VIBEO is a consortium of real estate and construction players. Why was it created, and to what end?

This consortium resulted from three observations. First, the question of property valuation. The location largely -if not exclusively- determines the value of a property, which is reflected on a company’s balance sheet. However, other parameters related to the building evidently should have an influence on the value, and by extension, on the company performance. Second, the existing environmental certifications such as LEED, BREEAM, HQE, etc. represent highly qualitative approaches. In a property-development project, it is difficult to express a gain in terms of value based on certification results. We are fairly certain that a certified building will perform better than a non-certified one, but it is impossible to turn that into the expression of an economic gain for the owner or occupant of the building. In addition, it is difficult to effectively compare two buildings that have acquired he same level of certification. Finally, of the total operating costs of a company on average, payroll represents 90%, whereas rent represents 9% and energy consumption 1%. The most strategic investment a company can make is therefore in its employees, their productivity and their general satisfaction. For example, an estimated €4,000 to €26,000 per year and per employee are lost due to degradations in people’s work environment. These considerations are all linked to the concept of “intangible value” in a company. On the scale of an office building, we talk about the concept of “practical value.” In other words: How do we evaluate the impact of the building on its occupants and their productivity? What do we gain by making choices meant to improve the comfort and quality of life at work? Having made these observations, property developer SERCIB began research work, with help from Goodwill Management. Other partners quickly expressed their interest in this research and joined the working group, named VIBEO. This working group now comprises a dozen major players in real estate present at all steps of the value chain, including Bouygues Construction.

How did implementation go, and what were the major validation steps for such a methodology?

To be able to quantify the practical value of an office building, we had to link it to what generates value for the company: employee productivity. By basing ourselves on numerous international studies in social sciences and on the work of Goodwill Management on intangible value in companies, we obtained correlations between parameters related to buildings and parameters influencing productivity: Parameters related to buildings: • Location and accessibility, • Intrinsic functional qualities (acoustics/thermal/compact layout/…) • Interior fittings and services. Parameters influencing productivity: • Motivation, • Serenity, • Physical well-being, • Hours lost, • Absenteeism/Turnover. To validate this model, we conducted two campaigns with “on-site measures”. The first was carried out in 2014/2015 in five buildings, including CPI’s head office in Les Ulis. The second campaign was conducted in 2017 in more than ten buildings, including Challenger. For this, in addition to survey responses and audits from Goodwill Management (analyses of technical documents, analyses of consumption, interviews with facility management teams), about forty participants performed tests in-situ. Each participant came to work a day in each of the buildings. Their concentration was measured twice per day using a cognitive ability measurement tool, “Lumosity ”. GreenMe, a sensor that collects data (air humidity, temperature, noise…), was also used for more detailed analyses. The results of these measurement campaigns reinforced the model. There was a convergence observed between the notes obtained from the model and the measured productivity of the participants. In fact, the results of this work were presented during a 2017 conference at SIMI with all of the partners.

In practice, what does the evaluation process look like, and in which cases can it be used?

It is a method for evaluation, not measurement. In practice, people fill out a survey linked to the various parameters influencing productivity. Answers to these questions result in an extra-financial rating on each productivity-related theme. This extra-financial rating leads to a “productivity model” enabling us to determine the impact of a building on occupants’productivity and the resulting monetary gains or losses. The gains or losses in terms of operating costs (maintenance/energy bills/etc.) are also evaluated. In the end, you obtain a result that can be compared with standards (low performance/meets standards/high performance) or with a variation on your own project. The methodology may be used at any stage of the targeted project, whether the building is at the design stage or already built and operational. Irrelevant questions may be removed from the survey for the design phase upstream. What stands out compared with certifications such as the “Well” is the integration of the “productivity model” tool which enables us to determine the impact of building parameters on productivity and come up with a calculation of the practical value in €. At Bouygues Construction, we plan on using the tool in three different ways at three different project steps: during eco-design as a decision-making tool; during renovation to evaluate the gain obtained by comparing the project to the existing structure; and in facility management to evaluate the operational performance and advise clients on their choices in terms of maintenance, renovation and services. There will be training sessions for the employees who are interested, and OU support on a project, financed by R&D.

What might the next step look like for the working group?

The next step for the working group is being considered under different angles. There are thoughts of duplicating the method on school or hospital buildings, using the same building parameters but testing their influence on other sociological criteria: • In the hospital sector, a number of studies already exist on the correlation between sick patients’ recovery and the environment in which they received healthcare. The ability to evaluate the gains for society linked to faster recovery, partly thanks to the properties of the building where care was received, would be one angle; • For education, it is easy to draw a parallel with the students’ concentration and capacity to learn. The goal would then be to assess the value brought to society by students’improved learning process. The official integration of the practical value of property into the Discounted Cash-Flow (DCF) method is being studied by organisations in the industry: the IFEI (French institute of real estate valuation) and the AFREXIM (French association of real estate valuation companies).