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When Colliers International entered the real estate market of the Baltic States, it found that there were no objective tools for determining the quality of buildings in the marketplace. Colliers International was the first company in the market to develop a strict system of classification and understanding of the quality of buildings. Soon we realised, however, that this was not enough. A new system of classification has now been developed – one that is much more powerful, detailed and suited for the local specifics.
The new classification system takes into account multiple factors which influence the quality of a building. The system is quite simple – each building’s feature (or lack thereof) represents a certain number of points. The total number of points is determined on a basis of a special formula that depends on the combination of features. Once the number of points is determined, this provides an integrative insight into the building’s quality.
During the process, we encountered several complex and unusual problems. An array of different spheres, self-consistent sciences and varied areas of knowledge must be combined in this process. The resulting classification system is the product of many scientists from the different relevant fields of activity.
There are two levels of detail (and, therefore, two levels of complexity) in the classification system. The basic level maintains the structure of the former system – there are one-and-a-half dozen parameters which are used to assess the value of a building. Not all of these are of equal importance, however – each parameter has its own weight in terms of determining the building’s value. That is the primary way in which the new system is different than the former one. The weight of parameters has been determined as follows:
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The class of each building is determined on the basis of the total sum of points, with each parameter being weighted in relation to the total maximum sum. In order to get a Class A status, a building have to comply with more than 80 points; Class B1 - 70,1 - 80 points; Class B2 - 60-70 points.
The second, more detailed level determines how many points a building receives in terms of each parameter, i.e., it defines the quality of each parameter. The most important parameter, for instance, is the building’s location. It is very important for the building to be located in an existing or future area of business activities, with comfortable access and a good infrastructure. An excellent location gains 10 points in this category, a mediocre one gains five points, while a poor location receives no points at all. Colliers consultants have developed a map of Rīga which shows those areas that are attractive for office premises. Differences among the various areas can be very slight and comprise a mere 1%. This should, however, provide an ideal of how thorough, integrated and detailed this new system of classification really is.
Map of the most attractive areas for office buildings – the darker the colour, the better the location.
This detailed method is used with respect to every parameter. Another example focuses on the availability of a Building Management System (BMS) at a building. Buildings can receive as many as five points for the BMS, depending on its quality. This also depends on the services that the BMS offers – is it a basic system, or does it provide auxiliary services? Does it offer services such as monitoring, automatic and manual remote control, accumulation and storage of information, auxiliary reporting systems, notification of routine maintenance, the scheduled work of certain systems, autonomous regulations for on-site controllers, etc.
Calculations concerning the quality estimation related to each parameter are complicated and more suitable for “in-house use”, e.g. in those cases when a client wants to understand how we assessed the value of the building in which they are interested.
About Colliers International
With 250 offices in 50 countries Colliers International is one of the leading real estate companies in the world. Today Colliers International operates in all three Baltic States, challenging the region’s real estate sector by serving as a unique “one-stop” real estate agency providing its customers with a full range of services in commercial real estate, including the implementation of investment projects in the real estate sector, lease and sales of offices, retail and warehouse premises, as well as conception development, research and market analysis, consulting, real estate property valuation and other services.
More information:
Margita Otto
Director of Marketing & PR Department
Colliers International, Baltic States
Tel.: (+371) 778 3333
Fax: (+371) 778 3334
Mob. tel.: (+371) 2917 3173
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