Design Economics for the Built Environment: Impact of Sustainability on Project Evaluation

Chapter 10Sustainable Design, Investment and Value

Thomas Lützkendorf and David Lorenz

10.1 Introduction

Whenever design and construction works are agreed upon it is usually assumed that an essential starting point is the description and specification of the functional and technical requirements. These requirements may either result from the investor’s/client’s (or future users’) ideas and preferences or may also be based on the current legal and normative framework. These are the requirements, implied characteristics and attributes which a building or construction work should possess during its subsequent life cycle. The traditional view, particularly popular among designers and planners, does not fully represent the complexity of investment decisions and their underlying rationale within the construction sector. Indeed, investors and project developers also specify requirements regarding a building’s functional and technical quality. However, depending on their role and perspective they also integrate these requirements in early phases of a project with their ideas on a budget, financing possibilities, financial and other risks, as well as the expectations concerning future cash flows, returns, value stability and development. In addition, investors and project developers take into account the respective location and market situation and its specific dynamics. Increasingly, they also consider the impact of their investment decisions on society and the environment and try to contribute ...