Stranded Assets and the Transition to a Circular Building Economy

The way that we build is changing. While slow in some areas and with a historical delay in the uptake of fundamental innovation and change in procedures and practices, it is nonetheless obvious that the building and construction industry is moving in line with the global trend to more environmentally sustainable and efficient processes.? This transition is shaping up to be one of the fastest and most disruptive industry transformations construction has experienced for decades.

However, at the end of the supply chain, we need to consider - how does this impact the consumer? What happens to a residential client when all of a sudden, their home, often the greatest asset a person or family has, technically becomes a ‘stranded asset’, left behind by forced innovation in construction evolution?

The concept of stranded assets then arises. The Organisation for Economic Cooperation and Development (OECD) quantifies stranded assets as “Energy-using equipment in electricity and other economic activities [which] will have to be retired at an accelerated pace to make space for less carbon-intensive technologies and practices. As climate policies drive this transition, some assets will become ‘stranded’ – i.e. unable to recover their investment cost as intended, with a loss of value for investors.”

While the true value of a home might lie in the land it is situated on, the question remains - how will a consumer recover the cost of their investment in the long run if they find that the standards their home was built to are no longer ‘fit’ or compliant? This is not a new consideration, the Australian housing market is filled with buildings which are sometimes over 100 years old, and traditionally the answer is ‘renovation, renovation, renovation’.

But this is where the crux of the issue lies. With construction costs more than doubling in many cases over the last 12 – 24 months, lead times and project delays compounding and an unprecedented supply demand for housing in Australia combined with a once in a generation industry and technology transition; the traditional answers simply soon may not cut it.

Technologies need to develop which are able to bring stock in line with innovative developments in building technologies and processes. The solution must be adaptable, scalable, and present both financial and quality improvement benefits over traditional renovations.

Construction innovation is expanding at an unprecedented rate in global markets.? However, predominantly these innovations and developments in both processes, technology and supporting inputs are concentrated on future buildings; developing new buildings and new ways to build. There are very few product solutions which are specifically targeted at retrofitting and renovating the existing stock in a financially viable way to ensure that we don’t leave whole suburbs of stranded assets.

Anticipating this tradition, Buildonix? sought to develop a ‘complete solution’ – a technology that can both expand the future of end-to-end construction technologies and practices but also ensure that existing housing stock can rise alongside this industry shift. The key to both is adaptability.

The ability to adapt a completely new structural building system to an existing structure along with any aesthetic finishes a client may want – while still hosting the capability to disassemble and alter that structural fitout delivers substantial opportunities to clients. Not only is our system environmentally friendly – demonstrated by a recent successful Environment Product Declaration (EPD) - but it is also incredibly fast. A Buildonix? Fitout for a residential structure can be done in a matter of hours with a simple lock-in and lockout assembly process.

This innovation has been developed not only to ensure that housing stock in Australia doesn’t get left behind but also to address the staggering waste issues within the Australian construction industry. With close to half of Australia’s landfill waste coming from the construction sector, a technology which allows for seamless, fast and simple fitout and component reuse ticks all the boxes.

Please visit our website for more information www.buildonix.com.au

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