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REAL ESTATE: Project Management – Crucial Factor Behind the Success of Fit-out Projects
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altIn the worldwide real estate industry, one often hears and knows of leasing and sales brokerages covering residential, retail and office property sectors, amongst others. But one seldom comes across “Project Management”. So what is “Project Management” all about and what benefits does it bring to the table for any well-informed property owner?

“Project Management” is succinctly captured by the following characteristics:
a) A comprehensive service offering that encompasses site evaluation, due diligence, feasibility planning, design management, tendering management, construction management, and move co-ordination;
b) A single point of project accountability that drives consistent processes, implements quality control, and serves as a point of escalation
c) Using cost-efficient and scalable staffing models, delivers cost savings and enables efficient use of capital expenditure.
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As Project Management covers both “Fit-out” and “Greenfield” projects, we will only be taking a look at its scope relating to “Fit-out” assignments in this article. Greenfield projects are similar in processes but vary in specific steps.

When selecting a new site for an office space, a site inspection and technical due diligence are necessary in order to understand the landlord’s base building plans in relation to onsite constraints, potential risks, and opportunities and one should review the tenant’s fit-out guide. The Transaction Team is advised regarding clauses that should be amended in the draft lease and recommends the inclusion of new clauses to ensure a CLIENT's interest is well covered during the lease negotiation. Some initial project estimates are prepared at the same time as well a preliminary master project schedule.

altThis is then followed by pre-design where user’s requirements are collected via questionnaires which are distributed among the various departments of the Client’s office. Feedback is collected from senior and specialist staff, before space requirements are prepared. These requirements would indicate existing and projected personnel, IT requirements, utilities, specialty areas such as computer rooms and ancillary areas such as common, pantry, and meeting facilities. From here, the selection of an interior design firm and M&E (Mechanical & Electrical) Consultant takes place where pre-qualification exercises are held to identify the appropriate vendors.

At the design stage, together with the Design Consultants, a master schedule is prepared and maintained from concept to completion to record principal activities and identify critical dates. At the design development phase, a single point of contact from the Project Management team, normally the designated project manager, between the Client and all related parties will be responsible for the co-ordination and maintenance of the user’s requirements. A project risk assessment is prepared and plans will be set up to minimize their impact. By monitoring the work, the Client is assured that the complete set of design drawings and specifications are in accordance with their needs. Meetings held on a regular basis will outline the progress, design issues, budget, statutory approvals and these will be reported to the Client.

The fourth stage is the procurement process where together with the Design Consultants and Client, the selection and method of appointment of preferred/nominated contractors will be decided on, and the extent of design and specifications will be included in tender documents. The entire tendering process will be managed transparently to ensure that the quality of work is not compromised by the costing provided by sub-contractors. A tender assessment report to the Client will be prepared for commercial negotiation, following which, recommendations will be made for awarding contracts.

At the construction phase, a construction master schedule is prepared and monitored, in which it includes design arrangement, procurement, construction, statutory approval and close-out, and is reviewed together with all relevant parties when necessary. Primary concerns include identifying key milestones and schedule constraints and also ensure contractor and Client, nominated sub-contractors and suppliers meet programme requirements. Site work will be monitored, including quality, environmental, health, and safety issues. Co-ordination on design information and changes will have to be factored into the contractors’ work. Regular reports will be submitted to the Client regarding the contractors’ progress, monitoring, and tracking approvals of statutory requirements, and ensuring cost control as these form part of maintaining a rolling action list. Any cost variations and the cost implications of extensions of time and forecast completion dates will be duly reported to the Client.

altThe sixth stage in the “fit-out” process relates to a commissioning phase whereby testing and commissioning is done before handover and final occupancy by the Client. Operations and Maintenance manuals are prepared, incorporating as-built documents and drawings, guarantees and warranties, and other relevant documents to be submitted to statutory authorities prior to any required inspection. At the defect management stage, the list of defects will be produced and checked prior to handover of the premises to the Client.

The post-construction phase will include recommending a suitably qualified move contractor to execute the move plan. Such a plan is to ensure minimal disruption to business operations and the move documentation will include floor plans with number referencing, migration schedule with listing of staff names and locations, move guidelines with checklist, and a detailed move schedule. The plan also includes furniture and equipment which will be recycled, communicating with the Client’s staff on move guidelines, and packing/labeling instructions. As for the previous premises, a suitable contractor will be engaged to perform reinstatement works so that the property can be surrendered on time to the landlord. The final accounts and completion certifications will be issued once Client’s approval has been sought.

Arising from the provision of Project Management services, some major benefits include:
a) A single point of accountability drives consistent processes, implements quality control, and serves as a point of escalation which would allow CLIENT to focus on its core business;
b) Ability to manage a transparent procurement process, provide vendor management, implement sustainability practices, and provide a project audit process to evaluate the effectiveness of the project;
c) Deliver cost savings and enable efficient use of capital expenditure.
d) LEED™ Accredited Professionals who effectively understand and manage not only a LEED certification process, but also understand environmental principles
e) Provide premises that are safe and without risk to health and safety. Such a commitment extends to the service provider’s employees, Clients, personnel, visitors, and contractors of the subject property.



By CBRE


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