ME Consultant May 2017 New

For the construction specialist

Winning Formula Emad Jaber says that quality and efficiency play a part in LACASA’s ongoing success ON TOPIC

Building a healthy business through valuation services

IN PRACTICE

Value engineering - doing it correctly offers client value

ON SITE

Deploying lighting design to create the right atmosphere

ISSUE 037

May 2017 Publication licensed by Dubai Production City A product of Big Project Middle East

© 2017 LACASA Architects & Engineering Consultants All Rights Reserved

Design Director I’m Patrick Bean and I am a

www.lacasa.ae

I see design as a combination of both science and art, giving us the opportunity to creatively and efficiently enhance spaces. Since interior design has become one of LACASA’s main services, I have strived to be involved in the design process as early as possible allowing my team to influence both the interior and exterior of every project. I believe that by doing so, we as consultants, are able to achieve a functional and an aesthetically pleasing environment for our clients as well as the end users.

Patrick Bean

Design Director – Interior

LACASA is committed to providing quality-driven designs within a multidisciplinary environment.

Established in 2006, the firm has grown significantly over the past eleven years. Today, LACASA boasts a diverse portfolio encompassing all types of developments and across the entire MENA region.

While it is said that perfection doesn’t exist, we believe that perfecting design can be achieved by cultivating extraordinary talent.

CONTENTS

On topic IndustrY VIEWs frOM AcrOss thE MIddLE EAst

06

09

12

14

09 AnALYsIs

The first quarter of 2017 is behind us. Faithful+Gould’s David Clifton explains what transpired, and what’s on the horizon 14 IntErVIEW

We speak to Nigel Armstrong, Cavendish Maxwell’s CEO, about the valuations market, as well as opportunities and challenges

In practice AnALYsIs, InsIghts And IntErVIEWs

C

M

18 InsIght

Y

We talk to three specialists about the growing prominence of value engineering, and discuss how it’s being used in the region

CM

MY

CY

22 InsIght

Emad Jaber talks to us about LACASA’s laser focus on delivering quality work, market trends, inspiration and future expansion

CMY

18

22

28

32

37

40

On site cAsE studIEs, OpInIOns And snApshOts

28 On sItE

Desert Group CEO Michael Mascarenhas explains how his company is transforming landscaping and tackling sustainability 35 OpInIOn

Craig Gibson of Berkeley Research Group highlights seven methods used to quantify the financial effects of productivity loss 37 nEWs

RTA plans to expand its smart lighting technology project in Dubai 40 thE bAck pAgE

Consultants can deliver superior projects by paying close attention to five simple design factors, says Grayscale Interiors’ Dr Gary Vastag 2 MAY 2017

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Group EDITOR’S NOTE

Success Stories I’m just going to come out and say it: sometimes having 24/7 access to the internet can be depressing. Business sites I frequent seem to perpetually say that certain sectors, industries and stocks are down in the dumps, on Facebook people are sharing links about how we’re on the brink of some catastrophe or another, and on email, well, there’s always someone from Africa offering me a ton of money because a relative or spouse passed on. Okay, that last one is more humorous than depressing, but I’m sure you get the idea.

This month, thankfully, I had something to counter all the doom and gloom – regional success stories. Cavendish Maxwell is a home-grown organisation that started off in life as a property consultancy. It was founded during the 2008 financial crisis, and has flourished, and become one of the largest and best-known valuation-services companies in the region. You can read all about it on page 14.

Talking to Emad Jaber, managing partner of LACASA, further raised my spirits. LACASA is also a homegrown brand, and although the architectural and engineering firm experienced a rough patch shortly after it was set up, it was able to adapt and is now thriving within the UAE, and beyond. Check out the full feature on this now 11-year-old enterprise on page 22.

They say good things come in threes, and indeed LACASA isn’t the last regional success story in this issue. The Desert Group is another son of Dubai, and although it faced an uncertain future as recently as five years ago, the company is now as solid as an oak tree. I chatted with Desert Group CEO Michael Mascarenhas to find out about the group’s new design consultancy business, sustainability and much more on page 28.

Another success story, closer to home, comes from this magazine’s sister concern, Big Project Middle East. On April 26, the team did a sterling job with the Smart Infrastructure Summit 2017; it was well attended, packed with content and brilliantly organised. A job well done indeed.

PUBLISHING DIRECTOR RAZ ISLAM raz.islam@cpimediagroup.com +971 4 375 5471 EDITORIAL DIRECTOR VIJAYA CHERIAN vijaya.cherian@cpimediagroup.com +971 4 375 5713

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Jason Saundalkar Editor, Middle East Consultant 4 MAY 2017

© Copyright 2017 CPI. All rights reserved. while the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

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ON TOPIC

MOST POPULAR

FEATURED

READERS’ COMMENTS

ETERNAL HyPERLOOP OPTIMISM

CONSTRUCTION

Abu Dhabi: Aldar awards $136m Mayan contract

CONSTRUCTION

Nakheel awards contract for $1.7bn Deira Mall

In pictures: Big Project ME Contractors’ Cup – awards

Clearly lots of hype around Hyperloop One (Hyperloop One ‘wellpositioned’ to deliver first working system, March 10).

Let’s remember that this start-up has already raised $160 million from leading US venture capital investors. The city of Los Angeles is host to four Hyperloop start-ups, which all still require significant additional investments. I’m an eternal optimist!

‘EuroSven’, online comment

CONSTRUCTION

Qatar ‘cuts 2022 World Cup budget by 50%’ EMISSION OMISSION

CONSTRUCTION

Firefighters tackle blaze at Dubai construction site

FEATURES

Project profile: The Sustainable City, Dubai

6 MAY 2017

Video: 100 years of Caterpillar history – in colour

Interesting article (Thermo King launches zeroemission refrigeration unit, April 12). However, this unit is ultimately still powered by a diesel engine (the van’s engine in this case) so is it really zero-emission? Where does the vehicle battery’s electricity originate from?

One could think that the batteries will be charged at night, but the vehicle’s batteries can’t hold enough energy for a day’s worth of refrigeration.

‘Etienne’, online comment

DUBAI

ABU DHABI

HONGKONG

BANGKOK

SINGAPORE

SHANGHAI

BEIJING

HANOI

ON TOPIC

ANALYSIS

The Road Ahead David Clifton, regional development director at Faithful+Gould, explains what happened in the UAE’s construction industry in Q1 of 2017, and highlights likely scenarios in the coming months

O

il is starting to stabilise in the $50-55/barrel range, and most analysts expect a further increase to c.$60/barrel.

This is underpinning federal level confidence in budget forecasts. With significant local and overseas reserves as well as prudent budget allocations, the UAE’s fiscal position remains positive.

Overseas real estate investment went down 41% from 2015 to 2016, which means sale prices have been under sustained pressure.

This is partly due to the strong dollar (which the UAE dirham is pegged to), which has led to numerous schemes being slowed. 2017 is beginning to see a small increase in investments, which will start to drive growth, especially when combined with new funding streams coming to market.

Q1 of 2017 has been poor in terms of contracting awards in the UAE and the wider GCC, with some of the lowest volumes on record.

However, the pipeline and sentiment in general is more positive. With Dubai committed to $3bn of awards for the Expo 2020 site, and the private sector likely to take a positive view on this, Q2 should see improvements. The danger of delays to contract awards is compounded by the approach of Ramadan and the summer months of traditionally low activity. This could see Faithful+Gould’s $45bn forecast of awards for the year compressed into Q3 and Q4, constraining construction capacity and possibly delaying some schemes.

With the commencement of Brexit, we have already seen visits of senior UK ministers to the GCC, seeking new trading opportunities.

We expect to see the availability and promotion of Export Credit MAY 2017 9

ON TOPIC

“A significant number of smaller and mid-sized schemes will move ahead this year to meet Faithful+Gould’s $45bn award forecast. This means 2018/2019 is a more likely roll-out date” Agency funding, certainly from the UK but also from some of the larger EU member states, as they look to diversify their economies’ exposure, and promote wider Gulf engagement. This is especially true of the UK. Subsequently, numerous government and private sector developers should see funding options that combine to increase liquidity overall.

Although Q1 hasn’t seen the number of tenders that the end of 2016 saw, we expect awards to continue to increase in the near future. The construction industry has already resized and may have to undergo further scaling if these awards are delayed. This is not expected to be the case, with recent government announcements and commitments.

A significant number of smaller and mid-sized schemes will move ahead this year to meet Faithful+Gould’s $45bn award forecast, as regional appetite for mega infrastructure struggles to gain traction in government budgets. This means 2018/2019 is a more likely roll-out date.

While tender prices have been under pressure due to a lack of

work and falling backlogs, inflation is building in the system. Looking at iron ore, we’ve seen an increase from $47 per tonne in June 2016 to $80 today. This will take three to six months to feed into the supply chain, but certain materials will feel price increases accordingly.

A further potential impact is China’s declaration that it is looking to rein in industrial production to move its economy towards becoming more services-driven. Unless other developing nations can pick up the supply side, further pressure could be added to inflation for products and materials consumed in the UAE construction market.

As we start to see more details around the implementation of VAT, organisations will start the roll-out of the required staff, training, processes and systems required to invoice, collect and pay the tax. There is concern over cashflow issues once VAT is implemented, due to expenditure in the industry normally preceding revenue, especially when combined with the fact that VAT payments and refunds won’t necessarily match client and supplier payment terms. This will require significant mitigation planning.

Notwithstanding, Faithful+Gould’s construction inflation forecasts remain unchanged from the previous quarter.

GDP, $ Billions (2007-2017)

Average Rebar Price, AED/Tonne (2015-2016)

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ON TOPIC

ANALYSIS

Real Estate Report What grew, what was flat, what declined? Consulting firm ValuStrat reports on what transpired in Dubai’s residential, office and industrial real estate sectors in the Q1 of 2017

T

he first quarter Residential ValuStrat Price Index (VPI) for 2017 displayed an overall 0.7% annual decline in value. Monthly capital appreciation of between 0.7% and 5.2% was witnessed in Downtown Dubai (excluding Burj Khalifa), Jumeirah Village villas, Arabian Ranches, Jumeirah Park, International City, Media Production City (IMPZ), Discovery Gardens and Remraam. Capital declines of 0.6% to 2.5% were seen in Jumeirah Village apartments, Dubai Marina, Jumeirah Lake Towers, Palm Jumeirah apartments, Burj Khalifa, Jumeirah Islands, the Meadows and the Al Furjan villas.

Residential investment yields have also compressed by four basis points, as median asking rents were 12.6% lower than in Q1 2016, and 7.9% lower than in Q4 2016. The highest net yields were registered in 12 MAY 2017

Dubai Sports City, Remraam and Media Production City (IMPZ) at 7.1%, 6.9% and 6.7% respectively.

This year’s total new supply of residential apartments and villas is estimated at 25,000 units; however, this number will likely be subject to a significant downward adjustment. More than 50% of the expected supply is focused in four locations: Dubai Land (19%), Dubai Silicon Oasis (17%), International City (8%) and Dubai Sports City (7.5%).

Office Watch

2017 began with an estimated 8.47 million sqm (91 million sqft) of office Gross Leasable Area (GLA), and more than 164,000sqm (1.77 million sqft) of GLA is estimated to be delivered in 2017. An additional 111,000 sqm (1.2 million sqft) is expected to be delivered in 2018.

ON TOPIC

ValuStrat Price index: Freehold apartment performance, March 2017

Monthly growth

% Difference from peak 2014

5%

0%

-5%

-10%

-15%

Two thirds of last year’s office projects were delayed, and are to be completed during the next 24 months. Upcoming office stock currently under construction totals 276,000sqm (three million sqft) GLA, 71.5% of which will be in Business Bay, 26% in Jumeirah Lake Towers and 2.5% in Dubai Silicon Oasis.

Overall transacted office prices rose by 3.8% y-o-y, and transacted sale prices were up 2.4% q-o-q. Median transacted prices for office space this quarter stood at $3,080 per sqm ($286 per sqft). 38.5% of total office space sold was in Business Bay, followed by Jumeirah Lake Towers at 24.7% and 9.8% in Barsha Heights. Other locations included Dubai Healthcare City, Trade Centre Second and Port Saeed.

Sizes of 46-139sqm (500-1,500sqft) represented 65% of all office space sold during Q1.

“This year’s total new supply of residential apartments and villas is estimated at 25,000 units; however, this number will likely be subject to a significant downward adjustment”

JLT

Dubai Sports City

Palm Jumeirah

Downtown Dubai

Business Bay

JBR

Dubai Marina

Burj Khalifa

The Views

Jumeirah Village

The Greens

Remraam

Discovery Gardens

International City

IMPZ

-25%

Motor City

-20%

Meanwhile, the median asking rents for office space fell 9.2% y-o-y; however, they have remained stable for the last three quarters. Overall asking rents this quarter were 11.1% lower than in the same period two years ago, and the median asking rent for office space was $293 ($27 per sqft). Downtown Dubai saw one of the highest asking rents of $1,026 per sqm ($95 per sqft) for an office area of 51sqm (549sqft).

Industry Watch

The first Global Manufacturing and Industrialisation Summit was held in the UAE, as part of the country’s plan to be a pioneer of the fourth industrial revolution era. The manufacturing sector constituted 9.9% of total Dubai GDP in the first nine months of 2016, valued at more than $7.6bn.

86% of total industrial investment, amounting to $30.4bn, was sourced from UAE nationals. GE Aviation plans to set up a maintenance, repair and overhaul facility at Dubai South’s Aviation District as part of Dubai’s industrial strategy, and Dulsco has started construction of a 46,451sqm (500,000sqft) recycling facility at Dubai Industrial Park.

Industrial property prices remained relatively static during Q1 of this year, following on from declines witnessed in Q3 and Q4 of 2016. Dubai faces increased competition from modern industrial parks in emirates such as Sharjah, Ajman, Umm Al Quwain and Ras Al Khaimah. The asking prices for standard and older warehouse properties is at slightly under $586 per sqm ($54 per sqft), and average rental rates have remained relatively stable in locations such as Al Quoz, DIP, JAFZA and Jebel Ali. Lower rents continue to be observed in locations such as Ras Al Khor and Al Quasis.

MAY 2017 13

IN PRACTICE

INTERVIEW

Exciting Opportunities Cavendish Maxwell created a CEO position for the first time last year, appointing Nigel Armstrong to the role. Who is he? What changes has he made, and what opportunities and challenges does he see for his firm?

Middle East Consultant investigates... avendish Maxwell comprises chartered surveyors and property consultants, and offers property-related services throughout the Middle East and Africa. The firm was established in the UAE in 2008 by Jay Grant, and although it was set up at a time when the country, and indeed the world, was sailing through stormy waters, the firm grew into a regional powerhouse.

Last year, the company valued more than $23bn of commercial real estate and nearly $3bn of residential real estate, and it now employs 60 people across eight departments. In July 2016, the company created a CEO role for the first time, appointing Nigel Armstrong to the position. What’s interesting about this appointment is that Armstrong had no prior Middle East experience.

“I was not familiar with the Middle East market in the slightest.

Jay Grant approached me while I was in the UK, and said we should have a coffee and chat. He had read about me, and when we hooked up, we talked about where his business was in that moment in time, and ultimately where he wanted to take it,” says Armstrong.

Although Armstrong, a qualified accountant by profession who trained and qualified at Pannell Kerr Forster (now PKF), had no prior Middle East experience, he was no stranger to managing big business – a large portion of his career was spent as CEO of the Bannatyne Group. “I’ve been very fortunate that I’ve worked with some very successful entrepreneurs over the years, and that culminated in 1996 when I got together with the Bannatyne Group; we built, acquired and grew a whole host of different businesses.”

14 MAY 2017

Under his stewardship, the Bannatyne Group enjoyed turnover of $128m in 2013. Considering his success in the UK, it’s fair to ask what attracted Armstrong to Cavendish Maxwell last year, given the tepid market conditions in the Middle East.

Armstrong responds: “Regardless of the territory, Jay’s desire was to take the business and grow it. Jay is young enough and hungry enough to do that, and that’s where my skill set has traditionally been; I very much scale businesses upwards, so the fit was perfect.”

Keeping it Simple

Armstrong is now nearly a year into his role at Cavendish Maxwell, and although he is focused on sustainable growth and expansion into other markets, the Newcastle United fan prefers to keep things simple and focus on his company’s core.

“My philosophy on business is to keep it simple. I don’t think business should be made complicated – if you start making it complicated, you won’t enjoy it. Secondly, it’s essential that we ensure that the core platform is correct, and as strong as possible. Therefore, with regards to the structure of the business, it was a case of looking at the core, the key individuals, the key departments, and making sure that those were as strong as possible for future growth. This is what we’ve been doing for probably the last six months of last year,” he says.

“The one thing that I really wanted to try and instil in the team was accountability and responsibility. We’ve got a great team who are very loyal, which is a credit to Jay. We’ve also tried to keep the business’ human side very strong, so this is not a faceless corporation. So we’ve got great staff, but I wanted to freshen it up, bring that accountability, remind them of the responsibilities to go out there and offer good customer service and drive the business forward, which is what we’ve been doing.”

IN PRACTICE

“Regardless of the territory, Jay’s desire was to take the business and grow it. Jay is young enough and hungry enough to do that, and that’s where my skill set has traditionally been; I very much scale businesses upwards, so the fit was perfect” MAY 2017 15

IN PRACTICE 01 The firm’s machinery and business assets valuation can be undertaken for mortgage security, machinery audits, business mergers and acquisitions.

02 Cavendish Maxwell says it has one of the largest residential valuation teams in the region.

01

2016 was a challenging year for many consultants in the industry, but Cavendish Maxwell defied the odds and closed the year on a high.

“We had a very strong close to 2016, and we’re very satisfied with the results; there was good growth on the previous year, which is something we are very pleased with. Going forward, we are expecting traction to come throughout this year, and onwards into 2018 and 2019. We’ll be looking to double our financial performance over the next couple of years,” says Armstrong confidently.

One reason Cavendish Maxwell performed as well as it did in 2016 was its strong performance in residential valuations. The company is on over 35 bank panels in the UAE alone, and has highly recognised credentials. The firm’s commercial department is also growing steadily, and with the addition of other service lines to its business, growth has been good.

“We’ve opened two new offices, one in Abu Dhabi, and we’re very excited to be opening an office in Oman, which is a new area for us. We believe that Oman is going to have an influx in hospitality and in tourism, so we’re excited about that” 16 MAY 2017

The consultancy has also invested in data through its Property Monitor product, a regional data platform which the company is keen to use to enhance transparency on indices, valuations and yields. The firm hopes the data will be of benefit to regional government bodies, banks, developers and end consumers.

Gearing up for Growth

Growth is obviously a topic that’s always on Armstrong’s mind, and he is convinced that public awareness of regional realities will create new opportunities. Fire safety is one of several opportunities he is keen on pursuing going forward.

“Recent fires in the country have made it possible for us to say, ‘Let’s look at the fire assessments, let’s look at the cladding, let’s look at the insurance policies that people have and let’s make sure the sums insured are correct.’ I think when you also look at the fact that there has been a decline in oil prices, there’s now also a need for greater economic diversity. So whether that’s going to be more leisure, hospitality, construction – these are all great opportunities that will come our way.”

While Armstrong is bullish about opportunities within the UAE and the wider region, he agrees that new opportunities also create new challenges. Hailing from the UK, he has also noticed some stark contrasts between the two markets.

“There are, as we discussed earlier, many opportunities, but the market here is also quite unsophisticated, and I think that the opportunities create their own challenges. I think the biggest challenge is that as legislation naturally comes forward, thought has to go into how that legislation is communicated. Decision-makers have to think ahead and consider what the ramifications of that legislation will be, and consider how companies can adapt and implement changes in any consultation processes.”

The father of three also points to the introduction of VAT in 2018 as a challenge that businesses will have to tackle. “You have to ask questions like – what are the implications of VAT? What disruption is that going to cause to companies, and a whole host of industries?

You also have to consider what software is going to be available to help firms deal with VAT, and what’s going on with the overall rules and limits. It’s not something that can just be thrown together overnight.”

IN PRACTICE

“Going forward, we are expecting traction to come throughout this year, and onwards into 2018 and 2019. We’ll be looking to double our financial performance over the next couple of years” Armstrong is confident about his company’s future prospects, but admits he isn’t one to stick to plans. “I don’t believe in setting up very rigid business plans, because you don’t know what’s around the corner.

I want to try and remain quite fluid, but the plan over the next two years is to enhance the service lines that we’ve got. We still believe that there is organic growth in the UAE, and there’s still a lot of opportunity.”

The company has already taken its first steps in terms of expansion.

“We’ve opened two new offices, one in Abu Dhabi, and we’re very excited to be opening an office in Oman, which is a new area for us.

We believe that Oman is going to have an influx in hospitality and in tourism, so we’re excited about that. We’ve recruited a great head for Oman, and over the next two years it’s going to be continuing that development. Whether that takes us into different territories, I’m not going to say exactly, but certainly the plan is throughout the GCC.”

Commenting on his firm’s performance in the near future, Armstrong is supremely confident. “Cavendish Maxwell will continue to grow strongly on the residential market. We are probably the largest residential valuer in the UAE, and we’ll maintain that foothold. We are also seeing an increase in commercial valuation work, and we have a broader approach to that, so that will continue to be one of our core service lines in the future, coupled with additional service lines and areas of expertise.”

Summarising his management philosophy and the time he has already spent at Cavendish Maxwell, Armstrong concludes: “I just enjoy life. I enjoy waking up in the morning and getting out of bed and being hungry for work. And if I can see results, whether it’s financial or my staff being motivated and satisfied – that’s what excites me and gives me the buzz.”

02

MAY 2017 17

IN PRACTICE

INsIghT

Valuable Proposition Value engineering is growing in prominence in the region – but is it being used as intended, and at the right time in the project cycle? Middle East Consultant explores alue engineering (VE) is an important concept within the industry, and at the same time it is also vilified by some in the construction chain. The definition of VE differs slightly depending on who you speak to but, in a nutshell, it is about satisfying customer requirements with a focus on efficiency. That could mean anything from optimising processes, to shortening job times, to something as simple as using the right solution for the job at hand.

Stephen Clough, technical director – Electrical at Black & White Engineering, explains, “It is not about reducing the specification of equipment or removing provision of services to reduce costs, but rather, it is the process of applying appropriate diversities to reduce unnecessary plant and infrastructure, or find innovative or collaborative methodology which will enhance efficiencies. For us, value engineering is about reducing the cost of the building over its lifetime, and ultimately its effect on the environment.”

Gregg Welch, senior vice president at Parsons, adds, “VE is a creative, holistic review process involving subject matter experts whose objective is to improve the long-term value of an asset. This can be accomplished by eliminating unnecessary capital and operating costs, reducing the construction schedule, optimising execution approaches and improving asset efficiencies. Trade-offs concerning lifecycle costs, time to operation, sustainability and resiliency, health, safety and community impact are important components of the process.”

So, value engineering is very much about efficiently completing projects; however, in recent times the term has come to represent a form of cost-cutting, which is not at all what it originally represented.

“I have definitely observed that the concept has ‘evolved’, and unfortunately it’s not for the better. When VE was first introduced into construction (from its inception in manufacturing), it was implemented in the true sense of the word. However, over time it has unfortunately 18 MAY 2017

often been used as a cost-cutting exercise, which sacrifices quality.

Therefore, it has resulted in reducing ‘value’ by sacrificing function for cost,” comments Saeed Al Abbar, director at AESG. Making an Impact

Considering the challenging economic conditions and constrained budgets for projects in the Middle East, value engineering, if used as intended, can make all the difference to a project, and to a client’s bottomline. Regional players are well aware of this fact; Welch points out that awareness about value engineering in the Middle East is widespread.

“Value engineering is reaching greater prominence due to drivers such as economic and budgetary pressures, sustainability requirements, higher utility costs, and the evolution of smart infrastructure and smart city technologies. For example, in Dubai owners are becoming more sophisticated with respect to the trends toward intelligent systems and a greater risk of obsolescence for their assets. A properly executed value engineering study can help them avoid unnecessary costs, guard against obsolescence and increase the long-term value of their investment.”

Value engineering obviously has its place in the market. However, like many other processes, it is only effective if executed properly.

Incorrect application of value engineering can offer meagre benefits or, worse, negatively impact a project and reduce its long-term value.

“We have seen projects where the testing or commissioning management has been ‘value engineered’ out of scope. This has provided an instantaneous cost saving but resulted in the building not functioning as intended. The building owner (or contractor if they are still under defects liability) then ends up paying multiples of the initial saving to resolve the issue,” warns Abbar.

There’s no denying that a properly executed VE process can generate results, but for it to be most effective, the process should be carried out at an early stage in the project. This enables the client/developer to enjoy cost savings without the costs associated with making changes at a later stage. As an example of what can happen when VE is implemented too late, a contractor may already be locked into deals with suppliers,

IN PRACTICE

“Value engineering implemented at the planning stage gives the client 100% of the savings, but if it is implemented at the detailed design or tender design stages, the client may only experience 65-85% and 30-60% of savings respectively�

MAY 2017 19

IN PRACTICE 01 saeed Al Abbar, director, AEsg. 02

and may be unwilling or even unable to make changes without adversely affecting the project.

“The best time to do VE is at the planning/concept stage, to ensure rightsized systems with safe plant space and riser space is allowed for. This results 01 in greater building efficiency with reductions in OPEX, as systems operate more efficiently. Value engineering implemented at the planning stage gives the client 100% of the savings, but if it is implemented at the detailed design or tender design stages, the client may only experience 65-85% and 30-60% of savings respectively,” explains Clough.

Time is one factor; Welch reckons the effectiveness of a value engineering study can be enhanced by fine tuning the team working on the exercise.

“The ideal approach utilises a 02 panel of subject matter experts who are independent from those immediately involved with design and construction of the project. The process is further optimised when the reviewers are selected from multiple backgrounds including operations, maintenance, construction, design, oversight agencies, quantity survey and project planning. The collective experience of the independent reviewers will identify and remove excess from the design, and establish the most efficient construction means. The process can also identify gaps or items missing from 03 the design, critical to ensuring the asset meets its functional requirements.”

Thanks to weather conditions across the Middle East, value engineering can also tangibly reduce a project’s effect on the environment. Abbar comments: “When you look at the façade of a building from a systems-thinking perspective, you can look at improving the insulation of the façade. This would add additional cost to the façade; however, the improved insulation would mean that a lower capacity air conditioning system could be used, which in turn means less load on the electrical infrastructure (which also makes the building more environmentally friendly). So, by applying systems thinking, we have increased the cost of the façade element but created a capital cost saving 20 MAY 2017

stephen Clough, technical director – Electrical, Black & White Engineering.

03 gregg Welch, senior vice president, Parsons.

far exceeding that on the MEP side.

Furthermore, the value of the building is increased as it is now more energy efficient.”

Top Trends

The value engineering process has been influenced in recent times by new technology that has been embraced by the global, as well as regional, construction industry. Welch explains, “Recently, technology has been influencing the VE process, namely building information modelling (BIM) and 3D design software. These tools lend themselves to an efficient review of design alternatives, sustainable approaches, energy efficiency, maintainability and constructability issues. We now see that the industry in the region is moving to a more sophisticated means of adding value to assets through value engineering.”

Abbar agrees with Welch’s assessment. “The current trend globally, in this and other sectors, is to apply advanced computational and software techniques to value engineering. We are starting to see this in the GCC countries as well. At AESG, we often apply BIM techniques and energy simulation in order to provide various approaches to a building design, so that the most optimum value proposition can be output.”

Clough, however, believes that while there is no shortage of technology for those in the industry, there is still a gap with regards to products tuned for the region.

“Western technologies are being introduced in the regional markets quicker than in previous years. However, there remains a lack of products and, crucially, research and development for the GCC climate specifically.”

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IN PRACTICE

INTERVIEW

Purveyors of Quality Jason Saundalkar talks to Emad Jaber, managing partner of LACASA, about the first 11 years of his firm, regional expansion, market trends, inspiration and the next 10 years ACASA is an architectural and engineering firm founded in Dubai over a decade ago. In Spanish, ‘la casa’ means ‘the house’, and while that may imply that the consultancy only works on housing developments, LACASA has experience with villas, towers, hotels, furnished apartments and even shopping malls.The multidisciplinary firm offers services including project management, structural design, interior design, architectural design, MEP design and supervision of projects, through its team of quantity surveyors.

“Our business focus is on architecture, structure, mechanical and interior, that’s in-house with the main office in Dubai, and a big branch in Qatar. We serve the Gulf and MENA region, and everything is done from Dubai as the main office. All the design is done here, along with pre-contract, post-contract, and design and supervision,” explains Emad Jaber, managing partner of LACASA. Since its inception, LACASA has made a name for itself thanks to its quality-driven approach. Today, the firm handles individual projects worth more than $1.2bn, and in Dubai – as developers focus on hospitality – 70% of its projects are hotels and furnished apartments.

Jaber says, “We are well-known and reputed for the quality management of projects, and we work with a wide range of developers.

All of them are repeat clients, and this is what makes us happy – we’ve done four or five projects with each, and in some cases as many as 14 projects with the same developer.”

As a result of depressed oil prices and unrest within certain countries in the Middle East, market conditions and sentiments in the construction and property sector are tepid at best. LACASA, however, has a very positive outlook, backed by a healthy pipeline of projects.

“People don’t believe what I tell them sometimes, when I say we are busy and doing well. They believe this is the talk of a businessman. No, the market is good, but it is only good for good companies. LACASA is 22 MAY 2017

not the only consultancy that is busy in this market, there are other good companies who are busy as well. We feel that the real estate market in Dubai is strong, and there is a demand. Developers who know how to react to the requirements of end users, they are successful, and we can see that our developers are responding to new requirements,” comments Jaber confidently.

Jaber highlights that the market has changed in the last few years, with a focus on end users. “Now developers are focusing on cost-effective units for actual end users. The reseller market is not there anymore. I can see it even within our office; some of the senior management have become end users, and this is what makes the market sustainable. Now, you have real end users who are not just looking for investment or to flip and make quick money.”

“People don’t believe what I tell them sometimes, when I say we are busy and doing well. They believe this is the talk of a businessman. No, the market is good, but it is only good for good companies.

We feel that the real estate market in Dubai is strong, and there is a demand”

IN PRACTICE

MAY 2017 23

IN PRACTICE

As an indication of the health of the sector, Jaber tells Middle East Consultant that his firm has won and started work on several projects recently. “Since January 2017, we’ve started work on 18 projects. Since this is all in the first quarter, I think it is a very good indication of how 2017 will be. In 2016, we signed 36 projects and appointed exactly 96 engineers, so this is the growth that we’ve seen recently.”

LACASA is proud of its achievements, with quality at the centre of everything it does. “All our projects are like our babies,” says Jaber. The firm is working on numerous projects, including the $54m Art Centre Mall in Al Barsha, Dubai. “We are working on some very special projects, and one of them is the new Art Centre. We are proud of the design, as it is a unique concept for a shopping centre. It is focused on interior 01 and furniture, and the design of it reflects the usage.”

Another example Jabber highlights as an example of his firm’s prowess is on Dubai’s Sheikh Zayed Road. “We are working on a 75-storey building on Sheikh Zayed Road; that is the highest tower that we’ve designed at LACASA. The challenge with that is the plot is very small, and to make it work with the parking, that required special attention. Our architects were up to the challenge, and even the municipality was surprised that such a plot can work.”

Beyond Dubai

LACASA, like many other firms, was affected by the global financial crisis, and the resulting construction slowdown in the latter half of the 2000s. At that point in its history, the company was focused primarily on

Dubai. Jaber recalls: “We were against going outside of Dubai, because we were busy, and we would not be able to serve our clients if we started work elsewhere. When the financial crisis happened, we were hit badly because we didn’t have diversity. After that, we decided to expand in case the pipeline of work in Dubai was not sufficient.”

Having weathered the construction slowdown, the company identified Qatar, Saudi Arabia, Syria, Sudan, Libya and Tunisia as countries of interest, and expanded into those markets. “These countries gave us a healthy amount of work, which bridged the gap between the good times and the tough times in Dubai. Our strategy was long-term for these markets, we were focusing on having a sustainable business

02

01 Atlantis staff accommodation in Jumeirah Village, Dubai.

02 The View Residences in Qutaifiya, Doha.

03 Mixed-use development Um Nahad First, Dubai.

04 The Novotel Hotel in Downtown Dubai.

05 Mimosa Residence in Jumeirah Village, Dubai.

24 MAY 2017

IN PRACTICE

“We should have an efficient building, we should have a functional building, and that building should make money. Architects don’t focus on this, they focus on the form, the spaces, making it iconic – these are their priorities, whereas cost, time, durability, efficiency are a second concern. As a civil engineer, I want both!” within these countries. Unfortunately, with Syria, Libya and Sudan, it didn’t work out because of the revolutions, so we had to close our offices there,” explains Jaber.

LACASA did, however, find success in Qatar. “Qatar was one of the successful markets for us, and we continue to focus on it. I think we are successful there because it’s similar to Dubai in terms of regulations, people and clients. We’ve invested a lot in Qatar with regards to the premises, the facilities, the engineers, and now we are one of the biggest consultants there, with 80 people handling more than 32 projects,” Jaber notes.

Perhaps more importantly, repeat business is common for LACASA in Qatar. The company has worked on more than nine projects with the Al Khayyat Group, and eight developments with Sharaka Holdings.

Jaber also points out that his firm also works with developers who aren’t actually based in Qatar but have projects there. “We work with some developers who are in Dubai and have jobs in Qatar; they want

a consultant from Dubai. We are doing this for a tower with ENI, and for DAMAC. So overall Qatar is a good market for us; we have a fullfledged office there, and we can do designs there with the support of the Dubai office.”

Trends and Inspiration

As a veteran of the construction sector and a private investor, Jaber sees one troubling trend on the rise, driven by developers looking to attract end users. “I’m an investor on a small scale in Dubai and Palestine, and I believe that you don’t go with the trend just to attract the end users. In the end, they will opt for a product that they want.

Now, unfortunately, developers are reducing the size of the apartments, and they are attracting end users and investors by the total amount of property. In the long run, these people will be surprised by the size of the apartment they receive.”

03

MAY 2017 25

IN PRACTICE

04

05

It’s a trend he and his firm are trying to push back against. “If a developer asks my opinion, I always tell them to have a reasonably sized apartment, so that if the owners want to stay in it or even rent it, they will be satisfied or can easily find tenants. Now we are within a very dynamic market; there is demand in Dubai today, and people can sell and rent their property. In a few years, when the supply is more than the demand, people will start to be selective.”

Jaber is a civil engineer by profession, and notes that his experience in the field, combined with his staff’s expertise, are what make a winning formula for LACASA’s clients. In fact, efficiency is something that inspires him on a professional level.

“I’m a civil engineer, I’m not an architect. I manage architects, and that’s beneficial to the client. Civil engineers are mathematical people – one plus one equals two, and for me architecture starts from that formula. We should have an efficient building, we should have a functional building, and that building should make money. Architects don’t focus on this, they focus on the form, the spaces, making it iconic – these are their priorities, whereas cost, time, durability, efficiency are a second concern. As a civil engineer, I want both!”

The Road Ahead

Looking ahead, Jaber has a clear goal in mind for LACASA as part of a 26 MAY 2017

detailed 10-year plan. “Right now, 70% of the volume of work is coming from Dubai, and 30% is from outside. Maybe 25% is from Qatar, while the other 5% is from elsewhere. We see that things will continue the same until 2020, not because of the Expo, but because in the next three years, the infrastructure of Dubai will be almost complete.”

Post-2020, Jaber expects things to change. “Right now we are focused on hospitality; after 2020, we will focus on specialised buildings, and we are preparing ourselves to be experts. After 2020/2021, I think we will have 70% of the work coming from outside of Dubai, and 30% coming from Dubai. We will continue to have our head office in Dubai, as we believe that the UAE will be serving neighbouring countries within the region, because it has the expertise and it has the infrastructure.”

Jaber also plans to take his firm back into the countries LACASA started working in prior to the Arab Spring. “We will be reactivating our offices once things get better, hopefully in four or five years, and there will be reconstruction in those countries. We in Dubai – and when I say we, I don’t just mean LACASA, I mean the other consultants, contractors and developers – are the only qualified people to lead the reconstruction of these countries. So by 2025, we will still have our main office in Dubai; however, only 20% of the volume of work will be in Dubai – 80% will come from outside,” he concludes.

ON SITE

01

INSIGhT

Green Transformation Middle East Consultant talks to the king of green, Desert Group CEO Michael Mascarenhas, about how his company is transforming landscaping within the region and beyond 28 MAY 2017

ON SITE

ichael Mascarenhas joined the Desert Group back in 2012, while the company was going through a dry spell. Five years on, the firm – which offers design, landscaping, maintenance and other horticultural and lifestyle related services and solutions – is on much stronger footing.

Talk to us about your design consultancy business, Desert Ink.

In urban, hospitality and residential development, a new thinking must evolve, fostered around ecosystems. Desert Ink fills that gap. When planning, it’s critical that organisations such as ours are involved to create originality using what this region offers. The idea is to lead the way and to bring to this region services that seamlessly flow around the principles of culture, conservation and inclusiveness. Why not amplify what this region has to offer?

Landscaping is becoming an increasingly important element in the UAE, as well as the rest of the world. What’s driving this?

Landscaping has been around much longer in the Middle East than in many Western countries. The development of the Islamic gardens has been an inspiration to garden designers around the world. Now there is a young, well-educated, well-travelled and growing population that feels the need to have external experiences that satisfiy the senses, to see, smell and touch greenery.

Governments are also investing in infrastructure such as recycled water systems and social infrastructure such as parks, gardens and urban greenery. The strategic location of the UAE, as a tourist destination for leisure, has been acting as one of the main drivers to the demand for high-quality ecosystems, landscaping being part of it.

Landscaping is an art form. Is that also driving this market?

There is strong awareness that the use of plants in landscaping can be a creative art form. It allows the transformation of an essentially blank canvas into a distinctly unique and rich environment in which the true joys of nature can be appreciated, celebrated and simply absorbed.

Promoting the role of plants in the creation of environmentally and socially sustainable communities and projects has been central to Desert Group’s raison d’etre. This has been achieved through the introduction of some 600-odd new species of plants that had not previously been used in landscaping in the UAE/GCC. This has helped create excitement for designers who have been given far more creative options than have existed in the past, enabling them to differentiate their projects using new plant species that can help provide a unique look to their landscaped areas.

The introduction of this new palette of plants has been good for the environment, good for society, public health and good for the economy.

There’s a lot of talk about being green and sustainability.

What’s your view on where we actually are as a region?

I agree that there is a lot of talk about sustainability and being green.

The leaders in the region are aware of the need to move towards a sustainable and greener solution, to the ongoing rush of construction projects. They’re promoting the need to develop locally relevant design solutions, which are compatible with the local, social and environmental conditions, and the need to integrate ongoing developments.

As a region, we are probably five years behind some of the other countries around the world, but as we have seen on so many occasions, we can catch up fast. I’m sure we will be on par with other countries within a few years. how does the Desert Group tackle sustainability on landscaping projects, considering the harsh climate?

We recently launched new business segments around soil and water, specifically introducing eco-friendly non-toxic materials and ecosystems, whose prime focus is to change how we do landscaping in the region. We are the first to launch a business that provides learning, solutions and management expertise to develop a landscape vernacular, which responds far more sympathetically to site conditions, climate and available resources, as people become more aware of the benefits of using native and indigenous material.

The Desert Group runs nurseries in the UAE. What are the challenges when the climate is hot and arid, and is it possible to run nurseries sustainably?

The challenge of running a nursery in our climate is about developing a list of plants that have stress tolerance as their primary strategy, which then allows them to adapt and endure our rather harsh summers. This means that the best plants are ones that can reduce active growth during unfavourable conditions, but can respond quickly when conditions become suitable.

“We want to lead and create super synergy platforms that create new avenues of vertical and horizontal combinations that drive value. These new business areas will contribute nearly 50% of the revenue in the next five years” MAY 2017 29

ON SITE

01 The Bab Al Shams Desert Resort & Spa opened in November 2004.

02 Michael Mascarenhas,

We are always trialling plants from around the world for these characteristics, while at the same time growing a wide range of locally native species for which we are assured of success. Sustainable plant nurseries are those where the use of recycling, composting, natural mulches and the 02 development of native plant species all help toward reducing cost, waste and environmental harm.

Water management and usage is foremost on our minds, and in fact has now helped us create a unique and patented smart irrigation system that has reduced the use of water by nearly 20%. It was a learning experience, and one that gave us a lot more than just knowledge about growing plants in this region.

CEO, Desert Group.

03 The Jumeirah Golf Estates is set across 1,119 hectares.

and innovation. I believe that our special needs programme brings purpose to our organisation – it is essential to our growth plans and our connection with society.

What contributions do the companies in the Desert Group make to your bottom line?

Well, if you want some leadership lessons, look no further than plants.

You can learn daily from them. They give you lessons on patience, creating the right environment, providing the right inputs, respecting uniqueness, etc. Through its commitment, Desert Group has pioneered the growth of some new species in the region, which includes one of the first native plant nurseries. It’s an arduous process and, again, we are leading the way.

Desert Group’s traditional businesses revolved around landscaping, which contributed nearly 70% of the turnover. Since 2012, we have been focusing on the future requirements of an ecosystem. We’ve created new opportunities, resulting in smart irrigation systems and water management systems, and our newwave businesses that include soil rehabilitation, microorganism inoculation and food security.

We want to lead and create super synergy platforms that create new avenues of vertical and horizontal combinations that drive value.

These new business areas will contribute nearly 50% of the revenue in the next five years. That will be a huge transformation where innovation and ground-breaking ideas will see results.

Walk us through your plans for expansion in the region.

Do you think the mix of contributions will change?

We’ve altered our shape over the years – almost like an amoeba – rapidly changing and evolving. There is much to be done, not only in the MENA region but across the world, when it comes to creating ecosystem centricity and food security. We will go where there is opportunity to impact and enhance lives, and thereby create significant financial value to stakeholders, while managing that critical balance between disbursements

The government is pushing its agenda on sustainability and conservation.

However, we’ve already developed businesses that are path-breaking.

We’ve had a head start, given the thinkers in our management team.

Hence, you will see the mix of contribution in our revenue significantly change. We are a continuously evolving company, and we promise to provide ground-breaking eco-friendly solutions.

Could you elaborate on that last remark?

03

30 MAY 2017

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ON SITE

INSIghT

Seeing the Light Middle East Consultant talks to Ahmed Saliem, projects director at Nulty, about creating the right atmosphere through the intelligent use of lighting design

01

ulty is an architectural lighting design practice with offices in the UK and the UAE. The firm has worked on several projects across the region in recent years, and so its staff has a deep understanding of the lighting design sector in the region.

Tell us about your experience in the industry in the Middle East, and how you got into lighting design.

I started working in the lighting industry with another company and was 32 MAY 2017

transferred to Abu Dhabi, to work on the Al Raha beach project. It was here that I was first introduced to lighting design; my team were world specialists, and as junior I got to interface in the area where lighting design meets engineering. From there, it evolved into more lighting design and less electrical engineering; it was still based on calculations and simulations in terms of outputs and loads, but with time I started to work with architects and the rest, as they say, is history. I fully embraced the lighting design side and moved on to work on most of the big projects in the region, such as Saadiyat Cultural District, Sheikh Zayed Museum, as well as developments by Emaar and Meeras, and multiple hospitality projects in the Gulf and wider MENA region.

01

ON SITE

Bloomingdale’s store in Kuwait.

02 Ahmed Saliem is an experienced projects director at Nulty.

03 Optical eyewear chain MAgRABi is one of Nulty’s recent customers in the UAE.

how does the Middle East compare to other markets in its approach to lighting design?

To be honest, the Middle East in general thinks of lighting as an afterthought. It’s not something that is as necessary as, say, cutting-edge architectural design, whereas in other markets like Europe and the United States, lighting design is a core part of the design road map. The situation is changing, however, and through multiple attempts, the clientele in the Middle East is starting to see the value of lighting design to highlight the massive projects that are being built throughout the region.

It will take time, as not all segments of the market have that education, and even then, it is still left until the end and – more often than not – allocated to design and supply entities that are not supposed to be doing that type of design work to begin with. Lighting designers are often left to compete with design and supply firms, and to justify charging for their services, whereas design and supply entities offer that service for free. Usually the client goes through multiple failed projects with that approach, before they finally see the light and start hiring professional lighting designers, as they now understand the value that specialists bring to the table.

What’s the latest technology/solution or trend in the world of lighting design?

Any lighting designer worth their salt will tell you LEDs. I think LEDs are here to stay with us in terms of lighting applications, but I think the natural evolution of that is applying cutting-edge optics with lower consuming power chips and the Internet of Things (IoT). With advances in mobile technology, lighting is the next big thing on the always-on internet phenomenon that is popping up everywhere. With your smartphone, you will be able to control lights in all areas where you interact on a day-to-day basis: home, office and even the gym. You will also be able to personalise your own area of interaction, and set your own light levels the way you see fit: warm/cold, high/low, bright/dark are things that you will be able to change with your fingertips.

What’s the next big thing in the industry, and do you think the Middle East will get onboard with it?

I think the next big thing in the industry, along with the addition of usable controls by the public via mobile technology, is the evolution of the light fixture itself. The evolution of optics and materials is rendering light fixtures ever so slightly smaller ever year. I think the next big thing

will be ceiling solutions that double as light installations, which will render the entire space a well illuminated area.

The direction of fixtures as a feature, I think, will be in the past, while designers push the boundaries of interior and 02 exterior spaces. The fixture itself will no longer be bound by traditional shapes and conventional forms. Borrowing heavily from architectural shapes, the lighting fixtures might become sections of the façade or the entire ceiling. Seeing that we are in a market where architectural shapes are not bound by external natural elements, like snow for example, unusual shapes and forms might be coming to the market in the foreseeable future. Thanks to the need to be unique in the Middle Eastern market, I believe that this will be in the forefront of adoptability and pushing the limits. One should look at Dubai’s Museum of the Future as an example of what’s coming.

What opportunities and challenges do you see for Nulty in the Middle East over the next two years?

The challenge for the next couple of years is to combat the rise of the one-stop shops, with design and supply firms in the market increasing their share of the small and medium-size projects. A lot of clients and contractors prefer to deal with one entity in terms of supply, and if they offer design services, that is even better. But the argument is that these businesses operate on the lack of education of the other side. Also, the rise of value engineering is the norm, not the exception, in today’s market, where the designers are always asked to do a second and a third pass regarding design and specifications.

“Usually the client goes through multiple failed projects with that approach, before they finally see the light and start hiring professional lighting designers, as they now understand the value that specialists bring to the table” MAY 2017 33

ON SITE

“Value engineering is the biggest impact on the current design market. A lot of contractors try to convince the client that they can achieve the same results as specified with much less investment, and that plan always fails” given the current market conditions and smaller budgets for projects, is value engineering having an impact on lighting design?

Value engineering is the biggest impact on the current design market.

A lot of contractors try to convince the client that they can achieve the same results as specified with much less investment, and that plan always fails. The challenge with lighting design is it is always thought of as an addendum to a finished product, and that is a challenge in the current market. Adding to that problem, the multiple suppliers that try to value-engineer the original spec in order to push their own brands are creating multiple problems in the market. At the end of the day, this ruins the work of the designer, and leaves the client with a project that could have been much better in overall quality, had he simply followed the original specifications.

Does a lack of education in lighting design across the region

have a hand in these issues?

All the challenges mentioned above can be traced back to a lack of education regarding lighting; it is always thought of as some sort of black mystic art that not a lot of people try to understand. Sadly, it is usually left to the contractor and supplier to work out without much input from the client, except when it comes to the bottom line in terms of pricing.

External/facade lighting can significantly affect animals.

Is there an increasing emphasis on reducing the impact on wildlife in the region?

I think façade lighting design is an important aspect of a city’s skyline, and as such should be approached with a direction that would accentuate the nature of the building architecturally. Unfortunately, façade lighting has been increasingly designed by amateurs who floodlight the buildings with a massive amount of lights, and sometimes colour as well.

Regarding this, the local municipalities have started to implement laws and regulations 03 that reduce the lighting pollution resulting from excessive lighting on facades in the UAE and most gulf countries.

Nulty has worked on numerous regional projects in the Middle East.

Could you give us an overview of what you’ve done recently?

We are currently working on multiple high-end hospitality projects; as tourism steadily grows in the region, the direct response of this is an increase in high-end hospitality projects. Hospitality projects are the main area where lighting is soughtafter, as it creates an air of luxury in the overall space. This is also the case in highend retail and other showrooms – lighting plays a decisive factor in the customers’ experience, and we have recently finalised a MAGRABi showroom where our design input was followed, as was the testing and commissioning. This process ensured that the correct settings and light levels were applied to the areas in real time.

34 MAY 2017

ON SITE

OPINION

01 Craig Gibson is senior managing consultant at Berkeley Research Group.

The fiancée, the pizza and the disruption…

Craig Gibson of Berkeley Research Group (thinkBRG.com) discusses the methods used to quantify the financial effect of productivity lost through disruption Well, she isn’t my fiancée anymore, and we are forensically trying to work out how much our wedding cost. This quantification is more complicated than it seems! The same applies to quantifying the financial effect of the productivity lost through disruption. There are several common methods used to evaluate this, and here we’ll discuss the pros and cons in a direct manner.

1. Evaluation of Individual Events

01

L

ast month, I shared a story about my fiancée disrupting my progress in the kitchen, and how we ended up ordering a pizza that took longer and cost more money… I went on to compare that scenario with disruption in construction projects, and discussed the principles with which we can improve assessments of entitlement arising out of disruption, with an endeavour to discuss the quantification of those principles in a follow-up article. This is that article.

This is the most robust means by which to evaluate disruption. It enables each disruptive event to be considered independently on its merits, and the valuation of each event to be carried forward to award or determination.

However, it greatly relies on good labour allocation sheets and time records, which document time against specific disruptive events. It typically does not capture the full extent of the disruptive impact of individual events; in most instances, these records only document standing and idle time, and not the impact of the changed character of the works.

2. Measured Mile

This method compares the productivity in an unimpacted area with that in an impacted area. This is generally considered the most

appropriate means by which to calculate lost hours. The benefits of measured mile analysis include its avoidance of planned baselines and challenges of insufficiency, by not relying on theoretical/planned assessments of productivity. It uses actual productivity data to compare progress in an unimpacted area, which acts as the ‘should have been’ achieved productivity, to progress which was actually achieved – the difference is the lost productivity.

This can provide a detailed analysis of where productivity suffered.

However, properly completing a measured mile analysis is expensive, and relies heavily on good records of the allocation of labour to areas and tasks, the quantities of work performed at regular time intervals, and alignment with labour records. Moreover, the measured mile and impacted areas need to be of similar works, and of a similar nature to the impacted area.

The measured mile also needs to be of a large enough sample to be representative of the overall works, and adjusted to account for productivity failings.

In the first part of this article, I spoke of global claims being risky. A notable flaw of measured mile analysis is that it can result in a global type claim, as it does not directly link financial effects with specific events.

MAY 2017 35

ON SITE

“A fairly simple method can be summarised as Total Man Hours Expended less Tendered Man Hours less Man Hours Recovered in Change Orders = Lost Productivity” 3. Earned Value

Earned value analysis compares the man-hour recovery earned through the original pricing/ plan with that which was expended. It offers a number of positives – it can provide a detailed time-based picture as to when productivity began to drop compared to planned recovery, it can provide a signpost to identify areas and time periods that warrant particular focus and attention, and it is readily summarised to provide an overview. It can also be applied at the activity level to provide a detailed variance analysis. Perhaps most notably, should you present varying month-on-month earned values versus expended values, combined with a chronology of events, it can be the basis for a convincing case.

However, relying on planned hours as the basis for analysis is vulnerable to an opposing assertion that those planned hours were insufficient for the task. Likewise, without adjustment the analysis does not allow for contractor productivity losses, and it is vital that good records of the quantities of work installed be kept, to establish the amounts being earned. Finally, like the measured mile analysis, it will produce a global type claim, as it will not directly link the financial effects with specific events.

4. Productivity Curves and Factors

A simple and easy to apply method, which is cost-effective to produce and can be used with limited project information, is to apply a range of percentage uplifts to labour costs, to give a rudimentary additional cost of lost productivity if particular conditions exist.

The Mechanical Contractors Association of America (MCAA) lists sixteen factors, such as “morale and attitude” and “dilution of supervision”, as relevant conditions impacting productivity, and ranks the impact on these 36 MAY 2017

factors as Minor, Average or Severe, with a corresponding percentage uplift to labour cost.

This method can be used in conjunction with other analysis to support a reasonable measure of the effects. However, it is often used incorrectly as a basis for establishing causation in addition to the effect. It is also vulnerable to the challenge that the results are hypothetical, and the core data upon which the factors are derived are not available in most cases, and it is impossible to assert their applicability to the facts of any particular case. This method is rarely supported by experts as a single source of analysis.

5. Total Cost Claim

Another fairly simple method can be summarised as Total Man Hours Expended less Tendered Man Hours less Man Hours Recovered in Change Orders = Lost Productivity. This method is easy to apply, cost-effective to produce and can be used with limited project information.

However, using planned man hours leaves open the challenge that those planned man hours were insufficient, and without adjustment the analysis does not allow for contractor productivity losses. It will be a global type claim, so success tends to rest on the tribunal drawing inference that the loss arises from the events complained of having caused the loss. Conversely, if the developer can establish other causes of loss and/or tender insufficiency, the claim risks failure.

6. Modified Total Cost Claim

Developing on the above method, here the expended man hours are adjusted to account for the contractor’s own failing, and the tendered man hours are adjusted to account for any under-bidding or risks not accounted for in the tender man hours.

Subject to the availability of detailed tender breakdowns, this can be simple and easy to apply, making it cost-effective to produce, and is reliant on relatively limited project information. It does however require acknowledgement of tender and performance failing, and as it is still a global type claim, success rests on the tribunal drawing inference that the loss arises from the events complained of having caused the loss, and it risks failure if the events complained of are not shown to have caused the loss being claimed.

7. Cumulative Impact

This methodology measures the ripple effect of multiple changes on labour productivity.

Again, this is a simple methodology to apply, making it cost-effective and possible to use with limited project information. However, as with using Productivity Curves and Factors, if the relevant facts can be established, it can be used in conjunction with other analysis to support a reasonable measure of the effects.

It is often used incorrectly as a basis for establishing causation in addition to the effect, and is also vulnerable to the challenge that the results are hypothetical.

As with the Productivity Curves and Factors methodology, it relies on core data upon which factors are derived, which is unavailable in many cases, and it is impossible to assert their applicability to the facts of any particular case. As such, it is rarely supported by experts as a single source of analysis, but is useful in adding to the credibility of reasonable analysis.

I hope that the above gives you a broad overview of methods for quantifying disruption, but these articles are not a substitute for professional advice, so should your project be at risk of being in distress, please seek specific and tailored advice.

ON SITE

Godwin Austen Johnson ramps up focus on Qatar market

RTA plans to expand city smart lighting project Dubai’s Roads and Transport Authority (RTA) is planning to expand its smart LED lighting project, after it tracked a 50% improvement in power consumption in areas where it deployed the technology. The RTA installed smart lighting on the bridges that span the Dubai Water Canal, as well as on Sheikh Zayed Road and in Al Barsha South 1 and 2.

“Smart lighting enables the RTA to control lighting levels through preset fade-out programmes at certain times, which generates additional savings due to the reduced rates of consumption and maintenance costs. LED lighting is one of the best technologies in curbing carbon emission; it produces high-level and symmetric lighting throughout the road,” explained Maitha bin Adai, CEO of RTA’s Traffic and Roads Agency.

The system relies on a custom-designed app for the control room, and the app offers additional functionality as well.

“We took the initiative, as it enables central control of remote lighting units in real time through a smart app tailor-made for the control room.

This app is fed by a database of feedback received from lighting units, which assists in monitoring the operational condition of lighting, as well as the sharing of information and operational commands with these units. Another feature of the system is the automatic reporting of crashes, which cuts the response time to emergency maintenance and enhances the operational efficiency. Smart high-definition cameras have been installed to provide statistical data for monitoring the density of pedestrian movement in the locality,” explained Adai.

Architecture and design firm Godwin Austen Johnson (GAJ) is stepping up its efforts in Qatar. The company says it will appoint a business development manager to build closer working relationships with clients and raise its in-country profile.

The move comes as Qatar continues investing in infrastructure ahead of the 2022 World Cup. The firm says the Doha office will be supported by GAJ’s 180-strong team of architects, interior designers and MEP specialists based in the UAE office.

“Qatar has continued to invest heavily in infrastructure in preparation for the World Cup 2022, with significant investment in key areas such as airports, hospitals, schools and stadiums. Our decision to expand our team there is a timely one, as we continue to build our portfolio of clients and projects across the Middle East,” said Brian Johnson, managing partner of Godwin Austen Johnson.

The firm says its Doha office will provide architectural, interior design and specialist lighting services across the hospitality, education, commercial, government and residential sectors.

MAY 2017 37

ON SITE

Faithful+Gould elevates Paul Doherty to UAE country director Paul Doherty has been appointed UAE country director of Faithful+Gould. The firm says the appointment is part of its growth strategy for the region, and enables it to deliver the best possible solutions for its clients.

Doherty has been with the consultancy for 18 years and will be responsible for developing its business in the UAE. He will also be tasked with ensuring that Faithful+Gould is set up to take advantage of any strategic opportunities in the country in the coming years.

“This is a great opportunity for me to help develop our brand further, at a time when we can make a real difference to ensure major projects in the region are delivered on time and to budget. I’m very much looking forward to working with the team to leverage Faithful+Gould’s long track record in the Middle East,” explained Doherty.

Doherty has held numerous posts including head of project management and building surveying for the Midland region in the UK. He was also national business development lead for the SCAPE Asset Management Framework and, head of operations for the West Midlands region.

38 MAY 2017

Arcadis completes Doha Festival City project work Doha Festival City has opened for business, according to a statement

by Arcadis. The firm was appointed to work on the project in 2011 by Bawabat Al-Shamal Real Estate Company WLL (BASREC), the owners and developers of Doha Festival City.

Arcadis provided cost and commercial management services, and says its broad benchmark data and cost modelling tools enabled it to provide accurate estimates, which ensured that the designs were efficient, and could meet the return expected by equity funders.

Doha Festival City is home to some 500 retail units. It offers a total floor area of 433,000sqm and incorporates Qatar’s first IKEA store, a full-size Monoprix hypermarket and an Ace Hardware store.

Jack Overkamp, managing director of Arcadis’ operation in Qatar, said, “The opening of Doha Festival City is another important milestone in Qatar’s incredible journey. Arcadis is proud to have been involved on a scheme that’s helping to improve quality of life in Doha by providing the city’s growing population with access to first-class leisure, retail and entertainment facilities.”

Arcadis said its team managed change requests from over 500 tenants over the course of the project, and that it provided timely cost estimates that enabled clients to make informed decisions on spend. The firm implemented a two-stage procurement process to enable an early works contract, which allowed clients to start work ahead of an anticipated increase in construction costs in the Qatar market.

ON SITE

SOM grows ME presence with new office in Dubai

Khaled Awad elected president of American Concrete Institute Consulting firm Advanced Construction Technology Services (ACTS) has announced that founder Khaled Awad has been elected president of the American Concrete Institute (ACI). Awad will serve a one-year term, and is the first ACI member from the Middle East to take the top job.

The ACI is a non-profit technical and educational society created in 1904 which boasts almost 20,000 members globally. It is one of the world’s leading authorities on concrete technology, and acts as a platform for discussions relating to concrete and the development of new solutions.

“It is an honour to follow in the footsteps of my illustrious predecessors. I am humbled to be given the opportunity to serve a globally renowned organisation, and to lead a truly international community of dedicated engineering scholars and construction professionals,” said Awad. “As ACI president, and working alongside the Executive Committee and Board of Directors of ACI, I will seek to highlight the role and importance of what the American Concrete Institute can and should play internationally.”

Skidmore, Owings & Merrill (SOM) has strengthened its regional presence with a new office in Dubai. Staff in this office will oversee current MENA projects, and will also be tasked with generating new project proposals.

The office will also offer urban planning services through SOM’s City Design Practice. Thomas Behr, SOM Firmwide MENA managing partner, will oversee the region, while Uwe Nienstedt, SOM senior regional manager, will lead the office operations in Dubai.

“Our new office allows SOM to build upon decades of experience in the Middle East. By establishing a formal presence in Dubai – an important business centre for the region – we are better equipped to serve our local clients, to work with consultants and officials, and to further develop our design and technical expertise specific to the region,” Behr said.

Recent projects include the King Abdul Aziz Boulevard Hotels and Serviced Apartments in Mecca, Saudi Arabia; the Saudi Arabian Monetary Authority in Riyadh, Saudi Arabia; the Kuwait University Student Activities and Athletic Facilities in Shadadiya, Kuwait; the Kuwait University Administration Facilities in Shadadiya; and Mashreq Bank HQ in Dubai.

The office is in the Maze Tower, on Dubai’s Sheikh Zayed Road.

MAY 2017 39

THE BACK PAGE

01 Dr Gary Vastag is the

LAST WORD

founder and managing director of Grayscale Interiors.

Preventative Measures Paying attention to five simple design factors will help consultants deliver a superior project, says Grayscale Interiors’ Dr Gary Vastag

01

O

ne of the factors that drove me to launch my own enterprise was that fit-out contractors are uniquely positioned; we can spot a design flaw and flag it with the managing jobsite entity, or leave it alone. I’ve received mixed responses here; some clients are pleased to nip a design misstep in the bud, while others choose to shoot the messenger.

I am often presented with designs that are ill-equipped for end users, and that’s just one problem. We, in our position in the construction chain, can only hope that these designs have been properly extrapolated from client briefs. I find that post-handover issues are due to a lack 40 MAY 2017

of experience somewhere in the food chain. My suggestion is that both consultants and general contractors check for a few simple elements (listed below) at the design stage.

Interface between elements: Take a look at the designer’s consistency and neatness of borders and joints. You should be looking for a seamless interface between different finishes, resulting in an all-round neater project. This is complemented by using simple, readily available products from the local market. The second part is asking whether the design is smart. Smart design means that space planning with realistic tolerances creates massive dramatic impact when delivered.

Choose finishing wisely: Pay attention to the materials used in the design specifications.

Often, the reality is that the immediate appearance is only noticed by industry professionals, while clients and end users are none the wiser. Hence, after some time, the resulting interiors demonstrate a product failure that is visible to the end user. Unfortunately, this becomes an issue shouldered by the client, who must then invest money in corrective measures.

Eyeball lighting suggestions: Ensure that the correct lighting is planned for the interior spaces. Lighting, if used effectively, can create the ‘wow’ factor; conversely, it can also result in an ordinary result that fails to meet client expectations. How and where you position the

lighting is critical – although it still comes down to budget, as better lighting isn’t cheap.

Examine height of space: Perspective changes depending on the design, but better planned ceiling levels often result in better spaces for both aesthetics and acoustics. For example, a dropping bulkhead can limit the visual impact of any interior, and often reduces the end user’s feeling of a comfortable, open space. Compared to a flat ceiling, a raised ceiling can open up the space, increasing the designer’s lighting choices, as well as the acoustic benefits.

Consider fit for purpose: This should be raised by any contractor. Ask yourself: “Is the design the right answer to the question?” A great example is industries that dictate confidential space requirements. Some designs have simple wall configurations and ceilings for commercial spaces – law firms, financial institutions, etc.

Mitigating reduced privacy can be achieved by choosing the correct wall systems, be it solid or glass, or door treatments. Even plenum baffling comes into play here.

I don’t need to stress that retroactive correction of flawed designs negatively impacts delivery timelines, and ultimately starts to blow the client’s budget post-contract award. Closely examining these factors will save clients time and money, and in our hyper-timeline-driven market, this is always welcome. Take a closer look, and your clients will thank you for it!

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