Air Conditioning

The landlord proposed air conditioning works based on economic life. We proved that the system could operate beyond the balance of our client’s leases and the revised work saved our client £2.55m.

Description

The client held 67% of a 70,000 sq ft modern air conditioned office block located on the periphery of the City of London.

Issues

The landlord had previously started a programme of air conditioning works approximately 2 years prior to our involvement in the building. This work initially included replacement of the central plant but the landlord subsequently proposed the replacement of the remaining air conditioning plant, including the local air handling and distribution units. The landlord’s programme of plant replacement was costed initially at £2.7m and was based on economic life as opposed to condition.

Process

Joint performance and condition testing of the main plant established that the major elements of the air conditioning system (chiller plant, air handling equipment, cooling towers and local VAV boxes) were fully operable, in good condition and able to provide the covenanted services for a period beyond the balance of the client’s leases.

These findings were presented to the managing agent.

Results

The estimated repair and renewal cost, excluding lift works to affect identified repairs, was agreed at circa £149k.

A sinking fund was collected resulting in a reported balance at March 2006 of £818k. Collections continued during 2006 with an estimated balance at September 2006 of £1.2m. We ensured that repair funds were drawn down from the balance of the fund and that the balance was returned to the client.