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The characteristics of refurbishment projects in Malaysia


Azlan Shah Ali, Syahrul Nizam Kamaruzzaman and Hafez Salleh
Faculty of the Built Environment, University Malaya, Kuala Lumpur, Malaysia
Abstract
Purpose The main objectives of this paper are to identify general characteristics of refurbishment projects and problems arise in Malaysian context. Design/methodology/approach Quantitative and qualitative approaches using postal questionnaire survey and semi-structured interviews were used in data collection. A total of 1,552 questionnaire sets sent to professional architects. Findings The results show that the majority of refurbishment projects in Malaysia involved residential and ofce types of building with contract value less than RM500,000.00 (USD 150,000.00). Some of major problem in refurbishment projects are inconsistence in clients needs, refurbishment projects exceed targeted costs and times. Research limitations/implications The literature search and survey results showed that systematic studies into the refurbishment were relatively sparse. Therefore, more detail study gear towards refurbishment area is needed for Malaysian construction industry in the future. The ndings provide general overview of refurbishment projects in Malaysia, which could help intrested researchers to have indications on the refurbishment activities. Originality/value Survey results provided important information about the general proles of refurbishment projects in Malaysia. This will helps other researchers who are interested to identify focus area that needs further investigation in refurbishment works. Keywords Buildings, Performance management Paper type Research paper

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Received April 2008 Accepted July 2008

Facilities Vol. 27 No. 1/2, 2009 pp. 56-65 q Emerald Group Publishing Limited 0263-2772 DOI 10.1108/02632770910923090

1. Introduction Refurbishment refers to upgrade, major repairs work, renovations, alterations, conversions, extensions and modernization of existing building, but exclude routine maintenance and cleaning work (Quah, 1988). Refurbishment project is risky, complex and less predictable task within the construction industry (Egbu, 1994; Rahmat, 1997; Rayers and Manseld, 2001; McLennan et al. 1998). However, refurbishment projects had grown rapidly in the UK for the last 30 years. The trend is now spreading over to Malaysia. However, there is no comprehensive and accurate data on the value of refurbishment work in Malaysia. Most local authorities do not have complete database on the actual number of refurbishment works being carried out. The only available data has been compiled by the Malaysian Construction Industry Development Board (CIDB). The data shows that repair and maintenance, which normally used by practitioners as a guide on the value of refurbishment work, accounted for 2 percent of total construction output in the year 2002. It rose up to approximately 16 percent of total construction output in year 2006 (Malaysian CIDB,

2007). This indicates that the demand for refurbishment projects in this country is high and grows rapidly. The data however, does not include illegal renovation works carried out by house owners or by unregistered contractors. Therefore, the actual value of refurbishment works is probably much larger. Furthermore, the President of The Chartered Institute of Building, Malaysia in his speech at the 25th annual general meeting of the institute mentioned that repair and maintenance work (which includes refurbishment activity) has tremendous opportunity for growth in Malaysian construction industry. The existing buildings are getting old, so the maintenance and refurbishment work needs to be carried out in order to prolong the life of the building. With Malaysian construction trends normally follow the trends of developed countries, it is anticipated that refurbishment sector will expand in Malaysia. This is mainly due to increasing number of ageing buildings, limited vacant land for new development and technological change, especially the use of information communication technology (Rahmat et al., 2003). Hence, the refurbishment sector is likely become an important sector in the Malaysian construction industry. The growing importance of refurbishment sector, the difculty of managing the project, poor project performance and the lack of research in this area (Young et al., 1996) provide impetus to investigate on the characteristics of refurbishment activities in Malaysia. 2. Factors inuencing the growth of the refurbishment sector Refurbishment works become an alternative when a building has reach to the end of its service life, or fails to perform as required in its use. However, refurbishment works inuenced by a buildings physical deterioration, and obsolescence such as change in use, economic change, investment decisions, historical value and change in condition Aikivuori (1996). Similarly, Flanagan et al. (1989) noted that building refurbishment is initiated by physical deterioration and obsolescence, which includes change in technology, social, image, legal and environment. Through observation, many buildings in Malaysia are under-or wrongly used (Hamilton, 2003). This would induce the building to become dilapidated. The lack of maintenance coupled with social problems, which can lead to vandalism and abuse increase the rate of wear and tear of buildings. The building owners could have the option to move out from the premise and build a new one on a different location, rebuild the building on the same site or refurbish the existing building. However, which option is taken is inuenced by the following factors. Economic recession, such as that experienced from in 1997 to 1999, may force the building owners to conserve their building. Financial crisis during the recession forces the government to cut expenditure on new construction, which reduces the total output of new work during that period. This encourages building owners to give priority to improve their existing building stock rather than undertake new developments. Furthermore, limited land for development in strategic areas coupled with high land prices makes new construction expensive. As a result, many building owners realize that refurbishment is the best option. However, Aikivuori (1996) have emphasized that the major reasons for refurbishment are not due to the economic cycle, but rather are due to deterioration and obsolescence. Building deterioration is generally associated with one of the causes like dampness, bio-decay and movement (Addleson and Rice, 1991). Unfortunately, all buildings are

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exposed to these effects (Douglas, 2004). Dampness causes condensation. Dry rot causes bio-decay and subsidence causes movement. Exposure to the environment causes carbonation and corrosion of the reinforcement bars. Moisture content could cause dampness in the building. In addition, vegetation grows in damp oors, especially on the building aprons. The parameter drain tends to become clogged after a few months. Movement, due to vegetation growth could cause cracks in walls. These processes normally affect the exterior facade of building, followed by the interior. Cracks in walls could lead to the occurrence of dampness inside the building (Hollis and Gibson, 2004). Obsolescence is the process of an asset going out of use, which indicates the tendency for the objects and operations to become out-of-date or old-fashioned (Douglas, 2004). Old buildings that were completed in the 1960s and 1970s generally have no extra space for additional new communication systems. Technological change makes the existing building system become obsolete faster. The needs for the building to accommodate the latest automation and electronic systems require the building owners to refurbish their buildings. The complexity of modern building automation systems requires sensitive design, particularly on their services layout. This is important for business organizations to provide better building equipment, quality workspace for their staff and a high standard of building appearance to enhance the buildings position in the city (Watkins, 1996). Refurbishment is an option to meet the change of demand of a building necessitated by the installation of modern facilities (CIRIA, 1994). Furthermore, information technology has changed the demand of new premises and the working environment of many people (Kincaid, 2003). The ability of IT to communicate from a long distance effectively and to gather information instantly means that there is no need for people to meet in person (Kartam, 1999). Hence, working from a premise has become more common. Thus, the complete IT facilities with later technology installed in the premises to accommodate the function required create a greater demand for refurbishment. Even though these factors contribute to the growth of refurbishment projects, the performance of the projects is mostly unsatisfactory. Refurbishment projects are generally more uncertain than other construction projects (Quah, 1988; Rayers and Manseld, 2001). Refurbishment projects are mostly completed with high cost and time variances. Some of the main factors contributing to this problem are late discovery of design information, different type of procurement method used, different in project size and inconsistence clients brief through out the projects period (Rahmat, 1997). However, research on performance of refurbishment projects in Malaysia is still inconclusive. More ndings are needed to support this statement. 3. Research methodology A questionnaire survey and semi-structured interviews were conducted for the data collection process. According to Robson (1993), the survey method is one of the ways to obtain a standard and stable collection of data from a specic population. This approach was employed in this study because of the size of population and the geographical spread that covered the whole country. As a consequence of the size and scale, a mail questionnaire survey was identied as the most suitable method, by which respondents could be approached more easily with minimum cost (Sarantakos, 1988). The mail survey was not only the easiest approach to obtain research data, it has

also been identied as the most popular method in Malaysia, even though chances of obtaining good response rate are very low (Ahmad, 2003). The second stage of the study involved semi-structured interviews. This in order to clarify some of ambiguous answers received in the questionnaire survey and main problems in managing refurbishment projects. Interviews could help substantially to have in-depth discussions on the scope and to gather any other additional information, which had been overlooked during the literature review and the questionnaire survey. Respondents for the present study consisted of professional architects who are registered with Board of Architects Malaysia (BOAM). In Malaysia, architects are normally involved in the design process of refurbishment projects, beginning from inception, schematic design phase, detailed design, submission of drawings for approval from relevant authorities, contract preparation and implementation on site. Architects play important roles as the design teams leader, which controls and monitors all design activities for refurbishment projects. Hence, all questions asked and information required with regards to this study could be obtained from the architects. In order to obtain a higher response rate, the questionnaire was designed to be only three pages long. The questionnaire used a simple presentation that would not take long for the respondents to answer. In the questionnaire, space was provided for the respondents to give their comments related to the study. Before the questionnaires was sent out to the respondents, it was piloted on ve potential respondents, including research supervisors, lecturer colleagues from the University of Malaya and architects to avoid any ambiguous words and sentences. Some of the comments and suggestions from the pilot survey were taken into consideration before the actual distribution of the questionnaires was made. A period of two months was allocated to receive replies. Complete ltration was made of the 398 returned questionnaires, and 354 questionnaires were found to be useful for data analysis, giving a nal response rate of approximately 24 percent. A total of 44 completed questionnaires were rejected due to the respondents did not involved directly with refurbishment work and respondents who did not follow the instructions given in the questionnaire. The summary of the details pertaining to the administration of the preliminary questionnaire survey are shown in Table I. The valid response rate recorded around 24 percent, which is acceptable for a social science study in Malaysia. Respondents who did not reply to the questionnaire probably did not have experience in refurbishment projects. There is no exact response rate that could be used to be representative of the population, and it depends on many factors (Sarantakos, 1988). However, Krejcie and Morgan (1970) who determined the sample size using a table noted that if the population is 1,600, the minimum sample size

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Description Number of questionnaire sent out Total returned questionnaires Questionnaire sets returned unopened Questionnaire returned without answers Questionnaires answered, but which were rejected Overall percentage returned Valid percentage returned

Frequencies 1,552 398 32 5 39 30.54 23.98

Table I. The questionnaire survey

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should not be less than 310. In the present study, the response rate of 354 could be justied as representing the total population. For data transformation purposes in the questionnaire survey, the Software Package of Social Science (SPSS) version 13.0 was used for data analysis. Descriptive statistics methods such as frequency tables and cross tabulation tables were used for the purpose of data analysis. Findings from the questionnaire survey showed that almost 80 percent of the respondents were principal architects and 95 percent of them had more that ten years experience in construction industries as shown in Table II and Table III. The results indicated that the data collected from this survey are reliable. 4. Data analysis and discussion The literature search and questionnaire survey results revealed that refurbishment project was one of the most difcult task compared with new-build projects. Table IV shows that 87.6 percent of the respondents agreed that refurbishment projects are more difcult than new-build. This could be because projects site that involved existing building might have limitation on certain aspects such as access to the site, working time and material used in the projects. In general, the majority of the architectural rms were not considered refurbishment projects as their core business. Result in Table V shows that only 9 percent of the architects working with the rm that refurbishment projects more than 50 percent. Since refurbishment projects tend to be small, they do not constitute as a major source of revenue to the architects rms. Only four architectural rms depend nancially on refurbishment projects, which collected more than half of their revenue from refurbishment and they tend to be small.
Designation Principal Senior Architect Architect Others Total Percentage, N 354 79.3 10.7 4.7 5.4 100

Table II. Architects job title

Length of experience Table III. Architects experience in construction 3-5 years 6-10 years . 10 years Total

Percentage, N 354 1.0 4.0 95.0 100

Table IV. Architects Opinion on the degree of difculties of refurbishment design

Items Architects opinion

Refurbishment design difculty, N 339 Yes No 87.6 12.4

Respondents were asked to indicate main problems during handling refurbishment projects using a four-point scale from very low to very high. The average mean readings show in Table VI indicate that clients needs ranked rst followed by variables exceeded project time and cost. This could be different degree of priority given by the clients to their projects. Some of the clients want the refurbishment project leads to be commercially successful; it must be able to present operative advantages in terms of physical attractiveness, efcient layout and management as well as rental and nancial benets to the occupants. On the other hands, some of the clients, the objective of having refurbishment work is to upgrade the image of building in total and maximise his return in investment. This needs to be clearly spelt out in the contract document. Inaccuracy of scope of work in refurbishment projects could cause the design frequently changed to cater new requirements from the clients. The participation of the client and collaboration with the other consultants could minimize uncertainty concerning the scope of work in refurbishment projects. Table VI also shows that time and cost allocated for refurbishment projects always exceeded. The result implies the need for greater accuracy in the estimation of cost during pre-bid stage of refurbishment projects. More allocation to risk and uncertainty needs to be considered during the costing. Overhead costs could easily increase if direct costs to the design work unintentionally rise. Changes in design could contribute to an increased number of meetings, contacts and costs in reproducing the amended design. Hence, the uncertainty aspect in design information needs to be eliminated by stepping up the information processing capacity of the design teams members. On the other hand, time is normally related to the amount of work that needs to be completed. The result implies the need to have a clear scope of work in the refurbishment design process. The participation of the client and collaboration with the architects could minimize uncertainty concerning the scope of work in refurbishment projects. Furthermore, since refurbishment sector is in growing process, it is believed that lack of experience and understanding about the refurbishment projects could be the main

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Number of employees ,5 5-19 20-50 . 50

, 50% 18 54 15 9

% Turn over, N 354 . 50% 2 1 1 0

Total 20.0 55.0 16.0 9.0

Table V. Cross Tabulation for the size of company and the percentage of turnover from refurbishment projects

Number 1 2 3 4 5

Variables Clients Needs Exceed targeted time Exceed targeted cost More likely to change Procurement System

Mean, N 354 3.67 3.04 3.04 3.08 2.86

Rank 1 2 2 4 5 Table VI. Mean value for independent variables associated with the managing refurbishment project

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factors contributing to the lack of control in design time for refurbishment projects in Malaysia. Rahmat (1997) noted that type of building is one of the factors that contribute to the difculties in refurbishment projects. The refurbishment of a hospital is perceived to be the most complex and uncertain (Egbu, 1994). Results shown in Table VII indicate that the residential and ofce are identied the most frequent types of buildings in refurbishment projects. More that 60 percent of the architects involved in these types of building. It is argued that the different types of building would determine the degree of difculties of the refurbishment projects. The Krusikal-Wallis technique employed in the present study found that there were no signicant differences for all responses to the projects variables. From the result obtained, it is concluded that different types of building did not represent different degrees of uncertainty. In the semi-structured interview, nine principal architects in the Klang Valley revealed that the difculties in refurbishment projects could be caused by many factors. Thus, it would be unwise to point to a specic reason that represents all refurbishment projects. The nature of each of the refurbishment projects is different and should be approach in a different way. The hospital type of building has been highlighted as the most uncertain type due to the high services contents compared with other types of buildings. However, if the refurbishment scope of work in the hospital does not deal with services work, the degree of uncertainty would be less. Similarly, in other types of building, if the scope of work includes more services parts, the project would be more difcult. Table VIII presents the location of the previous refurbishment projects in Malaysia. The majority of the refurbishment projects were located in Kuala Lumpur with 47.2 percent, followed by Selangor and Pulau Pinang with 31.6 and 13.7 percent respectively. The trends could be inuenced by the economic activities of the refurbished building such as changing corporate image or business sectors for the ofce type, whereas for residential refurbishment could be due to change of owners preference. Besides Kuala Lumpur and Selangor, the pattern shows that refurbishment projects are scattered around the whole country. The difculties of refurbishment projects also depend on size of projects (Rahmat, 1997). Results obtained from the survey in Table IX show that refurbishment project size between 500,000 to 2 million is most popular with more than 50 percent. Refurbishment projects more that 2 million is few implemented in this country with less than 15 percent. Therefore, it could be said that refurbishment projects in Malaysia tend to be small in size; thus, the majority were valued at less than two million and about one-third were less than RM 500,000.00.
Types of building Residential Ofce Factory Hotel Hospital Education Institution Shops Others Percentage (N 354) 62.7 61.6 20.9 15.5 10.7 18.1 32.2 15.0

Table VII. Type of refurbishment project carried out by professional architects

Types of building Kuala Lumpur Selangor Pulau Pinang Johor Sarawak Sabah Perak Kedah Negri Sembilan Melaka Pahang Terengganu Kelantan Perlis

Percentage (N 354) 47.2 31.6 13.6 11.6 9.9 7.9 7.6 6.8 6.5 4.5 4.5 4.2 3.1 2.5

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Table VIII. Location of the previous refurbishment projects in Malaysia

Size of project (RM) , 500,000 500,001 to 2,000,000 2,000,001 to 5,000,000 . 5,000,000

Percentage (N 354) 39.0 36.7 16.0 14.3 Table IX. Size of refurbishment projects designed by professional architects

In semi-structured interviews, ve principals and two senior architects in Kuala Lumpur mentioned that the smallest architects rms were more likely to carry out refurbishment projects due to the fast turned over of the projects. Furthermore, the return on refurbishment projects was more attractive if the architect is experienced enough to manage the projects. The Wilcoxons sign rank test was employed to detect signicant difference concerning the original and nal contract value for the refurbishment projects. The result indicated that there are signicant differences between these two contract values. The nal contract value for most of the refurbishment projects was higher than the original. This indicates that the majority of refurbishment projects ended up with additional cost. Furthermore, the percentage of additional cost is scattered and does not depending on the size of refurbishment projects. Therefore, size of projects most likely does not represent the difculties of refurbishment projects. The results in Table X indicate that the traditional procurement system is the most preferred in Malaysia, followed by design-and-build system. Other types of
Procurement methods Traditional Design and build Construction management Management contracting Others Percentage (N 354) 79.1 23.7 6.8 3.1 1.1 Table X. Type of procurement system used in refurbishment projects

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procurement systems, including construction management and management contracting are minimal, constituting only about 10 percent of the total. Not many architects have experience in these types of procurement methods. This result reconrms the nding of Rahmat (1997) in the UK who discovered an almost similar result. Therefore, research in refurbishment area needs to focus more on traditional and design-and-build procurement systems because the likelihood of obtaining information about projects using other procurement systems was very limited. The result also implies that the clients are more familiar with traditional procurement system; besides it is less risky to them. However, the traditional procurement system has the less integration of key personnel compared with the design-and-build approach. The importance of integration for the key participants in handling refurbishment projects is due to the fragmented nature of refurbishment projects and also to improve design information-processing capacity among them. Therefore, design-and-build system could be the best option to achieve integration, particularly between the contractor and the design team, as indicated by Rahmat (1997). 5. Conclusion In conclusion, the questionnaire survey results and the semi-structured interviews provided important information about the general proles of refurbishment projects in Malaysia. A total of 354 architects were identied as having experience in refurbishment project and a majority of them were principal architects. Refurbishment projects with a size less than RM 2 million and implemented using a traditional procurement system were the most preferable. The questionnaire survey showed that clients needs, time and cost escalated were the main problems in refurbishment projects. The literature search and survey results showed that systematic studies into the refurbishment were relatively sparse. Therefore, more detail study in refurbishment area is needed for Malaysian construction industry in the future.
References Addleson, L. and Rice, C. (1991), Performance of Materials in Building, Butterworth-Heinemann, London. Aikivuori, A. (1996), Periods and demand for private sector housing refurbishment, Journal of Construction Management and Economics, Vol. 14, pp. 3-12. CIDB (2007), Construction Quarterly Statistical Bulletin Fourth Quarter 2006, CIDB, Malaysia. Douglas, J. (2004), Building Adaptation, Butterworth-Heinemann, Oxford. Egbu, C.O. (1994), Management education and training for refurbishment work within the construction industry, PhD thesis, Department of Civil Engineering, University of Salford, Salford. Flanagan, R., Norman, G., Meadows, J. and Robinson, G. (1989), Life Cycle Costing Theory and Practice, BSP Professional Books, Oxford. Hamilton, B. (2003), Preventive and corrective maintenance of buildings presented at 2nd Building Management and Maintenance Seminar, Enhancing Quality Through Expanding Systems, Kuala Lumpur, 22-23 December. Hollis, M. and Gibson, C. (2004), Surveying Buildings, 4th ed., RICS Business Services Limited, Coventry.

Kartam, N.A. (1999), Design construction integration: issue and illustrative prototype, Journal Engineering, Construction and Architectural Management, Vol. 6 No. 3, pp. 299-314. Kincaid, D. (2003), Adapting Buildings for Changing Uses, Guidelines for Change of Use Refurbishment, Spon Press, London. Krejcie, R.V. and Morgan, D.W. (1970), Determining sample size for research activities, Educational and Psychological Measurement, Vol. 30, pp. 607-10. McLennan, P.M., Nutt, B. and Walters, R. (1998), Refurbishing Occupied Buildings (Management of Risk Under the CDM Regulations), Thomas Telford, London. Quah, L.K. (1988), An evaluation of the risks in estimating and tendering for refurbishment work, PhD thesis, Herriot Watt University, Edinburgh. Rahmat, I. (1997), The planning and control process of refurbishment projects, PhD thesis, University College, London. Rahmat, I., Torrance, V.B. and Ezanee, A.H. (2003), Refurbishment cycles and the management of refurbishment projects, UiTM Research Centre, Shah Alam, Selangor, Malaysia. Rayers, J. and Manseld, J. (2001), The assessment of risk in conservation refurbishment projects, Journal of Structural Survey, Vol. 19 No. 5, pp. 238-44. Robson, C. (1993), Real World Research: A Resource for Social Scientist and Practitioner-researchers, Blackwell Publishers, Oxford. Sarantakos, S. (1988), Social Research, Palgrave, New York, NY. Watkins, E. (1996), Why renovate?, Lodging Hospitality, April, pp. 32-6. Young, B.A., Torrance, V.B. and Egbu, C.O. (1996), Management in refurbishment works in the construction and shipping industry, Project reference CMR 236, The Bartlett Faculty of Built Environment, University College London, London. Further reading Construction Industry Research and Information Association (1994), A guide to management of building refurbishment, CIRIA Report No 133, Construction Industry Research and Information Association, London.

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