News & Blogs

15 Feb

The Importance Of Calculating The Value Added To Developments

Luke Axe, Land & Planning Director at Keyland Developments, the property trading arm of Kelda Group and sister-company to Yorkshire Water

The traditional measure of ‘value’ in the development industry is financial and decisions on design, partnership, disposal and acquisition are in most cases dictated by the balance sheet.  It’s just the way it is.  However, with this reality comes an inconvenient truth – by prioritising the financial capital, we very often diminish other forms of ‘value’.  It is these – environment, design quality, health and well-being, access to nature etc which really matter to the people who live in the places we create.  As long as this remains the case, we will never deliver truly sustainable developments that really work for people, society and our planet.

Recognising this, we’ve spent the last few years embedding the Six Capitals model of sustainable development into every aspect of our business, attempting to understand value in a much more holistic sense.  We think that embracing these capitals has enabled us to make better decisions on design, strategy, disposal and partnership.  We are also better equipped to measure the ‘total impact’ of our work, truly maximising the value we create.

Our work with the Six Capitals has led us on a journey that is already delivering some brilliant results, our flagship residential and commercial development at Esholt – recognised as an exemplar approach to planning and development – is just one example.  Our net-zero carbon scheme at our Phase 2 Broomfield Farm, Whitby site is another.  However, this journey has also raised some interesting questions.  One in particular, what if we could quantify and measure the things that make a great place, not only as a means of measuring performance, but also directing what approach is best for a particular site? It is this question and others like it, that have led us to develop our industry leading Six Capitals Valuation Model.

The model incorporates a range of referenced benchmarks from ‘Business As Usual’ (BAU) to ‘Exceptional’ development standards. These benchmarks, combined with geospatial and contextual data regarding the site and local context, are then used collaboratively with our design teams to target and deliver the next generation of ‘exceptional places’ that embody sustainability.  As we progress through the development process we input new information and real-world feedback, enabling our Valuation Model to learn and ensure our next predictions are more accurate and target areas that will increase value the most. Individual site/project assessments can be collated allowing us to track our holistic Six Capitals value generation and identify opportunities across our entire portfolio.

We believe that our Valuation Model represents the most comprehensive assessment of value across the Six Capitals of any developer, being the first to quantify and monetise value across such a broad range of 34 impact categories – spanning carbon dioxide emissions, biodiversity, energy, water, materials, community, quality of place, wellbeing, jobs, skills, resilience, affordability and the local economy. The model allows assumptions to be tested varied and tested by the project team, to understand the impact of a range of project options in terms of Six Capitals value through an intuitive dashboard.

The model allows us to create schemes that address the climate and ecological emergencies, emphasise wellbeing, support a stronger sense of community, create exceptional and resilient places, provide local employment and support good growth. In summary, it’s an incredibly powerful instrument that we, our design teams and partners can deploy to help build for a better, more sustainable future.