Economics, cost and quality from a design perspective

The department of MBE was originally called Real Estate & Project Management (BMVB: ‘Bouwmanagement & Vastgoedbeheer’) covering the domains of construction management and real estate management. The “raison d’être” for this new department was based on the recognition that a fair amount of architecture graduates were more interested in managing a building’s design and construction process than in its actual design. These students, however, were not taught management theories and skills at that time. As a result, they would end up in the construction industry poorly equipped for doing the job they were required to do. This lack in education was addressed by our new department. Our graduates are multi-disciplinary schooled, not only in architectural design, computational design and management theories and skills, but very importantly also in building economics. The research domain Building Economics comprises research on the market and the value of buildings, and the relationship between quality and revenues, and costs and fi nance (Soeter et al., 2009). In the real estate market, the space market is interlinked with the asset market and the construction market. The Building Economy research programme analyses the real estate portfolios of investors. In what type of properties do they invest and what are the returns, risk profi les and outcomes? A crucial aspect in this is the expected rental income. To a large extent, the research focuses on the rent level and return on investment, in connection to location and building characteristics (quality) (see for instance Koppels et al., 2009, 2011). A guideline for studies on costs and quality is the consideration that organisations are interlinked with their location and buildings. An optimal solution for accommodation depends on the selected approach. For example, with a lowest cost approach, a minimum of investment costs, running costs and life-cycle costs are sought after, usually resulting in low values as well. Research on the relationship between cost, quality, and willingness-to-pay is important to understand and steer on costs and quality.