Value creation and risk assessment for green building design in Saudi Arabia

The ethos behind green building development is to create facilities that must minimise waste and energy use throughout their life cycle stages. One paradigm behind the design of green buildings is the focus on selecting material and design solutions based on durability/reliability and longevity performance criteria. Furthermore, the endeavour behind the investment in green buildings is to improve life cycle operation performance through the reduction of energy, water use, waste, and operation and maintenance costs. There is emerging evidence to suggest that the operational performance of green buildings has a significant impact on their rental and market value. Therefore, considering operational features during the early stages of value planning will probably go a long way to protect and increase the value of investment in green real estate by taking into consideration risks and initiatives to improve the energy efficiency and sustainability of assets throughout their entire life cycle. In this study, it is deemed important that both tangible and intangible value creation processes and drivers should be explored in the quest for value creation in green building development. A combination of literature sources identified the value drivers that were reported to be important for value creation in green building development and a list of risks that may have a negative impact on value created by green building design. In total, 66 risk factors and 98 value drivers were identified which are split between five homogenous groups. The list of value drivers and risk factors were used to develop a questionnaire to assess their effectiveness in value creation. Both qualitative and quantitative approaches were used in this research. The literature review has been used to synthesise existing knowledge to identify gaps in knowledge in the proposed research area and to confirm and articulate the research questions and objectives. A hand-delivered survey was used as the main method for data collection. The questionnaire was designed and then tested on a small sample of academics to make sure the questions were correctly understood. The participants were selected randomly from a pool of experts who are knowledgeable about value engineering analysis in Saudi Arabia construction industry. The developed value creation framework and associated assessment risk and value tools are usable at the early stages of preparing a business case and design for developing green buildings. The framework and tools can be used to assist in sustainability and value for money analysis. The value generated from investment in green buildings will hinge on the level of value creation strategies inducted into the project brief and on the perceived risks from not including some of the value generating strategies. In addition, the proposed generic framework provides appropriate opportunities for the stakeholders to assess value and risk impacts before the actual construction starts. It will provide a cheap alternative simulation environment for testing what if scenarios. Although value drivers and risks are mainly derived for green building assets, as commonalities across similar building projects exists, this will provide appropriate opportunities for this research to be utilised in other building types as well. In addition, the study has attempted to elicit value creation drivers that can be used to aid value engineering analysis become a usable tool that assists in unlocking value in the development of green buildings. The risks that challenge the destruction of value are also considered for adoption into a practical tool. This is achieved in part by defining the drivers that contribute to value creation and in part by defining the risks that may have an impact on realising the identified value.