Sustainability and RenovationNew Business in Maximizing
the Property Value of Aging Buildings
March 26, 2018
Shimizu renovated the DSB Group Shiomi Building and made improvements for sustainability. The exterior appearance has not changed since it was completed in 1995.
We acquired an existing building that had reached the point of needing renovation and maximized the property value by renovating it to equip it with the latest environmental performance, BCP performance, a healthy and comfortable environment, and other improvements. This type of business scheme is becoming popular in the investment and real estate industries.
Shimizu launched a full-fledged Sustainability and Renovation Business in September 2017 to capitalize on this trend.
One-stop Shopping in the Build-to-Order Business
Shimizu’s Sustainability and Renovation Business is a new business that combines the sustainability business, which focuses on environmental and energy management, and the building stock management business of operating, maintaining, and managing buildings throughout their life cycles.
We completed a large-scale renovation of the DSB Group Shiomi Building in Koto City, Tokyo in January 2018 as the first project. Shimizu built this office building more than 20 years ago, and it was used as the Tokyo Wangan Police Station in the “Odoru Daisousasen (Bayside Shakedown)” television crime drama.
Yasuo Kageyama, the deputy general manager of the LCV (Life Cycle Valuation)(only in Japanese)Headquarters, which oversees the Sustainability and Renovation Business, had this to say about the new business:
“The construction business mainly involved contracting of work by the client who orders it up to this point. The Sustainability and Renovation Business could be termed an order creation model in which Shimizu generates its own work. The main business scheme for the DSB Group Shiomi Building was for Shimizu to first acquire trust beneficiary rights to the building from the owner (the right to receive the economic interest generated by rental income, etc. from the asset entrusted). Shimizu then undertook a major renovation of the building to improve the building’s performance in terms of the environment, health, and BCP. New long-term lease agreements were concluded with the existing tenants based on the improvement in building value and customer satisfaction. The trust beneficiary rights have already been sold to Hulic Co., Ltd., a real estate development company and Shimizu has earned a profit. We are also providing post-renovation PM (property management) and BM (building management) services. This is a one-stop shopping business in which Shimizu provides everything, from planning to the proposal and implementation. This is a business that is perfectly suited to Shimizu, owing to its ability to marshal the forces of numerous divisions, including investment and development, the Institute of Technology, design, construction, engineering, finance and accounting, and affiliated companies.”
Risk and Wellness + Adding Value from an Ecological Perspective
Shimizu focused on “risk” and “wellness + ecology” to maximize the value of the DSB Group Shiomi Building in this project.
We reinforced the ceiling to make it earthquake resistant on the first floor, which will serve as the evacuation route in the event of a disaster, to address the risk. The installation of Shimizu’s innovative earthquake safety monitoring (only in Japanese) systemenables a rapid initial response to evaluate damage and assess safety when an earthquake occurs. We also equipped the building with an emergency power source, air condition and water supply and drainage system that could last for 72 hours during an emergency. Securing satellite hookups for BCP phones and Internet lines will enable building occupants to communicate with the outside world during a disaster. The building is near the ocean so we took steps to prevent water damage by building a higher flood barrier to prevent water from entering the vehicle entrance and installing water-tight barriers at the entrances and exits of the main equipment rooms, among other steps.
We installed a new shower room in the basement in addition to performing a full renovation of the restrooms and kitchens to improve habitability and make the building healthy and ecologically friendly. We upgraded all light fixtures throughout the building to LED and installed an adjustable lighting system that enables occupants to change the color temperature and intensity of lights on floors with lounges.
We also created new spaces for refreshment surrounded by greenery outside on the grounds facing the canal.
Our plan to proceed with renovations while tenants remained in the building and continued their business operations was also appreciated by the tenants.
Responding with Made-to-Order Ideas
“The managers who use the building are always thinking about the safety and security of employees and ensuring their comfort. We are therefore called upon to propose made-to-order ideas when considering how much we can increase the value of existing buildings,” commented Mr. Kageyama.
Based on the strength of its success in renovating and improving the sustainability of the DSB Group Shiomi Building, Shimizu plans to target three to five properties a year as projects for this business in the future, and will focus mainly on existing buildings that were built by Shimizu.
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