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The plumbing renovation barometer: planning in the long term is key to the operations of housing companies

Sweco was involved in carrying out the Finnish Real Estate Management Federation’s annual plumbing renovation barometer (Putkiremonttibarometri) published on 12 April 2019. The most important reasons for starting plumbing renovations are leaks found in plumbing systems and observations made during conditions surveys. Anticipation and carefully implemented long term plans guide the maintenance of housing companies, but their importance is not yet evident in all decisions.

A plumbing renovation project improves the comfort of living and increases the value of the real estate. Renovations are often postponed in vain. A positive finding of the plumbing renovation barometer is that real estate managers are mainly happy with the completed renovations year after year. Carrying out plumbing renovations requires good advance planning and expertise in the various phases of the project.

Funding through complementary building

The plumbing renovation barometer reinforces the impression that housing companies are often late with their plumbing renovations. Leaks in plumbing systems are the most important reason for getting started. The significance of having a long-term plan has remained practically unchanged during the follow-up period of the barometer. A slight majority of respondents say that a long-term plan has influenced their renovation schedule.

“Discussions in the spring have highlighted the proportion complementary or additional building accounts for in the funding of renovations carried out by housing companies. A long-term plan is favoured because it allows for early financial preparedness for renovations. Housing companies should definitely look into the possibility of complementary building, building additional floors or building in the attic, for example. The revenue from these operations can be used to fund at least some of the renovation projects,” Unit Manager Kim Karves from Sweco confirms.

Challenging the fixed price contract – increasing transparency

Project planning for a plumbing renovation project can reveal implementation options and costs as well as energy issues, extension and complementary building options and different implementation models. Target priced collaborative contracts complete with an incentive system have started to gain ground at the expense of fixed price contracts. Overall, the proportion they account for remains quite small, but Kim Karves of Sweco believes that they are on the rise.

According to the plumbing renovation barometer, decisions made by housing companies will in the future be mostly influenced by energy-saving solutions connected to plumbing renovations as well as the clarity and transparency of the responsibilities within the project.

Sweco is also a champion of energy efficiency, because the energy investments made now will significantly lower costs in the future.

It is interesting that the clarity and transparency of the responsibilities within projects were featured so prominently. This issue can be resolved through new types of implementation models, in particular. When the contractor is involved in the project from the start and everyone has the same goal along with shared gauges and incentives, things will be managed more transparently and responsibilities will be more clearly defined. “Collaboration and partnership models facilitate improved financial monitoring and transparency,” Kim Karves stresses.

The plumbing renovation barometer is available on the Finnish Real Estate Management Federation website.