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The Impact of Insulation Specifications on the ROI of Internal Floor Area and Roofing Retrofits
The usable space within a building is a fundamental metric in understanding the valuation, and also the investment potential, of real estate.
Properties with greater internal floor area command higher rents, in addition to higher overall financial values and, therefore, give rise to a greater Return on Investment (ROI).
As codes and regulations continue to target energy consumption and CO2 emissions, buildings are being subjected to increasingly higher energy performance standards. New codes may include requirements for the building envelope that can lead to an increase in the wall insulation thickness required to achieve the specified thermal performance and, therefore, a corresponding decrease in marketable internal floor area.
Increased Energy Performance Standards and Wall Thickness
Poorer performing insulation materials (those with a lower R-value per inch), can exacerbate the ever-diminishing indoor space, particularly in buildings limited by a fixed footprint. Over time, this can erode the financial value, thus investment potential, of a building.
However, premium performing insulation materials (i.e. those with a higher R-value per inch) can provide some relief, since a lower thermal conductivity can result in thinner insulation. A thinner insulation can result in thinner external wall construction, and an increased internal square footage.
With an R-value of 16 on two inches, Kingspan Kooltherm premium performance insulation has a higher R-value than any commonly used insulation. The width of external walls incorporating Kooltherm insulation is thinner than comparative solutions - providing internal space gains without increasing the overall designed footprint of a building.
Quantifying ROI of Premium Insulation in Walls
Kingspan commissioned Currie & Brown to investigate the "Real Value of Space in Commercial Real Estate". They developed a research program to analyze a database of over 70,416 commercial buildings generated from a model that considered a range of physical and financial building characteristics, and analyzed several real case study buildings to compare to the calculation method used for the database buildings. The analysis considered both a range of building characteristics (e.g. size and shape) and a range of commercial variables (e.g. geographical location, rental value and material cost), that are representative of modern-day commercial buildings...