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Article
Publication date: 18 October 2021

Simon Adamtey and James Ogechi Kereri

Residential projects frequently suffer from low-risk management (RM) implementation and, consequently, are more likely to fail to meet performance objectives. With RM…

Abstract

Purpose

Residential projects frequently suffer from low-risk management (RM) implementation and, consequently, are more likely to fail to meet performance objectives. With RM becoming an essential requirement, the purpose of this study is to investigate RM implementation in terms of status, risk analysis techniques, barriers and impact of RM on residential projects across the USA.

Design/methodology/approach

Data were collected from 105 general contractors who had completed 3,265 residential projects in the past five years. Data collection was through a US national survey sent out through emails between August and November 2019 to residential general contractor firms. The firms were randomly selected from national organizations, such as the National Association of Home Builders, Associated General Contractors of America and Associated Builders and Contractors.

Findings

The analysis indicated that RM implementation is still extremely low at 22.27%. However, there was an increase in RM implementation as the cost and duration of projects increased. Direct judgment is the most used technique. Also, the one-sample t-test indicated that the barriers have a significant impact on RM implementation. Multinomial logistic regression results indicated that the impact of lack of management support, lack of money or budget, the complexity of analytical tools and lack of time to perform analysis predict the impact on the overall performance of construction projects. Overall, the results provide empirical evidence, which can influence management’s decision-making regarding RM and improve implementation in residential projects.

Originality/value

There is a lack of empirical evidence on the impact of barriers to RM implementation on the performance of construction projects. This research contributes to the body of knowledge by bridging this gap through a robust analysis of data collected from real residential projects.

Details

Journal of Engineering, Design and Technology , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1726-0531

Keywords

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Article
Publication date: 19 December 2018

Monty Sutrisna, Barry Cooper-Cooke, Jack Goulding and Volkan Ezcan

Offsite construction approaches and methodologies have been proffered a potential solution for controlling “traditional” projects, especially where high levels of…

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1618

Abstract

Purpose

Offsite construction approaches and methodologies have been proffered a potential solution for controlling “traditional” projects, especially where high levels of complexity and uncertainty exist. Given this, locations such as Western Australia (WA), where there are unique housing provision challenges, offsite construction method was considered a potential solution for not only addressing the complexity/uncertainty challenges but also alleviating the housing shortage. However, whilst acknowledging the benefits of offsite construction, recognition was also noted on perceived barriers to its implementation, primarily relating to cost uncertainty. This recognition is exacerbated by very limited offsite construction cost data and information available in the public domain. In response to this, this paper sims to provide detailed cost analysis of three offsite construction projects in WA.

Design/methodology/approach

To hold parameters constant and facilitate cross-case comparative analysis, data were collected from three embedded case studies from three residential housing projects in WA. These projects represent the most contemporary implementation of offsite in WA; where two were completed in 2016/2017 and the third project was still ongoing during the data collection of this research. The research methodological approach and accompanying data analysis component engaged a variety of techniques, which was supported by archival study of project data and evidence gathered from the offsite construction provider.

Findings

Core findings revealed three emerging themes from residential offsite construction projects pertinent to cost. Specifically, the overall cost of delivering residential housing project with offsite construction techniques, the cost variability of offsite construction residential housing projects as impacted by uncertainties and the cash flow of residential offsite construction projects based on the payment term. These three major cost drivers are elucidated in this paper.

Originality/value

This research presents new cost insights to complement the wider adoption of offsite construction techniques. It presents additional information to address the limited cost data and information of offsite construction projects available in the public domain particularly for residential housing projects (within the bounded context of WA). It also highlights the further stages needed to enhance data validity, cognisant of universal generalisability and repeatability, market maturity and stakeholder supply chains.

Details

International Journal of Housing Markets and Analysis, vol. 12 no. 1
Type: Research Article
ISSN: 1753-8270

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Article
Publication date: 5 November 2021

Ardalan Marandi Alamdari, Younis Jabarzadeh, Daniel Samson and Naser Sanoubar

Green construction has begun implementing sustainable and environmentally friendly practices, but there has not yet been an assessment for green construction supply chain…

Abstract

Purpose

Green construction has begun implementing sustainable and environmentally friendly practices, but there has not yet been an assessment for green construction supply chain risks in the literature. Identification and assessment of potential risks will result in more appropriate risk mitigation strategies to overcome disruptions affecting higher performance. Thus, this study aims to identify green construction supply chain risks of residential mega-projects.

Design/methodology/approach

Interpretive structural modeling (ISM) provided a hierarchical model composed of seven layers that elucidated the driving influences between the elements. Matrice d’impacts croises-multiplication appliqúe an classement (MICMAC) analysis classified the elements into the driver, linkage and dependent variables based on their dependence and driving powers, providing a clearer understanding of risk factors and their influential characteristics. Using experts' knowledge and experience is compatible with the subjective nature of ‘supply chain risks’ and is more suitable while collecting pertinent quantitative data which is far more challenging.

Findings

Tenable output, using an international expert group, addressed key risk factors. Technical expertise and skilled labor, key customers, and corporate culture are found as elements with most driving power, and the final product and logistics coordination and supply chain configuration found as the most dependent risk factors. Managerial implications addressed the most fundamental risk sources and suggested practical proactive risk management approaches to maximize green supply chain performance.

Originality/value

Identified supply chain oriented key risk factors of the residential green mega projects add novelty to the context of green construction projects' supply chain management. And eliciting the influential relations of the key risk factors provide a bigger picture of key risks in green residential mega projects that can be extended by sub-risks related to process activities. Assessing supply chain risks' interactions in the context of green residential mega projects is a novel contribution to mega construction-project management's body of knowledge. Also, the key risk factors were categorized based on the characteristics known as driving power and dependence.

Details

Engineering, Construction and Architectural Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 1 April 2004

Parviz A. Koushki and Nabil Kartam

The construction of residential projects constitutes a major portion of the building activities in the State of Kuwait. This paper presents the findings of a research…

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3505

Abstract

The construction of residential projects constitutes a major portion of the building activities in the State of Kuwait. This paper presents the findings of a research project, which aims to determine the causes of delays and cost‐overruns in the construction of housing projects in Kuwait. The owners of 450 residential projects (just completed or near completion), spread over 27 systematic‐randomly selected metropolitan districts, were personally interviewed. Data on owners' socio‐demographic traits and project characteristics, including those involving time and cost overruns, were obtained. The paper highlights the impacts of construction materials on time‐delays and cost‐increases. Project‐related variables affecting the on‐time delivery of materials to the construction site are examined and quantified. The material selection‐time, type of materials, their availability in the local market and the presence of a supervising engineer, all demonstrated a statistically significant impact on the on‐time delivery of materials to construction sites.

Details

Engineering, Construction and Architectural Management, vol. 11 no. 2
Type: Research Article
ISSN: 0969-9988

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Article
Publication date: 4 April 2016

Brendon Lim, Madhav P. Nepal, Martin Skitmore and Bo Xiong

Preliminary cost estimates for construction projects are often the basis of financial feasibility and budgeting decisions in the early stages of planning and for effective…

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1639

Abstract

Purpose

Preliminary cost estimates for construction projects are often the basis of financial feasibility and budgeting decisions in the early stages of planning and for effective project control, monitoring and execution. The purpose of this paper is to identify and better understand the cost drivers and factors that contribute to the accuracy of estimates in residential construction projects from the developers’ perspective.

Design/methodology/approach

The paper uses a literature review to determine the drivers that affect the accuracy of developers’ early stage cost estimates and the factors influencing the construction costs of residential construction projects. It used cost variance data and other supporting documentation collected from two case study projects in South East Queensland, Australia, along with semi-structured interviews conducted with the practitioners involved.

Findings

It is found that many cost drivers or factors of cost uncertainty identified in the literature for large-scale projects are not as apparent and relevant for developers’ small-scale residential construction projects. Specifically, the certainty and completeness of project-specific information, suitability of historical cost data, contingency allowances, methods of estimating and the estimator’s level of experience significantly affect the accuracy of cost estimates. Developers of small-scale residential projects use pre-established and suitably priced bills of quantities as the prime estimating method, which is considered to be the most efficient and accurate method for standard house designs. However, this method needs to be backed with the expertise and experience of the estimator.

Originality/value

There is a lack of research on the accuracy of developers’ early stage cost estimates and the relevance and applicability of cost drivers and factors in the residential construction projects. This research has practical significance for improving the accuracy of such preliminary cost estimates.

Details

Journal of Financial Management of Property and Construction, vol. 21 no. 1
Type: Research Article
ISSN: 1366-4387

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Article
Publication date: 3 April 2007

Vivian W.Y. Tam, C.M. Tam and William C.Y. Ng

The use of prefabrication has been considered as one of the most effective waste minimization methods in the construction context; however, the industry has found…

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5391

Abstract

Purpose

The use of prefabrication has been considered as one of the most effective waste minimization methods in the construction context; however, the industry has found difficulties to implement it. Contractors lack experience in using prefabrication and they do not know how to implement prefabrication to their projects effectively. The purpose of this paper is to present the findings of a study on the implementation of prefabrication in the context of different project types and procurement approaches.

Design/methodology/approach

This paper examines possible project types and procurement methods to maximally gain benefits of using prefabricated building components. A questionnaire survey and structured interviews have been conducted.

Findings

From the results, it should be noted that residential projects and design and build procurement methods are the most effective project types and procurement methods, respectively, in using prefabrication. In the interview discussion, one of the governmental employees highlighted that about 65 percent of projects are residential projects. The high supply of residential housing suits fast population growth in Hong Kong. The interviewee also explained that shortening construction period is one of the main goals in their projects. Furthermore, an interviewed main contractor highlighted that the involvement of contractors at the early design stage in a project can bring advantages in considering construction methods before project commencement on site and to improve project constructability. An interviewed subcontractor also explained that the involvement of construction organizations in the design stage can effectively improve the use of prefabrication in major activities including concreting, plastering and formworking, rather than wet‐trade construction activities. Therefore, the use of standardized designs and prefabricated building components are highly encouraged.

Originality/value

This brings early considerations and suggestions to project parties to improve prefabrication implementation. The effects of prefabrication implementation are also considered.

Details

Journal of Engineering, Design and Technology, vol. 5 no. 1
Type: Research Article
ISSN: 1726-0531

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Article
Publication date: 1 June 2010

Hao Wu and Chuan Chen

The purpose of this paper is to investigate the transformation of inner‐city sites previously developed for industry use in Chinese city, which is driven by the unique…

Abstract

Purpose

The purpose of this paper is to investigate the transformation of inner‐city sites previously developed for industry use in Chinese city, which is driven by the unique social, economic and political settings in China featured by the emergence of the market mechanism for urban land use. The existing body of knowledge about urban brownfields suggests a lack of understanding and information about the transition‐led inner‐city brownfield development in China.

Design/methodology/approach

This paper adopts a case study approach using the R&F high‐density apartment project in the inner‐city of Guangzhou built on a former chemically polluted site to provide factual evidence for the state of inner‐city brownfield development in China. The paper identifies institutions, processes and practices that are related to the reclamation of inner‐city brownfield sites for high‐density residential use and preliminarily assesses its impact.

Findings

The paper suggests that, although issues about environmental impact appear to be carefully treated during the project execution, much less care is given to pre‐construction and post‐occupancy phases. There is also a serious lack of specific standards and policies that are designed for governing the issues directly related to inner‐city brownfield development. This could have substantial impact on the land use in China's major cities, but it has not been paid sufficient attention.

Practical implications

This paper shows that there is an urgent need to design and develop policy and industry standards specifically address inner‐city brownfield development.

Originality/value

The paper confirms the need for more careful treatment to inner‐city brownfield projects that are being “fast tracked” due to the pressure for high‐speed economic growth and the demand for inner‐city housing. This paper also contributes to the initiation of basic criteria that help identify inner‐city brownfield projects for more comprehensive investigation to further evaluate impacts of China's economic transition on its urban built environment.

Details

International Journal of Housing Markets and Analysis, vol. 3 no. 2
Type: Research Article
ISSN: 1753-8270

Keywords

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Article
Publication date: 20 July 2010

Terry V. Grissom, James N. Berry and Lay Cheng J. Lim

The purpose of this paper is to integrate land use and option pricing theories using case study analyses to compare a portfolio of uses comprising single and mixed‐use…

Abstract

Purpose

The purpose of this paper is to integrate land use and option pricing theories using case study analyses to compare a portfolio of uses comprising single and mixed‐use development on the same site and assess the effects on the risk‐return profile of potential development schemes. The integration of land use development based on highest and best use (HBU) is tested against a combination of uses on the selected sites at a point in time in the downswing of the real estate cycle.

Design/methodology/approach

The proposed methodology integrates the development valuation approach with option theory in which both consider the relationships of cost and value associated with alternative development options. The approach used in this paper addresses the broader consideration of project coordination inclusive of land use flexibility and opportunity costs endogenously associated with development strategies. By investigating the uncertainty of economic options specific to the development process, the methodology considers the significance of complementary components of strategic decisions and entrepreneurial effort within a return/risk management strategy.

Findings

The stochastic model when compared to the real option model enhances strategic decisions and development project management by allowing the consideration of single/mixed‐use alternatives. The development process is facilitated by the research findings whereby alternative uses are tested to maximise the potential use of the site. The analyses consider optimal funding strategies in developing and investing for a range of use options on regeneration sites.

Practical implications

The significant insights apparent from the research is the quantification of the strategic specification of development as a productive process and an investment endeavour. The proposed model enables a comparison of a HBU based on a single development, a mixed‐use development or a combination of uses as the difference between the scenarios impacts on land value and profit measures, especially where these measures are calculated as distributive residuals.

Originality/value

The stochastic model developed in this paper provides a value‐added contribution to real estate literature by considering the complexity of the interrelationships between urban land economics, land use theory, valuation appraisal methodologies, portfolio analysis and option pricing as applied in the development of regeneration schemes.

Details

Journal of European Real Estate Research, vol. 3 no. 2
Type: Research Article
ISSN: 1753-9269

Keywords

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Case study
Publication date: 20 January 2017

Anton S. Ovchinnikov and Elena Loutskina

In the early months of the 2007-08 financial crises, a loan manager faces a real estate financing decision. Should he approve a bullet structure three-year loan to a…

Abstract

In the early months of the 2007-08 financial crises, a loan manager faces a real estate financing decision. Should he approve a bullet structure three-year loan to a longstanding client, a legendary Texan developer? The developer, who near retirement downsized his business, is seeking financing for his only project: residential or commercial development on an attractive piece of land in suburban Houston. The loan manager considers the decision in light of the mortgage market turmoil, seeing commercial projects as safer, but also factoring that the residential market could bring higher returns if the market stabilizes soon. The manager collects the data and asks an analyst to assess the risks; that ultimately requires assessing the economics of both projects from both the bank's and the developer's perspectives. The bank could still change the interest rate on the loan to receive adequate compensation for the risk it carries, but the loan manager knows that doing so will change their long-term client willingness to take on the loan.

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Case study
Publication date: 14 December 2007

Anton Ovchinnikov, Elena Loutskina, Casey Lichtendahl, Jayson Lipsey and Brian Burke

In the early months of the 2007-08 financial crises, a loan manager faces a real estate financing decision. Should he approve a bullet structure three-year loan to a…

Abstract

In the early months of the 2007-08 financial crises, a loan manager faces a real estate financing decision. Should he approve a bullet structure three-year loan to a longstanding client, a legendary Texan developer? The developer, who near retirement downsized his business, is seeking financing for his only project: residential or commercial development on an attractive piece of land in suburban Houston. The loan manager considers the decision in light of the mortgage market turmoil, seeing commercial projects as safer, but also factoring that the residential market could bring higher returns if the market stabilizes soon. The manager collects the data and asks an analyst to assess the risks; that ultimately requires assessing the economics of both projects from both the bank’s and the developer’s perspectives. The bank could still change the interest rate on the loan to receive adequate compensation for the risk it carries, but the loan manager knows that doing so will change their long-term client willingness to take on the loan.

Details

Darden Business Publishing Cases, vol. no.
Type: Case Study
ISSN: 2474-7890
Published by: University of Virginia Darden School Foundation

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