The Life Cycle of an Estate

Some estate life cycles turn up very quickly, so that few years or even months separate the initial building and the final phase. In other cases, an estate may remain for several centuries in a single stage of its life cycle. It is impossible to indicate the average period for an estate life cycle to complete its revolution, but in the case of ordinary domestic buildings of traditional construction, a term of 60-100 years is usual. There are signs of, however, that with the increased pace of technological development, this period will tend to be shortened.

In the center of our older towns, there are many examples of estates which have passed through a series of life cycles, and successive buildings have been erected and later replaced, but more common is the estate which is now in some stages of its first cycle. A building reaches complete obsolescence or dies either when it is physically exhausted or when it is no longer economically worthwhile to keep it in use. In practice, the latter is usually the determining factor as the pace of physical obsolescence can be controlled by repairs and improvements, provided the economic incentive to carry the cost is present. A special case is that of a building of outstanding historical interest which may be preserved as a living fossil long after it might have been expected to perish.

While it is not possible to describe in detail the pattern of an estate’s life cycle, it is easy enough to indicate the main stages experienced by most estates that pass from initial development to renewal, and to describe the principal estate management problems relevant to each stage as follows

1) The pre-development stage.

2) The newly developed stage.

3) The middle life stage.

4) The old age stage.

5) The total obsolescence stage.

The Pre-development stage

The site available for development may either be one never previously built upon or cleared of its previous building. Land in this stage of expectancy tends to become neglected as the owner restricts expenditure on its existing use, whatever this may be, such as agriculture, market, gardening, car park, it must be noted that any investment on improvement must be written off as soon as development takes place. Consequently, sites awaiting development are often prey to nuisance and even when well fenced, may be subject to rubbish dumping, trespass, fly-posting and other similar afflictions. Where the pre-development stage is short, these difficulties are not serious, but when the length of this period is uncertain, effective management and use of the land may become impossible.

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The Newly Development stage

When an estate is newly developed, it should fit its use in every aspect and so be unaffected by obsolescence. In practice, however, very few buildings even when new, meet this standard. For instance, imperfect planning, external changes that take place between the planning and construction stages and perhaps, slight defects in construction, all may introduce elements of obsolescence. Nevertheless, the utility of a building when new is usually greater than at any subsequent time. In the early years of life, obsolescence is likely to take place at a higher and regular rate as the advantages of being new and modern are lost. This will be determined, to a large extent by the speed by which comparable new and more modern buildings are erected, which force higher standards through competition. Occasionally, as in the case of speculative development that does not find an occupier, a new building may be obsolete as soon as it is completed.

The middle life stage

This is normally the longest stage in the life cycle and can be extended to last almost permanently. It begins as soon as the advantages of being new and up-to-date in the initial development stage have disappeared and the building settles down to its long term level of utility and value. Where the value of new buildings tends to be very much greater than that of older properties, however, the inducement to increase the pace of renewal can lead to a shortening in the average period of middle life. During middle life stage, physical decay is normally kept in check by proper maintenance and the annual decline in value due to modifications, extensions, improvements and perhaps, conversions which may be sufficiently major as to constitute virtual replacement and a recommencement of the whole life cycle.

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The old age stage

The end of middle life is marked when the property begins to sink rapidly in status. It shows the outward signs of obsolescence like physical deterioration, adaptation to some poorer class of use than that which it it was designed, out of date fittings and equipment, and its remaining life becomes predictable. The problems of management at this stage are dominated by the short life remaining, which is usually less than fifteen (15) years. Fresh investments in order to improve the premises or even to maintain them in an efficient state for use becomes more difficult as the increase in an annual value likely to result is insufficient to provide a reasonable return on capital and sinking fund to replace the capital sum by the end of the investment life. In consequence, improvements and adaptations needed to maintain the estate are first limited and then neglected altogether. When this stage is reached, it is often the policy of an estate to restrict all expenditure to a minimum and to run down existing assets awaiting development. Where premises are leased, there is also the need to limit the grant of new tenancies so that the duration of their terms does not run beyond the date when development is contemplated. Tenants holding short interests pending development will usually have little incentive to maintain the property beyond the lowest standards of repair and physical condition, and may give rise to other management problems relating to its use and care.

Total Obsolescence

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Firstly, the stage of complete obsolescence is reached when the old buildings and layout have little or no value as they stand. If all goes well, clearance and redevelopment follow quickly but there may be factors that prevent this. The first is that the site may have insufficient value to justify demolition of the old structures and its replacement by something new. In order words, the economic pressure may not be enough to propel renewal. Secondly the pattern of redevelopment may require changes in the size and shape of the site that cannot be secured at ones. This arises where comprehensive renewal is needed to meet modern traffic conditions and the existing small units of development have to be amalgamated for rebuilding purposes. In these circumstances, it is often necessary for individual obsolescent building to remain until the whole areas are capable of total clearance. Thirdly it happens that a building is totally worn out and judged by contemporary standard, is no longer fit for occupation. But because of the shortage of accommodation, it continues to command a use and income. It retains therefore, a value, sometimes, a high one, and is not strictly obsolete from an economic point of view, although it may be so regarded in social terms.