Investing in and lending on unbuilt or partially constructed buildings and other developments comes with a risk. Employing an experienced project monitor who understands their requirements will therefore reassure clients such as lenders or investors when assessing a development's suitability for finance.
Some surveyors specialise in project monitoring. However, they learn how to do so on the job rather than through formal training. As it can be hard to find an experienced project monitor, organisations often employ a building surveyor, project manager or quantity surveyor to perform this role, who are then taught and supervised by colleagues with more experience in the discipline. The process of training a chartered surveyor to become a project monitor takes between three and six months.
My own route into project monitoring began with building surveying. After studying the subject at the University of Reading, I was accepted on to the civil service graduate training scheme and was soon working on projects in government offices and housing for army families in central London. I then became chartered and moved into private practice at a small firm in Essex, where I worked on wide range of projects from repair and redecoration of vicarages to house surveys.
Changing jobs again, I worked for a large international surveying company based in central London with more career development opportunities. I began to focus on running larger projects, and gained experience of design and build as well as traditional contracts. I then moved teams and was fortunate to work for a chartered building surveyor who introduced me to the role of project monitor for investment clients.
The clients were purchasing – and sometimes providing interim funding for – new-build developments for investment funds, including pension funds. The project monitor served as their technical eyes and ears, reviewing the proposals and monitoring works during construction.
I applied my building surveying skills and knowledge to each element of projects, and my construction technology experience helped when reviewing the technical details. For example, I checked composite cladding panels for an industrial building to ensure they were not flammable and that they met insurers' requirements; and I assessed the design of an office building to see whether it followed the British Council for Offices' best practice guidance.
My knowledge also meant I could determine whether building contracts defined and specified the project to the required standard. I applied my programme skills to see whether the works were progressing on site as planned, and whether there may be any delays to completion.
The next stage was for me to focus on project monitoring as a career. I went on to work for a specialist monitoring team in a large, multidisciplinary practice. In this role, I benefitted from the expertise of a respected and experienced project monitor, who taught me how to carry out monitoring for banks and lenders. Working largely for clients that were lenders, I focused on assessing project cost, programme, design and quality, and compliance risks.
My procurement knowledge developed as I began to look at the overall development strategy rather than just the building contract. Collaborating with quantity surveyors, I appreciated the value of robust cost planning and control for successful projects. I checked that the developer had a budget that could be benchmarked against similar projects.
As a specialist, I then moved to another firm of chartered surveyors to develop its project monitoring capability. Here, I helped to expand the project monitoring team, which involved training other surveyors and construction professionals to become monitors themselves. When the global financial crisis of 2008 had a significant impact on the company, I decided to start my own business, Eatonbury, which primarily undertakes project monitoring work.
When I start a new project, I issue a formal schedule of information request to the developer. Once it has issued the relevant documents and information, I organise these and apply my technical knowledge and experience to form an overview of the development. This provides me with a framework for the project – its specification, size and scale, how it is to be procured, the proposed programme, the development budget, and the extent and status of the compliance requirements.
At this point I do a high-level sense-check. For example, are there any significant gaps in the project strategy? Is the scope and experience of the developer's team sufficient? How will the construction works be procured? Am I clear on what is being constructed and the project's timescale?
In the next phase of the review, I gather more information and build up a detailed picture of the project, and undertake another sense-check. The key areas to review are procurement, cost, programme, design and quality, compliance, third-party approvals, site investigations and insurance.
When it comes to procurement, I ask whether the strategy is suitable for the proposed development, and whether it can be achieved within the proposed programme. For example, a design and build project will generally enable a building to be completed more quickly than a traditional procurement route, because the design and construction periods will overlap.
The next question is whether the developer has made sufficient allowance for all the pre-construction approvals and site preparation, as well as the construction period. Is there sufficient time at the end of the project for snagging, testing and commissioning?
Then I determine whether the developer's budget is sufficient to cover the cost of the designing and constructing the building. Has it been prepared by an independent quantity surveyor? Can it be substantiated with comparable cost data? Does it cover all the cost elements expected for the development? Where does the cost risk sit?
The developer may for example have agreed a lump-sum price for the project with the contractor; however, the cost would be less certain thanks to provisional sums and exclusions. Typical contractor exclusions include ground conditions, and risks associated with statutory consents and third-party approvals.
Is the scope of the project clearly defined, too? For example, the interior fit-out for an office building should align with the quality expectations for the location and tenure. There may also be building-specific matters such as tenant specifications or investor requirements.
On a build-to-rent project, for instance, the developer should clearly define the level of interior specification and residents' amenities being proposed, so these can be reviewed against the independent valuer's assessment of what is applicable for the area. A bespoke science park may by contrast need to provide precise building enclosure and environmental conditions for plant and equipment.
The design should be developed to a stage suitable for the project. For example, a warehouse building requires less input in this regard: typically, the planning drawings and performance specifications alone are necessary, as these can be developed by a design and build contractor. In contrast, a listed building requires a high level of input to satisfy the developer's requirements and statutory compliance obligations, so this design should be well developed before handing over to the contractor. Any unknown factors in the design or scope of works can increase the time and cost of the project.
Compliance will be site-specific, but will include reviewing the planning permission and section 106 agreements, as well as assessing how the Building Regulations will be fulfilled and the investment fund's sustainability aspirations achieved.
There is usually third-party information to review as well, which can cover ground conditions, party walls, rights to light, flood risk and archaeology. It is important to know the area where the project is planned, because the presence of radon, unexploded ordnance, underground tunnels or mines may affect a proposed development site.
For instance, I worked on a project where an unexploded bomb from the Second World War was discovered, which resulted in a delay in the project while the site was closed and the MOD decommissioned the device.
While the monitor is not an insurance specialist and cannot themselves review policies, they also check that the developer has insured the works and that the main contractor and the consultants have suitable levels of professional indemnity cover.
In addition to having good technical knowledge of construction and procurement, the monitor must clearly identify the client's requirements.
When reviewing a new project, I assess it in the context of the client's objectives. This includes understanding their appetite for risk, and whether this differs from the developer's approach. Typically, the developer will have a higher risk threshold than a lender or an investor, although the position will vary and needs to be established for every project. Doing so will help inform the client's decisions.
Following the monitor's review, the developer may need to supply more information or take further risk mitigation measures. For example, it may be over reliant on a design and build contractor's team to monitor compliance, and have too few consultants checking the design and the quality of the works. Its team may therefore require additional compliance monitoring consultants to ensure the design is robust and the works comply with the project quality requirements.
This is particularly important on larger projects, or where a highly defined building is required. For example, where a tenant defines specific requirements in an agreement to lease an office building, the developer's consultants should be checking the drawings and specifications prepared by the contractor to ensure compliance before the works commence on site. This helps to avoid potential problems later in the project when they could be more time-consuming and costly to resolve.
But construction is also a people business, and effective interpersonal skills are an essential part of the project monitor's job. I often have to communicate a technical issue to a client who does not have a technical background. Sometimes conversations can be difficult, too, and need diplomacy.
When working for a bank, for example, the developer is the bank's client, and any critical analysis of the project must be handled in a sensitive and respectful way. On one project I phoned such a client to inform him that the developer had included rooflights in a development, although these were not part of the planning permission. We talked it through and agreed a plan of action, where the rooflights were not funded.
It is also important as a project monitor to be unbiased. For those of us who are used to running projects, this can at first seem a challenge. The monitor independently assesses the likely success of the project, but their personal preference for a particular approach is irrelevant: the developer, development manager or project manager takes those decisions. The monitor only highlights concerns regarding the proposed approach, based on a reasoned assessment of risk.
When I entered the workforce I had no idea about project monitoring as a career – but now I champion it. I love the job, and want to spread the word to other chartered surveyors, whether they are building surveyors like me, or quantity surveyors or project managers.
While I myself made the transition from building surveying, project monitoring for lenders tends to be dominated by quantity surveyors. This is because cost planning and management experience can be readily transferred to this type of work, although project management skills can also be easily adapted.
If you are looking for a new challenge, then consider project monitoring. It can offer a fulfilling career for those with curious minds.
BUILT ENVIRONMENT JOURNAL
Jen Lemen FRICS 28 March 2023
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