The document discusses establishing a circular economy for construction and real estate through new business models and relationships between building owners and users. It advocates a "cradle-to-cradle" approach where suppliers retain control over resources even after use in buildings. This allows components to be reused when it is economically and environmentally sensible. A research project will examine separating base buildings from changeable interior fit outs, explore performance-based contracts, and capture the new process in technical standards to establish a sustainable circular construction economy. Private sponsors of the €400,000 research will receive access to results and influence the approach to gain competitive advantage.

1. NEW RELATIONSHIPS AND SUSTAINABLE BUSINESS MODELS
IN CONSTRUCTION AND REAL ESTATE
The present way we handle products and resources in construction
severely hinders the growth towards a circular construction economy.
Suppliers and producers should keep control over the products and
resources they have supplied, even after those have been processed in a
building.
Build ‘cradle-to-cradle’!
For decades Professor Michael Braungart and architect William
McDonough have been advocating such a cradle-to-cradle approach, also
in construction. For this, user participation and a separation of building
components are crucial. After all, the base building is put down once and
rarely updated. The fit outs however, are regularly rebuilt.
In this way the resources stored in the building components can be put
to a maximum use. They are free for re-use at the time that is functionally, technically, economically and environmentally most sensible.
Forestall the ‘split incentive’!
Furthermore, the 'split incentive' precludes maximum efficiency for both
users and investors. The only real solution to this problem is another
division of ownership between those parties, tailored to the risks they
run and the lifecycle of the building components involved.
Building cradle-to-cradle and a largely eradicated 'split incentive' give
rise to a circular construction and resource economy that allows new
types of contracts, such as performance based contracting.
This provides several important advantages.
 The process is more efficient and cheaper, even in the investment
phase.
 Building requires less material and energy, especially when
renovating or restoring.
 The residual and resource value of each building component
increases.
 Manufacturers of construction products and building components can
develop, for example, leasing concepts, based on a life-time warranty.
 Construction products and resources that are released during
demolition can be re-used.
 Thus arises a circular construction and resource economy with new
business models and earnings.
 The impact on the environment decreases considerably.
 The changed relationship between the building owner and user
complements the economic and ecological aspects with a social
component.
Pagina 1

2. Research is needed
Under the auspices of the Dutch Organization for Scientific Research,
NWO, the study ´New relations and sustainable business models in
construction and real estate´ is launched soon. Its aims are:
1. to generally define the separation of base building and fit outs in legal
and fiscal terms;
2. to formulate proposals for new and updated legal and fiscal
principles and instruments;
3. to determine the consequences for government, politics and business;
4. to arrive at a new construction and real estate process with a circular
construction and resource economy as a starting point;
5. to explore new economic concepts that go beyond the traditional
forms of ownership and tenancy and appoint the promising contracts
possible on this basis;
6. to capture the new construction and real estate process in technical
arrangements and to summarize these in a new standard that is easy
to manage and uphold.
Within the NWO conditions, a university research team will conduct the
research in conjunction with the (central) government – invested there
because of the legal and fiscal primate – the vocational-oriented higher
education and the business community. It is a sure thing the business
community will benefit from the new sustainable business models and
earnings.
Research budget
The total budget required for this research is still under investigation,
but it is estimated at € 400,000.00 At least € 100,000.00 needs to come
from public and private partners. The total study will take an estimated
two years. We expect to present the first results after six months.
The benefits for sponsors from the business
Private real estate investors, contractors and suppliers to construction or
others that contribute to the research budget, get access to the research
results and they participate in the elaboration of the study. In doing so
they have the opportunity to influence the research approach and
formulate their own research questions. With the answers they create a
sustainable advantage over their competitors for sure.
Remko Zuidema,
Decembre 30, 2013.
Briqs Foundation
P.O. box 75657
1070 AR Amsterdam
Telephone: +31 206 780 780
Email address: office@briqs.org
Triodos Bank: NL70TRIO 0254571301
Trade Register Amsterdam: 54198399
VAT: NL8512.12.931.B01
Pagina 2