{"id":112751,"date":"2026-11-15T12:35:00","date_gmt":"2026-11-15T09:35:00","guid":{"rendered":"https:\/\/amlak.net.sa\/?p=112751"},"modified":"2026-11-15T13:14:02","modified_gmt":"2026-11-15T10:14:02","slug":"%d8%a7%d9%84%d9%85%d9%8a%d9%84-%d8%a7%d9%84%d8%a3%d8%ae%d9%8a%d8%b1-%d9%81%d9%8a-%d8%a7%d9%84%d8%aa%d8%b7%d9%88%d9%8a%d8%b1-%d8%a7%d9%84%d8%aa%d8%ac%d8%a7%d8%b1%d9%8a-%d8%aa%d9%88%d9%81%d9%8a","status":"publish","type":"post","link":"https:\/\/amlak.net.sa\/en\/112751\/","title":{"rendered":"The final mile in business development: cost savings or loss of value?"},"content":{"rendered":"
\"\"<\/figure>\n\n\n\n

He bought the land at a high price, adopted a distinctive design, and spent on construction. Before the opening, he discovered the project had exceeded its budget. He began looking for what could be cut: some landscaping, lighting, facade specifications, and perhaps even the facilities management contract. The building would function, and the tenants could live without these "luxuries.".<\/p>\n\n\n\n

This is a hypothetical scenario, but it reveals a real risk: attempting to address development overreach by lowering the quality of the final product. The tenant isn't paying because the land was expensive, and the visitor doesn't know how much the contractor spent. Both judge and use what they see.<\/p>\n\n\n\n

This is where the "final mile" begins: the stage where the building transforms from a completed project into a desirable asset. During this time, elements that seem minor in the construction calculations, but are essential to the user experience, may be omitted.<\/p>\n\n\n\n

1. Value engineering is not about deleting what's left.<\/strong><\/h2>\n\n\n\n

Savings are not the problem; the design can be simplified or a material replaced with a less expensive one while maintaining the required performance. The problem is that the decision comes too late, targeting items that have not yet been implemented, rather than items of lesser value to the user.<\/p>\n\n\n\n

The RICS Value Engineering Guide clarifies this difference: the goal is to eliminate unnecessary costs, not to cut work or reduce specifications below the required performance level. It also calls for considering the operational impact of the decision, not just the construction cost.<\/p>\n\n\n\n

But when the budget is tight, the question may become: \u00abHow much would we save if we removed this item?\u00bb and the corresponding question, \u00abWhat would we lose from the commercial offering?\u00bb, is absent. The leasing team remains required to meet the target rent, even though some of the advantages on which this target was built are no longer present.<\/p>\n\n\n\n

The result is that savings are immediately reflected in the development report, while their potential impact becomes apparent later during leasing and operation. The success of project management in reducing an outstanding bill is not sufficient to judge the success of the decision for the owner.<\/p>\n\n\n\n

2. What the developer considers an add-on, the user may consider essential.<\/strong><\/h2>\n\n\n\n

In a shopping center, landscaping and planting serve more than just an aesthetic function. The distribution of shade, seating, and pathways determines how people use the space, and harmonious lighting helps to visualize movement and shape the evening experience; its quality is not in increasing brightness or the number of lights.<\/p>\n\n\n\n

In an American study using virtual scenes of commercial streets, participants rated tree-lined areas as more attractive and comfortable, and expressed intentions for longer and more frequent visits. While this isn't an actual sales figure or a Saudi result, it supports the idea that trees are integrated into the overall experience, rather than being merely decorative elements. <\/a><\/p>\n\n\n\n

And in Office Tower<\/a><\/strong>The quality of glass is not measured by its color or price. What matters is the light and view it provides while controlling heat and glare. The WorldGBC report emphasizes the need to balance these factors; a facade that looks good from the outside may offer a less comfortable experience inside if its performance is subpar.<\/p>\n\n\n\n

In Saudi Arabia, the energy efficiency code for non-residential buildings includes exterior cladding and lighting within the minimum acceptable requirements. Compliance is mandatory, but it does not guarantee the asset's commercial appeal. A less expensive alternative may still be compliant, albeit with some loss of the desired level of experience. <\/a><\/p>\n\n\n\n

The irony is that a tenant may not pay a premium for every single amenity, but they may still reject the building if it lacks one. This is evident in the CBRE European Office Occupants Survey 2026: some amenities are prerequisites for acceptance, not guarantees of higher rent. <\/a><\/p>\n\n\n\n

3. Complete construction does not mean ready for operation.<\/h2>\n\n\n\n

One of the most critical cost-cutting decisions is delaying the setup of the facilities team or settling for a limited contract that doesn't cover the asset's needs. Operational readiness begins before the first visit: testing systems, training the team, defining responsibilities, and preparing a complaint response plan.<\/p>\n\n\n\n

The Better Buildings Partnership and BSRIA guide for commercial landlords cites cost reduction during construction, a shorter commissioning period, and inadequate facility team training as reasons for the gap between designed and actual performance.<\/p>\n\n\n\n

And in Saudi shopping malls<\/a><\/strong>The official requirements cover lighting distribution and preventative and periodic maintenance, including facades, air conditioning, and lamps. These are not matters that can be reduced to cleanliness on opening day.<\/p>\n\n\n\n

Professionalism here isn't just about having a large company name; it can be achieved by a qualified in-house team or a specialized provider, with a clear plan and accountability for performance. However, opening an asset and then discovering how to operate it at the expense of its first tenants may lead them to evaluate a new project based on an experience that doesn't live up to the promise that attracted them.<\/p>\n\n\n\n

4. \u00ab90% of the potential\u00bb does not mean \u00ab90% of the return.\u00bb<\/strong><\/h2>\n\n\n\n

This asset can be metaphorically described as having achieved 90% of its potential, leaving only 10%. This is not a statistical percentage, nor a distribution of project costs or revenue; rather, the completion of most components does not guarantee the success of the entire endeavor.<\/p>\n\n\n\n

The potential impact extends beyond the value of the deleted item; it may manifest as a lease round that doesn't convert into a contract, additional incentives to justify the price, a shorter visit, or a post-opening correction cost. These outcomes vary depending on the market and asset type; there is no single loss percentage that can be generalized.<\/p>\n\n\n\n

Therefore, if the product changes, its revenue assumptions should be reviewed, not the entire asset's projections maintained simply because its spending was high. Protecting the end stages doesn't mean adopting every improvement; rather, it means distinguishing between what can be simplified and what justifies the choice.<\/p>\n\n\n\n

Before removing a significant asset, leasing and operations should be involved in evaluating the alternative, and prior to opening, the user journey should be thoroughly tested: from arrival to entry, from comfort within the premises to requesting service. Budget savings are incomplete if the asset later needs to have its reputation salvaged or its price redefined.<\/p>\n\n\n\n

The question is not:
<\/strong> Can we open the project without these details? Or rather: will tenants and visitors still choose it as we expected?<\/p>\n\n\n\n

Read also by the author:<\/strong><\/p>\n\n\n\n

The \u00ab15-Minute City\u00bb in Saudi Arabia: Is the \u201cLive\u2026 Work\u2026 Play\u201d Formula Enough?<\/a><\/p>\n\n\n\n

Is a real estate appraisal sufficient grounds to raise the rent on an office or store in Riyadh?<\/a><\/p>\n\n\n\n

Converting Offices into Housing: The Solution No One Wants to Talk About!<\/a><\/p>\n\n\n\n

<\/p>","protected":false},"excerpt":{"rendered":"

Reading time: <\/span> 3<\/span> Minutes<\/span><\/span>He bought the land at a high price, adopted a distinctive design, and spent on construction. Before the opening, he discovered the project had exceeded its budget. He began looking for what could be cut: some landscaping, lighting, facade specifications, and perhaps even the facilities management contract. The building would function, and the tenants could live without these "luxuries." This is a hypothetical scenario, but it reveals a real risk: trying to address development excesses by compromising the quality of the finished product\u2026 Read 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