Like any part of a building, the heating, ventilation, and air conditioning (HVAC) have a finite lifespan. But upgrading the HVAC plant is often low on the priority list, below cosmetic changes or interior refits that appeal to current or potential tenants. While it’s not as instantly appealing as a paint job and new floor coverings, regenerating your HVAC can be the most worthwhile investment in a workplace – and it has to be done at some point.
So, when is the ideal time to start the process? There are several common triggers. When a tenant’s lease expires and a new tenant is planned, there is a great window of opportunity for what can be fairly disruptive work. Likewise, if a tenant undergoes a major interior refit, installing new HVAC plant can happen in parallel to minimise disruption. Both situations aim to make good use of existing disruption.
The third common scenario is when unreliable systems are the cause of disruption. Outages resulting in downtime, or an increasing need for maintenance that gives rise to tenant complaints, are not good news for a landlord and can sour the relationship with tenants.
Lastly, when your HVAC plant fails or has reached the end of its economic life (and is costing more to fix than is worth investing) it is time for regeneration.
For many landlords, the systems in their building were there when they bought it. They often do not know what is installed, what its current, residual or replacement value is, or even what condition it is in. If they were asked “how many viable years does this system have left?”, most would not know. And they would be unaware of which particular elements are likely to fail when, and what impact that will have on their tenants.
It is not necessarily landlord negligence. It is often just low on their list of priorities because HVAC systems tend to be invisible – until they make themselves visible. Suddenly, unplanned maintenance or urgent upgrades are required, hitting landlord budgets and cashflow. And because they are both unexpected and urgent, there is usually no time to do things right. No careful design to ensure the right equipment. No tender process to attract competitive pricing. No lead-time to procure the right equipment, so compromised substitutions have to be made, which builds in unnecessary risk for the next 20 years. The opportunity for system improvements is lost.
There are immediate costs too. Urgent work often means paying for overtime to get the problem fixed, fast. It needs to be fast, because unplanned outages cause significant disruption for tenants that can sour relationships and, in the worst-case scenario, lead to unrenewed leases of even legal action. A tenant who has lost product, had their productivity impacted, or lost the ‘quiet enjoyment’ they are entitled to in their lease can be a far more expensive issue for a landlord than investing in a smart and resilient HVAC refit.
All that trouble can be avoided by looking ahead, taking life cycle costs into account, and choosing to future proof a building’s value to current and future tenants. It starts with planning.
The first step is a Condition & Operational audit of the installed plant. This identifies what upgrades are needed and allows them to be scheduled for minimal disruption. This is also a good time to explain the disruption to existing tenants in practical terms. The benefits will be perceived differently depending on what changes are being made. Imagine the building is a car: is it getting a new engine, because the old one is failing, with no noticeable performance change? Is it getting a bigger, more powerful engine? Or is it getting a more efficient engine that is going to reduce energy consumption? When an existing or incoming tenant is clear on what the outcome is going to be, the upgrading of HVAC plant can be more easily coordinated with them to provide minimal disruption.
In line with the car engine analogy, a planned HVAC upgrade has the scope to be much more than just a replacement of like for like. It can effectively regenerate a building and its viability as a workplace. The latest technology can be incorporated, energy efficiency measures can be installed, and allowance can be made for future expansion. The upgrade does not have to be all done in one hit either; with forward planning, it can be staged over several years, all the stages providing incremental improvements and eventually coming together as a coherent system.
As a landlord, it can be a significant investment but a smart one. It is an opportunity to improve the overall quality of a building across the board. It can be upgraded for better energy efficiency, earning a higher NABESNZ or GreenStar Performance rating. Steps can be taken to improve interior air quality (IAQ), which can have significant tenant health, wellbeing, and productivity benefits. It is a chance to assess the whole of life costs of the building. And it is also an opportunity for landlords to demonstrate that they are proactive and care about the end user experience of their tenants and their visitors.
At Jacksons, this consultative approach is how we approach all our projects. As specialised HVAC engineers, we regularly provide independent Condition & Operational audits. The depth of experience we have means we have a detailed knowledge of how HVAC issues in existing, older buildings play out over time as well as the impact of new technologies. This end-to-end understanding allows us to consider all aspects of a project, providing a detailed plan and comprehensive budget up front so that sufficient capex allowances can be made.
As a landlord, it is easy to fall into the trap of seeing the replacement of existing HVAC plant as a negative expense with no long-term gain. In fact, done well by the experts in consultation with both landlord and tenants, it can mean the regeneration of a tired building and a more sustainable, easily tenanted investment with a longer viable life.