
1951 - 1955
1956 - 1960
1961 - 1965
1966 - 1970
1971 - 1975
1976 - 1980
1981 - 1985
1986 - 1990
1991 - 1995
1996 - 2000
2001 - 2005
50 years
15. Pekka Pajakkala 31.1.2013 15
Consumption of heating energy in blocks of flats,
Finland kWh/m3/a
How big is the potential for demolition because of the poor energy efficiency ?
16. Pekka Pajakkala 31.1.2013 16
Renovation or demolition
New requirements for buildings mean more demolitions
17. Pekka Pajakkala 31.1.2013 17
Possible strategies to increase renovation business I
Source: Terttu Vainio, VTT
18. Pekka Pajakkala 31.1.2013 18
Possible strategies to increase renovation business II
Source: Terttu Vainio, VTT
19. Pekka Pajakkala 31.1.2013 19
Possible strategies to increase renovation business III
Source: Terttu Vainio, VTT
20. Pekka Pajakkala 31.1.2013 20
Volume index for turnover of Finnish Building Companies*
*with more than 10 employees
3x
R&M of Buildings
2x
New Building
22. Pekka Pajakkala 31.1.2013 22
New technologies in construction
Drivers
ICT
New Customer Demands
Green Solutions
Material Technology
Rising Costs; energy, raw materials
Construction Technologies
New procurement methods
BIM Information models
Visualisation, simulation
Industrialisation
Prefabrication
New building machines
re-use of materials, new materials,
23. Pekka Pajakkala 31.1.2013 23
Summary
1. Renovation business is stable and growing compared to new
building
(in Europe, in Nordic), the outlook for new building is poor
2. In Western Europe and Nordic countries the R&M market is bigger
than new building market
3. We have a poor statistics and information on R&M in all countries
4. The renovation market is potential for various actors
1. Traditional building contractors
2. Special contractors; HVAC, externall walls, windows, roofs, heat
pumps…
3. Newcomers, new actors from other industries
24. Pekka Pajakkala 31.1.2013 24
Summary II
4. The sustainable and energy efficient renovation is increasing its role
The big renovation tasks (HVAC, envelope,...) are very important
from this point
The weak economic situation means less input to sustainable
solutions
Tightening regulations, changing attitudes, energy policy, subsidies
and rise in energy prices are working for it
All choices have influence on sustainability, are we/people aware
of it
5. The growth in R&M business in based on both increase of R&M
market and share of commercial R&M