[Nordic GBC Conference 2013] Pekka Pajakkala - Business Opportunities with Renovations


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[Nordic GBC Conference 2013] Pekka Pajakkala - Business Opportunities with Renovations

  1. 1. Pekka Pajakkala 31.1.2013 1Business opportunities with renovations PEKKA PAJAKKALA, Senior Advisor VTT Business Solutions / Real Estate and Construction Nordic GBC-conference, Helsinki, 31.1.2013
  2. 2. Pekka Pajakkala 31.1.2013 2 CONTENTSVTTEuropean and Nordic Construction Output• The role and market of R&M of BuildingsGrade for the Finnish Building Stock• refurbishment debtRenovation needs in FinlandCompany strategies to increaserenovation business Summary
  3. 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 complexityIndustrial 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 practicesdevelopment ICT for healthdevelopment VTT: Personnel 3 200 Turnover 315 M€ (2012)
  4. 4. Pekka Pajakkala 31.1.2013 4European construction by sectors until 2014
  5. 5. Pekka Pajakkala 31.1.2013 5 Factors influencing European ConstructionIFO
  6. 6. Pekka Pajakkala 31.1.2013 6Volume of Building Renovation in the Nordic Countries
  7. 7. Pekka Pajakkala 31.1.2013 7 The NordicConstruction Output R&M of Buildings is68 €.bill, 53 %
  8. 8. Pekka Pajakkala 31.1.2013 8 Growth of GDP and Renovation of Buildings in Finland volume -index 2000 = 100150140130 R&M of buildings120110 GDP100 90 80 70 60 50 R&M growth is equal to GDP growth => Low growth possibilities in the next years
  9. 9. Pekka Pajakkala 31.1.2013 9 ””State of the Nation of Built Environment in Finland
  10. 10. Pekka Pajakkala 31.1.2013 10Grade for Finnish Buildings (stock) scale 4…10Apartment buildingsDetached houses and holiday homesBusiness premisesPublic service buildingsProduction facilitiesImpact 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. 11. Pekka Pajakkala 31.1.2013 11Grade for buildings 7½ => satisfactoryWhy 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. 12. Pekka Pajakkala 31.1.2013 12Grade for Eco Efficiency of FinnishBuildings 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. 13. Pekka Pajakkala 31.1.2013 13Inadequate 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. 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. 15. Pekka Pajakkala 31.1.2013 15 Consumption of heating energy in blocks of flats, Finland kWh/m3/aHow big is the potential for demolition because of the poor energy efficiency ?
  16. 16. Pekka Pajakkala 31.1.2013 16 Renovation or demolitionNew requirements for buildings mean more demolitions
  17. 17. Pekka Pajakkala 31.1.2013 17Possible strategies to increase renovation business ISource: Terttu Vainio, VTT
  18. 18. Pekka Pajakkala 31.1.2013 18Possible strategies to increase renovation business II Source: Terttu Vainio, VTT
  19. 19. Pekka Pajakkala 31.1.2013 19Possible strategies to increase renovation business IIISource: Terttu Vainio, VTT
  20. 20. Pekka Pajakkala 31.1.2013 20Volume index for turnover of Finnish Building Companies* *with more than 10 employees 3x R&M of Buildings 2x New Building
  21. 21. Pekka Pajakkala 31.1.2013 21Development of renovation market in FinlandStatistics Finland
  22. 22. Pekka Pajakkala 31.1.2013 22New 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. 23. Pekka Pajakkala 31.1.2013 23 Summary1. Renovation business is stable and growing compared to new building (in Europe, in Nordic), the outlook for new building is poor2. In Western Europe and Nordic countries the R&M market is bigger than new building market3. We have a poor statistics and information on R&M in all countries4. 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. 24. Pekka Pajakkala 31.1.2013 24 Summary II4. 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 it5. The growth in R&M business in based on both increase of R&M market and share of commercial R&M