Report lths en

Long-Term Housing Strategy UT University of Twente 4 JULY 2016 001814.002.01

1

CONTENTS

N.B. Operationally sensitive financial information has been omitted from this version

01

INTRODUCTION

01.01 01.02 01.03 01.04

Background The Development of the LTHS Connection to Vision 2020 and the Real Estate Plan Readers’ guide

02

FRAMEWORKS AND BASIC PRINCIPLES

02.01 02.02 02.03 02.04

Priorities of UT’s Vision and Housing Ambitions Relevant Frameworks Framework for Housing Initiatives Cost Distribution System for Buildings and Facilities

03

ANALYSIS OF CURRENT BUILDINGS AND FACILITIES

03.01 03.02 03.03 03.04

Campus-level Analysis Building-level Analysis Analysis of the Use of Building Space Conclusions: Current Supply and Usage

04

4 4 4 5

7 8 10 11

14 16 16 21

THE LONG-TERM DEMAND FOR BUILDINGS AND FACILITIES

04.01 Scenarios 04.02 The demand for Education-Related Space

26 28

04.03 04.04 04.05 04.06 04.07

The Demand for Research-Related Space The Demand for Office Space The Demand for Residential Units The Demand for other Forms of Non-Primary Facilities Other Ambitions

05

STRATEGIES FOR HOUSING

05.01 Strategies for Housing 05.02 Strategies that have not been Developed in Detail 05.03 Outline of Risks

06

EVALUATION HOUSING INITIATIVES WITHIN UT FINANCIAL FRAMEWORKS

06.01 06.02 06.03 06.04

Financial Consequences in General Terms UT Financial Framework Funding for Investment Long-term Financial Outlook in General Terms

07

SUMMARY OF DECISION AND RELATED CONSIDERATIONS

07.01 07.02 07.03 07.04

Strategic Considerations Relating to Vision 2020 Housing as a Strategic Asset Economic and Business Considerations Follow-Up Process

30 30 30 31 31

35 35 41

46 46 46 46

52 53 53 56

2

01 INTRODUCTION

3

01 INTRODUCTION 01.01 Background The University of Twente (hereinafter: UT) is an entrepreneurial research university that carries out education and research activities in fields ranging from public administration and applied physics to biomedical technology. UT considers its campus as an important tool in the academic and personal development of students and in fostering the entrepreneurial attitude of the university. UT is also aware that its campus represents an essential means (if not a prerequisite for) by which to realize its objective of expanding to accommodate 10,000 students over the next five years. Without suitable and attractive buildings in which to house education-related activities and provide student accommodation, attracting students in today’s competitive education market will prove difficult. Equally, in order to renew the education provided by the university and ensure that employees can continue to work effectively and efficiently, appropriate buildings are also required.

UT aims to ensure that its campus not only provides the perfect breeding ground for new breakthroughs in the fields of education and research, but also that it is an exciting and inspiring place where students, staff and visitors meet and interact. We need a campus that reflects UT´s entrepreneurial spirit, with ample space for spinoffs and student entrepreneurship. A university with an international focus that prepares tomorrow’s ‘global citizens’ for their future as researchers, designers and organizers. A university that provides space for community-oriented research that makes a real difference to society. A university that strives to be a pioneer when it comes to unique educational programmes that combine the various fields of study that our society needs. And a university as the driving force behind the innovative strength of our region.

In order to make our campus fit for the future, in both quantitative and qualitative terms, and in order to make sound decisions regarding the housing initiatives that will be required to achieve this ambition, this Long-Term Housing Strategy for the Physical Environment (hereinafter: the LTHS has been developed to provide a framework that can be used in decisions relating to large-scale investment projects.

01.02 The Development of the LTHS A wide range of bodies from within the UT organization have been involved in drafting this LTHS. The LTHS project group included the university’s Strategy & Policy Department, Finance Department, the Facility Service Centre, as well as the Student Union and Brink Management / Consulting. An LTHS steering group was formed, consisting of a delegation from the Executive Board, Strategy & Policy, Finance, the Facility Service Centre, the chair of the Health project group, the chair of the ITC project group, and the operational director of one of the faculties. In addition, discussions were held with the faculties, service departments and other parts of the organization, and workshops were arranged and attended by a range of organizational units and divisions.

01.03 Relationship to Vision 2020 and the Real Estate Plan Vision 2020 has already been adopted by the university as its vision for the future, and just as in Vision 2020, the priorities of this document in relation to university real estate are:  the creation of a highly distinctive campus;  buildings and facilities that are appropriate for education, research and support services; and  the capacity to cater to international students and staff.

01 INTRODUCTION

4

In order to achieve these priorities, UT’s real estate facilities will be subject to a number of changes during the period under consideration in the LTHS (the period between now and 2025). The LTHS helps to identify and analyse the supply of and demand for buildings and facilities and, on this basis, to identify an appropriate plan. It describes the spatial changes that we wish to see in UT’s facilities and sets out an appropriate and responsible course of action to achieve these within the relevant strategic and financial frameworks. The LTHS is a dynamic document that will be subject to periodical review. UT will reassess its real estate plans on an annual basis, looking at the long-term budget for investment in buildings and facilities that will be required over the coming years. This will provide a concrete insight into the projects that can be implemented during the subsequent year.

01.04 Readers’ guide Chapter 2 examines some of the background factors, developments and trends that are relevant to UT´s spatial situation and the ambitions of the university regarding its campus and buildings. The current situation of university buildings and facilities is analysed in Chapter 3. Chapter 4 provides an insight into UT’s long-term housing requirements, and Chapter 5 explains the final goal that we will seek to work towards in terms of the university’s buildings and facilities and the steps that will need to be taken to achieve this. Chapter 6 discusses the financial consequences of the LTHS in terms of the long-term financial perspective for real estate. Finally, Chapter 7 provides a summary of the investment decisions that will be required. A summary of the contents of the LTHS is shown on the right-hand side of this page.

01 INTRODUCTION

5

02 FRAMEWORKS AND BASIC PRINCIPLES

6

02 FRAMEWORKS AND BASIC PRINCIPLES This chapter examines the various frameworks that are relevant to UT’s spatial and real estate requirements. It also describes the priorities defined in relation to the university’s vision for its future and the housing ambitions that arise from these priorities.

02.01

Priorities in UT’s Vision and Housing Ambitions

Vision 2020 The university’s vision for its future, as set out in Vision 2020, defines its objectives for the coming years. These objectives embody the university’s core values of: oriented towards society; driven by synergy; pioneering; entrepreneurship; and internationally oriented.

UT aims to position itself more strongly in relation to other universities in the Netherlands and its campus has a distinguishing role in this. The ambition is that the campus continues to develop as an inspiring setting where (international) scientists and students meet and interact. By 2020, the university will be widely known as an inspirational and truly international learning environment. UT will offer exciting opportunities for outstanding students in the form of innovative teaching methods and state-of-the-art teaching and research facilities.

On and around the campus, there will be plenty of opportunities for innovation, pioneering, creativity and entrepreneurship. The image on the right (designed by students of Industrial Design and Creative Technology at UT) is a dynamic visual representation of the university’s new strategy. This ‘drone’s eye view’ takes the campus as its central focus and features creative illustrations of the university’s four core values.

The central points of Vision 2020 with respect to the campus can be summarized as follows (Source: Vision for UT campus facilities, February 2015):

Meeting place: inspiring meeting places for students and staff; Entrepreneurial: ample space for innovation, pioneering and creativity on and around the campus; International: facilities on campus which correspond to the needs of the international community and contribute to the international reputation of the University of Twente; Experience and experimentation: the facilities on campus will contribute to the experience of campus users and provide ample space for experimentation.

Given the values and priorities outlined above, it is important that the buildings on campus:  Are flexible enough to be adapted to changing needs in the fields of education, research and entrepreneurship, ICT developments, (new) partnerships and personnel changes.

02 FRAMEWORKS AND BASIC PRINCIPLES

7



Stimulate the fusion of working and meeting.

Internationalization UT currently has approximately 2,000 international students. In 2014, in line with the Vision 2020 strategy, the university established a new internationalization strategy. Because of the work that is being done on internationalization at UT, it is more important than ever before that international students and staff receive a warm welcome and enjoy their time at UT. The following page provides a summary of the priorities identified in UT’s vision and the associated housing ambitions.

02.02

Relevant Frameworks

Performance Agreements with the Ministry of Education, Culture and Science UT has concluded a series of performance agreements with the Ministry of Education, Culture and Science. As far as the LTHS is concerned, the agreement is that generic overheads are to be reduced within the university and, once this has been done, they are to be stabilized. The ministry has also made performance agreements with all publicly funded institutes of higher education about enhanced profiling and the creation of specialist centres for teaching and research, enhancing the quality of education and teaching, improving study results and improving valorisation. These themes all have a central place on the university’s agenda.

UT aims to provide innovative, attractive, high-quality, future-proof education, with one of the key aims being to ensure greater academic success. The university is striving for research excellence in the fields of nanotechnology, biomedical technology, geo-

information systems and ICT; it is the interfaces between these different domains and their relationship to governance and behaviour that make research at the University of Twente unique.

Finally, UT is focusing on improving performance in the areas of valorisation and collaborative partnerships with third parties.

The Political Discussion Concerning Investment in Real Estate by Universities The current political debate about real estate investments by universities is also an important issue for UT’s LTHS. In June 2015, the Ministry of Education Culture and Science made a commitment that all major real estate investments by educational institutions would be assessed by an independent institute. The ministry also made a commitment to assess the costs associated with real estate, the financial risks and the degree of professionalism evident in the real estate management strategies of individual institutions of higher education. The General Court of Auditors has been charged with this task. At the time of writing, the Court of Auditors is conducting investigations at six universities (including UT) in order to assess the current situation in general terms. In parallel to these investigations, the Steering Committee for Governance and Finance of the VSNU (Association of Universities in the Netherlands) has also decided to conduct a survey of university real estate investments. This survey will also be carried out in 2016, in collaboration with HOI (a body representing academic institutions that meets to discuss buildings and facilities). The aim of this investigation is to identify the investment that needs to be made by universities and the maintenance work that needs to be carried out in university buildings.

02 FRAMEWORKS AND BASIC PRINCIPLES

8

Overzicht speerpunten visie en huisvestingsambities Priorities within UT's Strategic Vision

Ambitions for Buildings and Facilities

High-quality education and research (blended learning and state-of-the-art facilities)

Optimize the supply of education facilities in quantitative and qualitative terms and ensure that this is flexible. Community building and smaller-scale facilities are key to UT’s vision of project-based education. Because education and research activities are interwoven, particularly in the Master’s phase, facilitating personal contact between students and academic staff is essential. Anticipate the trends towards life-long learning and blended learning. All these ambitions entail optimizing the supply of education facilities and prioritizing flexibility.

Invest in research facilities in partnership with other parties wherever possible. These facilities should be designed with flexibility and full-time usage in mind. In addition to buildings and building-related technical installations, investment in value-adding facilities is also required; this must be reflected in all plans developed in this regard.

Synergy-driven (uniquely in combinations)

Use buildings and facilities to improve the coherence, cooperation, partnership and/or profiling of specific substantive themes.

Entrepreneurial and pioneering (‘smart living campus’)

Improve the campus as a location for entrepreneurship and experimentation.

Constant anticipation of future developments, synergydriven

Make qualitative improvements to office space in order to promote social interaction, cooperation and flexibility.

The campus as an inspiring meeting place and community

Improve facilities that promote and facilitate meeting and interaction.

Enhance the attractiveness of the campus as an environment for living and working.

Improve the coherence of the various spatial categories within the campus.

International orientation (educating the global citizens of tomorrow)

Improve the facilities that cater for the growing population of international students and staff.

Oriented towards society, synergy-driven

Improve the accessibility and openness/transparency of the campus and its buildings.

02 FRAMEWORKS AND BASIC PRINCIPLES

9

02.03

Frameworks for the Real Estate Initiatives

The following frameworks apply to this LTHS, as well as to UT’s future investment decisions relating to real estate: Aiming for Quality and Flexibility When real estate developments occur, adaptability as well as quality must be prioritized. For every real estate intervention, an assessment is to be made of the extent to which the real estate is (or can be made) suitable for a range of different functions (whether simultaneously or successively) and facility sharing. This applies particularly to education areas and office spaces, and, to a lesser extent, to research areas. Flexibility will also be sought within the category of research areas.

At the portfolio level, the aim is that buildings must be adaptable.

This implies that they should be equipped to the same minimum level.

At the portfolio level and the building level, every type of space should meet the same generic standards; an identity for the building can be added by the (future) users of the building.

UT lets a (limited) part of its portfolio to external tenants, which, as a landlord, involves some level of risk. In practice, however, the departure of tenants can be rapidly accommodated. This is done by using the newly vacant space directly (and adapting the real estate plans accordingly) or by finding new tenants, preferably among companies or institutions that are affiliated with UT. Efficient Use of Space and Optimizing the Use of the Current Property Portfolio At the portfolio level, UT has a guideline of 3% vacancy rate within

the total lettable floor space available. Wherever possible, UT seeks to bundle vacant real estate, so that entire buildings or parts of buildings can be reallocated or divested.

For all (future) office space initiatives, UT will apply the guideline of 12m² of FFA in office space per employee (FTE).

All education-related areas (with the exception of those with very specific facilities) are part of the Central Education Services. At the university level, the aim is to achieve a range of education facilities that meets demand in both qualitative and quantitative terms.

For education-related areas, the guideline occupancy rate is 60-70% or higher. Where bottlenecks occur in relation to particular education-related areas, timetabling solutions will be explored first; if this does not yield an adequate solution, the redevelopment or conversion of current areas will be considered, and finally the possibility of expanding the current range of areas used for education.

UT only rents space off campus if no suitable space is (temporarily) available on campus. The aim is to make maximum use of the university’s own buildings and facilities.

Non-Primary Facilities Sports and cultural facilities are designed primarily for students.

Students occupy a crucial place within UT’s organization, offering a vision for the future. But the university’s sports facilities (particularly sports that are practised by many people) and cultural facilities are also intended for UT staff members, and they play an important role in (international) community-building at UT. Retail, catering and restaurant facilities also reflect UT´s image and objectives in terms of their diversity and quality, and are operated by third parties.

02 FRAMEWORKS AND BASIC PRINCIPLES 10

Look and Feel Real Estate Reflects Strategic Profile The campus is an international learning and working environment.

Buildings are designed to provide places where people can meet and connect, and to enhance the visible profile (and strategic themes) of the university. The look and feel of university buildings constitute a guide for the next phase of the design process. The buildings on campus should reflect what happens in those buildings and be consistent with UT´s priorities.

Real Estate Portfolio Management, from Demand to Realization



Each UT organizational unit which has ambitions in relation to its buildings and facilities will develop a business case to outline its basic vision, with the support of the UT service departments. This business case should outline:  the (collective) substantive ownership on which the demand for buildings and facilities is based;  the housing policy regarding the usage of the buildings and/ or facilities and a description of the intended work, education and research concepts;  a substantiation of the long-term housing requirements and a consideration of the possibility of facility sharing;  an operating forecast, including an estimate of future staff and student numbers;  an account of how future housing costs will be covered in the departmental budget.

For each real estate initiative, an overall evaluation of the campuslevel impact will be carried out, with a specific focus on the supply of real estate available. In addition, various potential solutions will be examined with regard to how the initiative could be implemented and its (financial) impact. An integrated

(physical, organizational, financial) assessment will be carried out and a preference will be identified and substantiated for further consideration.

Across the institution, the entire set of projects must be acceptable in terms of cost and feasible in terms of both planning and organizational capacity. Individual real estate projects must achieve the stated aims and meet the stated housing requirements effectively.

02.04 Cost Distribution System for Buildings and Facilities The total costs associated with UT real estate and land amount to approximately €38 million per annum. Some of these costs are met at the university level, but the majority are covered by means of a rental fee per housing category which is imposed on the various users of the buildings. The revenue from these charges (leasehold, park management fee and rent) is deducted from the total cost of buildings and facilities and are thus borne by building users.

The current system of distributing the costs of buildings and facilities is characterized by a certain degree of solidarity. The system includes eight different housing categories, each with its own charges. The cost of maintaining land and roads are not charged to UT users; external third-parties do make a separate contribution towards these costs. Furthermore, each portfolio includes a degree of vacancy. The resulting costs are, in accordance with university-wide rules (and, in the case of certain housing categories, only after explicit approval by the Executive Board) met at the university level.

The following elements are included in the system of cost distribution: 02 FRAMEWORKS AND BASIC PRINCIPLES 11









Capital costs (depreciation and interest): UT writes down its investments annually on a linear basis, using different depreciation periods depending on the expected lifetime of an investment. To cover the costs of depreciation, the annual cost of depreciation is specified for each housing category on the basis of the level of investment that is deemed realistic.

Interest costs for each housing category are made up of a fixed amount of interest in combination with the investment required and the write-down for that housing category. This fixed cost for interest is determined by the loan portfolio, UT´s equity and long-term expectations regarding interest rates. This means that there is a high degree of stability in the charges imposed for the different housing categories over the long term.

Maintenance costs: UT employs a long-term maintenance plan for all its buildings. This provides an estimate of the long -term maintenance costs for each building and for UT as a whole. These expenses are converted into an average annual figure for maintenance costs and subsequently added to user charges as a maintenance component. This component is currently the same for all housing categories, but with effect from 2019 it will be possible to differentiate between the different housing categories.

Legal costs, cleaning costs and refuse costs: these expenses are converted into an average annual figure and added to rents. This component is currently the same for all housing categories but with effect from 2019 it will be possible to differentiate between the different housing categories.

Energy costs: UT charges energy costs to users annually on the basis of their actual usage. The solidarity principle is not applied in this case, in order to encourage users to take all

possible steps to minimize their energy consumption.

Overall, this system of cost distribution is transparent and results in stable revenues. Brink M/A has evaluated this system as part of the process of drawing up the LTHS. The modifications identified have been compiled on the basis of the recommendations that were made, which will be implemented with effect from 2019.

02 FRAMEWORKS AND BASIC PRINCIPLES 12

3 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES

13

03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES The current supply of buildings and facilities and the way in which they are used has been analysed in quantitative and qualitative terms at both the campus and building levels. This included:  An exploration of current bottlenecks on campus and potential future developments;  A quantitative examination of the various functions and users of buildings and facilities;  An analysis of the qualitative performance of the various buildings.

The Lay-Out of the Campus UT’s master plan, which has specified the direction of its real estate projects of the past 10 years, is based on a number of functional ‘hotspots’ within the campus, namely:  education and research activities;  living and residential facilities (including sports and culture);  restaurant and catering facilities;  spaces for businesses;  the ‘green heart’.

This chapter provides an overview of the primary results of that analysis. Data registered at the UT level (Oracle, Planon, 1 figure HE dossier) was used for the purposes of this analysis.

However, this fairly strict segregation of housing functions limits the formation of relationships and synergies between the different organizational divisions, and means that it is unclear where the true ‘heart’ of the campus is located (rather, it tends to create a series of separate ‘islands’). This does little to foster a feeling of community on campus. The aspiration is now to address this shortcoming, without abandoning the (basic) principles of the master plan entirely.

03.01 Campus-Level Analysis UT is a true campus university. The campus was built in the 1960s in a park-like setting located between Enschede and Hengelo measuring about 1 kilometre by 1.5 kilometres. The campus is the place where students and staff live, work and study. In the 55 years since UT was first established, a great deal of change and growth has taken place, but a number of the original buildings and housing concepts have stood the test of time very well. The campus is easily accessible by both public transport and by car.

Delegations from the university and the Student Union conducted a qualitative assessment of the campus during an interactive session.

They found that the campus offers a wide variety of amenities and that its compactness, green space and autonomy are valuable assets. Moreover, the campus offers many opportunities as a place for experimentation (the campus as ‘Living Campus’).

Under the current situation, there is a perceived physical barrier between the primary and supporting processes of the university. The separation of different facilities constitutes an obstacle to cooperation and means that the university administration is, in a literal sense, removed from primary processes. As such, it would be useful to investigate how the relationship between the primary and supporting components of the organization could be improved by addressing this in the university’s plan for long-term housing strategy (the LTHS).

03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES 14

Total Supply of Real Estate UT has approximately 186,000 square metres of real estate on campus. When all the areas that are unavailable for use (because they are occupied by technical installations, sanitary facilities, storage rooms and spaces used for traffic and circulation) have been deducted, approximately 110,000m² of floor area remain (including ‘special’ areas such as canteens, archives, meeting rooms and copying facilities), to which we will refer in this chapter as net floor area unless otherwise specified. Approximately 95,000m² of this is currently in use by the university itself (distributed between over 40 buildings), approximately 8,000m² is in use by third parties, and 6,000m² is currently vacant.

The Faculty of Geo-Information Science and Earth Observation (ITC) is not yet housed on campus, but in two buildings in the city centre.

The faculty building on Hengelosestraat is owned by the university and has a net floor area of 13,000m² (excluding technical and sanitary facilities and corridors). There is also an ITC hotel, which is also owned by the university and is used to accommodate students, with an area of approximately 7,500m². The ITC hotel has 398 rooms. Finally, UT is also the owner of the Pakkerij Building (approximately 1,300m²), which is also located in the city centre.

The current use of space can be summarized as follows: (in m², net floor area): 1.

95,000m² on campus, UT property, in use by UT. 2.

20,500m² off campus, UT property, in use by UT. 3.

3,500m² on campus, not UT property, in use by UT. 4.

1,500m² off campus, not UT property, in use by UT. 5.

8,000m² on campus, UT property, let to third parties.

6.

6,000m2 on campus: UT property, vacant.

Real Estate Occupied by Third Parties UT lets approximately 3,500m² to third parties in the Gallery building (located in UT’s former Chemical Engineering building) on the basis of long-term leases. This space includes a special lecture facility (the lecture hall of the future, including touch screens). Additionally, approximately 2,000m² is used by the DesignLab. The Gallery building provides space for UT spin-offs and student entrepreneurs, thereby helping to foster UT’s entrepreneurial attitude. UT also rents the Therm examination area, which has a floor area of approximately 1,500m², is located close to campus, and is equipped specifically for conducting tests and examinations.

Spaces let to Third Parties UT lets a portion of its property to third parties (some of which are affiliated with UT). This amounts to approximately 8,000 m² in total, most notably in the Drienerburght, Bastille, Linde and Sleutel buildings.

Changes of Use and Vacancy Approximately 6,000m² is vacant, a situation that affects 15 different buildings. However, some of this vacant floor area is, in practice, sometimes used. The vacant lettable floor area amounts to approximately 3,400m²; specifically there is 1,100m² in the Carré building (research space) and 750m² in the Spiegel building (mainly office space). Appendix 1 provides an overview of all the vacant space (prepared by the FB).

The Langezijds and Hogekamp buildings are currently empty and are awaiting conversion by an external party. These buildings have a combined net floor area of approximately 26,000m². UT is also the owner of the Technohal building, which also qualifies for redesignation. These buildings have a combined potential floor area 03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES 15

of approximately 8,000m².  Opportunities for Development There is a wide range of opportunities for development on campus.

In addition to the buildings that are awaiting conversion that we have already mentioned, the campus still has ample space for further development, should this need arise in the future. For example, the end of the Es aan de Horst (opposite parking area P2) could serve as a site for a (significant) expansion in the event that the university grows substantially in the future.

03.02 Building-Level Analysis To gauge the qualitative performance of the UT real estate portfolio, UT´s various buildings were evaluated by the maintenance and management department on the basis of the following criteria:  Functionality;  Flexibility;  Look and Feel;  Distinctiveness and Visibility;  Accessibility.

A number of surveys and studies that have previously been commissioned by UT were used to determine the performance of the individual buildings on the following criteria:  State of repair (NEN 2767);  Energy-efficiency;  Fire safety.

The key conclusions are as follows:  Much of UT’s real estate scores between satisfactory and good on the Functionality criterion and is therefore

  

appropriate for the activities of the user(s); Much of UT’s real estate scores between satisfactory and good on the Distinctiveness and Visibility, Accessibility and (Fire) Safety criteria; All of UT’s buildings are in a satisfactory to good state of repair, in technical terms (minimum NEN state 3); Energy-efficiency constitutes a major area for improvement for the portfolio.

The flexibility of the buildings was also assessed, with a view to any future redesignation of function. This revealed that the Meander, Ravelijn and Paviljoen buildings and part of the Horst complex could potentially be converted and redesignated with limited intervention being required.

Areas for attention in UT’s real estate portfolio:  Cubicus building (due to its lower scores on Flexibility and Look and Feel);  Garage building (due to its lower scores on Look and Feel, and its poor score on Energy-efficiency);  Logica building (due to its lower scores on Flexibility, Look and Feel and Energy-efficiency).

For further details on the building-level qualitative assessments conducted, please see Appendix 2.

03.03 Analysis of the Use of Building Space In order to evaluate the use of building space an analysis was conducted of the various use of building spaces. A distinction was made between the following functions:  Office space;  Education areas; 03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES 16

   

Research areas; Catering facilities; Sports and culture; Other facilities (including storage, reception areas, etc.)

The figure below shows the total amount of space available at UT, grouped by function. It only shows the buildings on campus that are currently in use (the Technohal, Langezijds and Hogekamp buildings were not included). This analysis also excludes those spaces that UT ■ Education areas ■ Research areas ■ Office space ■ Catering facilities ■ Sports & culture ■ Other facilities

lets to third parties. It therefore only relates to the space that is currently in use by UT (about 95,000m², see section 04.01).

The bottom line is that office space takes up by far the largest amount of space within UT’s real estate portfolio (approximately 40%), followed by research and education areas (approximately 19% and 18%, respectively).

At the building level, it becomes apparent that the Citadel, Cubicus and Horstring buildings have just one clear main function: office space. The other buildings accommodate a combination of functions, with the Carré and Vrijhof buildings, for example, containing a wide range of different functions. The plans in Appendix 3 provide an insight into the distribution of the different functions across the campus.

Office Space The total area of office space on the UT campus that is in use by UT is approximately 39,000m², divided into approximately 1,900 different office spaces. Four buildings contain about half of all the office space available on campus. These are the Carré building (approximately 6,000m²), the Horstring building (approximately 5,400m²), the Ravelijn building (approximately 4,400m²) and the Spiegel building (approximately 4,200m²). Every faculty, service department and institute has its own 'dedicated' office spaces on campus.

The average amount of office space per UT employee on campus (except ITC) is currently around 14m² per employee and 16m² per FTE (based on staff figures dated 31-12-2015, including both permanent and temporary staff). The use of office space by UT is therefore slightly above the average according to the Benchmark for University Facilities 2014. The average figure is approximately 15m² per employee (FTE). (Benchmark for University Facilities 2014 - Colliers, July 2015).

The quality of the current office spaces is generally evaluated as satisfactory to good, but several organizational divisions need more flexible workplace concepts in order to encourage more social interaction and an office environment that is better suited to the dynamics of the work carried out there.

Education areas Education areas Education areas Research areas Research areas Research areas Office space Office space Office space Catering facilities Catering facilities Catering facilities Sports & culture Sports & culture Sports & culture Other facilities Other facilities Other facilities

Education-Related Areas The total floor area dedicated to education on the UT campus is approximately 16,200m², divided between approximately 230 different rooms and spaces. Almost half of this area (representing approximately 12,000m²) can be used in the timetable (i.e. can be booked) via the Facility Service Centre. This includes lecture halls, project areas, and some self-study areas (study cells). The library 03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES 17

■ Lecture halls ■ Seminar rooms

accounts for approximately 1,400m² (reading areas as well as designated self-study areas). The remaining education-related areas consist of 1,700m² of space (particularly in the Vrijhof building) that is labelled as ‘dedicated’ by the Facility Service Centre. This space cannot be used for timetabling purposes. The assumption for this analysis is that this relates primarily to self-study areas. The remainder (approximately 3,000m²) is reserved for use by the faculties and consists mainly of project areas and study areas.

It is important to note that the supply of self-study places is greater than the quantitative analysis of education-related space would imply. In addition to the 1,500 primary study workstations, places in catering areas and project areas can also be used for self-study when they are not being used for their primary purpose (based on an analysis by UT, this potentially includes around 1,000 and 800 self -study workplaces). There are also a number of self-study workplaces scattered across the campus that cannot be timetabled (and are not included in the current system of cost distribution on a one-for-one basis). Based on UT’s analysis, this applies to a total of approximately 1,500 self-study workplaces, which are mainly situated in access routes and areas and so on. This brings the total number of teaching areas (around 6,300) and self-study workplaces (about 3,300) on campus to approximately the same as the total number of UT students. Practical work areas and the 'dedicated' classrooms mentioned previously are not included (Source: Analysis of study workstations on campus, University of Twente, 16 March 2016).

The current education-related areas are generally rated as good in qualitative terms. The education areas in the Spiegel building are an exception to this, however. These are evaluated as mediocre due to their poor acoustics.

The above figure provides a summary of the current supply of

■ Project rooms ■ Practical / lab space ■ Self-study (to reserve)

education-related areas. The plans in Appendix 3 provide an indication of their distribution across the campus.

Occupancy Levels in the Education-Related Areas Every year, UT analyses the occupancy level of education-related areas that can be timetabled (a room is considered occupied when it has been timetabled), partly on the basis of the timetable.

The analysis of the 2014-2015 academic year shows the following:  The occupation of education-related areas is on average between 53% and 65% on working days (40 hours per week).

The total average occupancy of the lecture rooms is 55%.  The large lecture halls (161-500 places) have a low occupancy rate, at around 40% on average. The seminar rooms have an average occupancy rate of 64%.  The highest occupancy rate is around 80% (lecture room Oosthorst 215). The lowest occupancy rate was 29% (lecture room Spiegel 1).  Occupancy rates peak on Tuesdays and Thursdays (averages of 64% and 65%), while Friday, with an average of 53%, is the least popular day in terms of the timetabling of teaching rooms.  The occupancy rate declines over the course of the academic year.

03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES 18

Research related areas





The average occupancy rate is higher than previous years.

This is the direct result of the introduction of the Twente Education Model, which requires more hours of student contact.

The booking rate for specific project areas is high, with an overall occupancy rate of 95%. (Source: Analysis of study workstations on campus, University of Twente, 16 March 2016, and Analysis of occupancy rate for teaching rooms, University of Twente, 11 May 2016).

An average occupancy rate of 70% is commonly regarded as the maximum attainable within higher education. Based on empirical data from other universities and assuming that in the years to come UT can actively manage to improve the efficiency of its timetabling, there will be many opportunities to increase the occupancy rate of those education areas that are available for timetabling.

Research-Related Areas The UT campus includes a large number of areas that are used for research activities. The total floor area dedicated to research areas on the UT campus is approximately 18,000m², divided into approximately 350 different rooms and spaces. As with office space, a large portion of these research areas are ‘dedicated’ to certain faculties and institutes. The quality of the research areas is evaluated as good. The Faculty of Applied Physics has by far the largest amount of research space at over 10,000m². In addition, the Faculties of EEMCS (approximately 4,300m²) and Engineering Technology (approximately 2,500m²) also have ‘dedicated’ research areas. The largest amount of research space can be found in the Carré building (approximately 9,000m²). The other research areas are divided between the Nanolab, Westhorst and Meander buildings.

according to the ‘weight’ of these areas. For example, there are light research areas, medium-weight research areas and heavy research areas, depending on the level of facilities provided. An exception to this is the ‘cleanroom’ type of research area. This is made up of one very large area of approximately 1,000m², which is considered as a separate type of research area. The figure to the right shows a breakdown of all the university’s research-related areas.

Catering and Restaurant Facilities UT’s catering and restaurant facilities are distributed across the campus. They account for a total floor area of approximately 4,200m², divided into approximately 60 different rooms and spaces.

A large portion of these facilities are located in the Waaier building and the Faculty Club (approximately 1,000m² and 700m², respectively). Additionally, there are restaurant facilities in the Spiegel, Horstring, Vrijhof, Ravelijn, and Zilverling (Starbucks) buildings and the Sports Centre. These facilities include Coffee Corners, canteens and two cafés. UT staff and students can also use the restaurants at The Gallery and the Drienerburght Conference Hotel. Delegations from the Departments of S&P, FA, EC and the Student Union discussed the catering facilities on the campus at an interactive session. This yielded the following findings:  The current catering facilities are generally rated as good in terms of their quality. The facilities are well distributed across the campus. The diversity of supply is limited, however (currently one primary supplier).  By investigating demand more regularly and more thoroughly, supply could be tailored to better reflect demand.

■ Light research areas ■ Middle-weight research areas ■ Heavy research areas ■ Clean Room research areas

Within the research areas, a further subdivision can be made 03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES 19

Sports Facilities A range of sports facilities are available on campus. The most popular of these is the sports centre, with an floor area of approximately 5,500m², which accommodates two large sports halls, four smaller sports halls, a large gym and a small indoor swimming pool. There are various other sports fields and courts (for hockey, basketball, football, tennis, volleyball and baseball), an athletics track and a heated outdoor swimming pool.

The Student Union has developed a vision for sports on campus. This vision was developed in consultation with the Student Union, the Sports Centre, the Sports Federation, and with advice from the Department of Strategy & Policy as well as meetings with the boards of the sports associations. This revealed the following:  Sports at UT are characterized by a wide and functional range of facilities;  Certain aspects require renovation and quality improvements, and efficiency could be improved (although the current facilities already work effectively, it should be noted).

Delegations from UT and the Student Union discussed the sports facilities on campus at an interactive session. The meeting revealed the following:  The sports facilities are open in character.  The sports facilities add value to the campus. These facilities are run by the EC with an important role for students.

Ownership of these facilities by UT is therefore a must.  UT has a number of contracts, which means that the facilities are well used at all hours of the day.  Evenings are especially busy, however, with some congestion



occurring at the sports facilities, despite their long opening hours. This is partly due to the Twente Education Model, which has meant that demand for sports facilities is now concentrated in the evenings.

The quality of the facilities largely meets expectations.

However, some sports facilities (including the entrance to the sports centre) will require quality improvements within a few years.

Cultural Facilities The campus is home to about 600m² of cultural facilities. Most of these are located in the Vrijhof building. Some vacant sections of this building are also used to house cultural facilities (approximately 650m²). The Vrijhof building accommodates three theatres and a large number of cultural areas (piano studios, pop studios and workplaces, a workshop, a ballet studio, etc.).

The Student Union has drawn up a vision for cultural facilities on campus. This vision was developed in collaboration with Culture & Events and the cultural umbrella organization Apollo. The following points were revealed:  The campus provides a showcase for culture at UT, with the Vrijhof building at its heart. The Open Air Theatre also plays an important role in this.  Partly because of this, culture at the university is visible and enjoys wide support, contributing greatly to a lively and vibrant campus.  The campus provides plenty of opportunities for cultural events.

Delegations from UT and the Student Union discussed the cultural facilities on campus at an interactive session. The following points were revealed: 03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES 20



 

Cultural facilities add value to the campus. These facilities are run by the EC with an important role for students. Ownership of these facilities by UT is therefore a must.

The quality of cultural facilities largely meets current demand.

Various areas in the Vrijhof building will require renewal in a few years.

Residential Units Approximately 2,000 students live on campus in student accommodation that can house between 1 and 24 residents. All student residential units are located on the west side of the campus.

Currently, UT provides 284 rooms for (international) students on the campus (through the Acasa housing association), 24 rooms in the Logica building, 358 rooms in the ITC International Hotel (IIH) and 99 rooms in the Stadsweide rented premises (Source: University of Twente, Annual Report 2014). In addition, the university has 60 residential units for employees on campus, of which about 40 are owner-occupied and 20 are rental properties. UT maintains some control over all of these properties, including the owner-occupied properties, because it is stipulated that if a property is sold, the seller must try to sell the house to someone affiliated with UT for a period of one year. If this proves impossible, UT is obliged to make an offer on the property and purchase it. Long-term leases have been signed for the rental properties.

For foreign students and staff who are staying at UT for a short period, 300 furnished rooms are available, 77 of which are located in the Mondriaan building. There are no clear peak or off-peak periods in the occupancy rate of the ITC IHH hotel and the Acasa campus residential units, because of the mandatory annual leases. Acasa states that vacancy rates in the rented rooms on campus have been

low for the past few years. The various housing corporations also report full occupancy for the rooms available in Enschede (Source: Housing policy for students and staff, draft, Strategy & Policy, 2 April 2015).

In addition to the residential units, the campus also has other shortterm accommodation options. At the centre of the campus there are seven cabins that can accommodate 15 people per cabin, a total of 105 people. In addition, the Conference Hotel Drienerburght, also located at the heart of the campus, has 64 hotel rooms.

The following statements can be made regarding residential units on campus:  The presence of residential units on campus adds significant value to the campus. Without residential units, the campus would not be a true campus. The residential facilities also ensure a 'warm welcome' for new students.  In terms of quality, the residential units are satisfactory; however, UT perceives a need for more diversity in the range of residential facilities available.

Retail Facilities A range of retail facilities are available on campus. The Union shop is located in the Bastille building; its primary target group is students.

The Sky building contains a supermarket and a hairdresser.

In the Proximity of the Campus The Kennispark innovation campus is located close to the campus.

This dynamic location is home to more than 380 businesses which work on innovations of various kinds. This enables UT to exploit the added value of the campus more intensively and to put theory into practice. UT is one of the initiating parties of Kennispark Twente.

03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES 21

03.04 Conclusions: Current Supply and Usage In summary, the following conclusions can be drawn from this analysis of the current buildings and facilities and their usage.

‘Core stock’ with ‘Flexible Periphery’ The campus offers a wide range of amenities and its compactness, green space and self-contained character are all seen as assets. The portfolio of real estate on campus is also generally assessed as good in terms of quality. If UT´s future development does not occur according to current expectations, however, it will be important to make a distinction within the portfolio between a 'flexible periphery’ and the ‘core stock’ in terms of buildings and facilities. The flexible periphery consists of those buildings which, because of their location, functionality, strategic value and book value, could be used flexibly if necessary. In the event of a permanent reduction in the spatial requirements of the university, these could relatively easily be disposed of (let or sold), and in the event of an increase in the university’s spatial requirements, they could provide space for new growth and development. The other buildings make up the 'core stock' of UT’s real estate portfolio.

Quality of Buildings The qualitative assessment at the building level revealed that a large portion of UT’s real estate portfolio scores as satisfactory to good on Functionality. All of UT’s buildings are in a satisfactory to good state of repair, in technical terms (minimum NEN state 3). In terms of energy-efficiency, there are opportunities to reduce operating costs across a significant portion of the portfolio.

The buildings that require particular attention are the Cubicus building (due to a mediocre score on Flexibility and Look and Feel), the Garage building (due to a mediocre score on Look and Feel and a

poor score on Energy-efficiency) and the Logica building (due to the mediocre scores on Flexibility, Look and Feel and Energy-efficiency ).

Quality of Facilities The qualitative assessment of the main types of facilities on campus (office space, education areas and research areas) revealed that the current supply is generally assessed as satisfactory to good. The education-related spaces in the Spiegel building are outdated and acoustically inadequate, which makes it an unpopular teaching location. In relation to office space, there is broad support for more flexible office environments that are better adapted to the dynamics of the work that takes place there.

Non-primary facilities (sports, culture, catering and residential) add significant value to the campus. These spaces satisfy the demand in terms of the quality provided. However, some sports and cultural facilities will require quality improvements within a few years. The current canteen is seen as too cramped.

Quantity and Flexibility There are a number of ways in which the real estate portfolio could be utilized better:  The average occupation rate of education areas is 59% on working days (40 hours per week). An average occupancy rate of 70% is commonly regarded as the maximum attainable within higher education. By actively aiming for more efficient timetabling, there will be many opportunities to increase the occupancy rate of the education areas that can be timetabled.

The possibility of extending opening times may become relevant if there is a shortage of teaching areas.  By far the largest portion of UT’s real estate is taken up by office space (about 40%, 40,000m²). Aiming for a plurality of usages 03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES 22

within office space and the gradual introduction of a spatial standard for office space should help to reduce the amount of office space that is required. This would lead to savings and greater spatial efficiency over the long term, and enable more investment to be made (higher quality in a lower surface area); this would also bring opportunities for creating a more inspiring environment for work, research and education, including a more attractive range of secondary facilities.  The sports facilities are subject to overcrowding. The opportunities for addressing this issue are limited, however (partly due to the Twente Education Model). The supply of other (non-primary) facilities matches demand fairly closely in quantitative terms.  A range of various development options are possible, both on and off campus. The Technohal building is currently vacant and could provide opportunities for development (the Langezijds and Hogekamp buildings are also (partly) owned by UT, but the redevelopment of these buildings is in the hands of third parties).

With the possible future redesignation of buildings in mind, the adaptability of UT’s real estate was also assessed. This revealed that the Ravelijn and Paviljoen buildings and part of the Horst complex could potentially be converted and redesignated without the need for extensive intervention. The Spiegel building could be converted into a flexible work environment relatively easily (in line with the modifications already completed on the 5th floor).

03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES 23

CONCLUSIONS ANALYSIS OF CURRENT SUPPLY OF BUILDINGS AND FACILITIES AND THEIR USAGE The figure below summarizes the main conclusions of this quantitative and qualitative analysis of the current supply of buildings and facilities on campus and how these are used. This is shown for each spatial category.

Education-related areas are evaluated as satisfactory to good in terms of quality. There are opportunities to improve the occupancy rates.

Cultural facilities are adequate to meet demand in terms of the quality provided. The sport centre is subject to overcrowding at times. m² FFO:

■ Education areas ■ Research areas Restaurant and catering facilities are well distributed across the campus. In the next few years, opportunities will arise to introduce new concepts and to aim for a wider range of choice, due to the end of the contract with the current provider.

Office space is generally evaluated as good in terms of quality. Among many organizational divisions there is broad support for more flexible forms of office lay-outs.

■ Office space ■ Catering facilities ■ Sports & culture ■ Other facilities

Research areas are generally evaluated as good in qualitative terms. In terms of quantity, the current supply exceeds demand.

The Carré building contains research areas that are currently vacant.

03 ANALYSIS OF CURRENT BUILDINGS AND FACILITIES 24

04 THE LONG-TERM DEMAND FOR BUILDINGS AND FACILITIES

25

04 THE LONG-TERM DEMAND FOR BUILDINGS AND FACILITIES This chapter looks at the forecasts for the future of the university and translates these into long-term requirements for buildings and facilities. The need for space includes both the need for qualitative improvements and an increase in the quantity of space available.

In the long term, the spatial requirements of UT can be categorized as follows:  Education-related space: space for tuition and self-study;  Personnel-related space: space for offices and research activities;  Other spaces: residential units, catering facilities, sports and cultural facilities and other amenities.

For specific spatial categories, such as library space, the current use of space will be used as the basis for the predicted long-term spatial requirements.

Throughout this document, the demand for building space is, in line with UT’s current system of real estate administration (see Chapter 03), defined in terms of functional floor area (FFO) in square metres.

To clarify, this means that all spaces that cannot be regarded as available for general use (such as spaces occupied by technical installations, sanitary facilities and access routes) are not included in our calculations.

04.01

Scenarios

Changes in Student Numbers UT’s student population has been largely stable for the past few years, although this masks a slight decrease in the number of Bachelor’s students and a slight increase in the number of Master’s

students. In 2014, the total student population stabilized at just under 9,300 students. In 2014, the number of overseas students increased by 5% compared to 2013, to reach 550 students (excl. ITC).

After years of strong growth, the number of Bachelor’s students from Germany also stabilized compared to 2013. UT has chosen to widen its recruitment activities in Germany. The small increase in incoming overseas students was caused mainly by students from China, India and Italy. The number of incoming overseas Master’s students has remained fairly stable in recent years, but its composition is highly varied. (Source: University of Twente, Annual Report 2014).

One of the ambitions identified in Vision 2020 is that by 2020 international students will make up at least 40% of the annual intake of Master’s students. Based on the current annual intake of around 1,600 Master's students, this means at least 640 international students every year, compared to 300 today. UT also expects the number of exchange students to increase because of the policy of encouraging Dutch students to experience life in another country. It is expected that by 2020, there will be around 750 additional exchange students per year (Source: Housing policy for students and staff, draft, Strategy & Policy, 2 April 2015).

In order to explore the university’s demographic growth potential, the projected demographic changes for the Twente region were examined. The table on the next page shows the demographic structure of Twente in terms of age and expected changes. It shows that the 18-30 age group is expected to continue to grow for a number of years, but is forecast to fall again after 2020.

04 THE LONG-TERM DEMAND 26

Age Profile of Population for Twente Region 1990 2000 17 years old and 137,336 136,707 below 18-29 years old 120,023 98,516 30-44 years old 128,860 138,431 45-64 years old 123,419 147,557 65-74 years old 42,098 48,684 75 years old and 30,570 35,331 above 582,306 605,226 (Source: Twente Databank, based on CBS and ABF Research)

2010

2020

2030

137,993

104,476

102,192

90,797 127,145 167,884 55,531

116,121 105,591 172,218 72,338

109,380 107,778 152,743 78,306

44,082

55,966

74,387

623,432

626,710

624,786

The upper limit for the number of incoming students therefore seems almost to have been reached from a demographic perspective. However, more and more young people are expected to choose to attend university.

UT expects that, in the next few years, more students will move to another university after completing their Bachelor’s degree - for example to a university in the west of the Netherlands. The contrary trend (increasing numbers of Bachelor’s students from the west of the Netherlands) is expected to be less significant.

Discussions with the various faculties also included the outlook with regard to student numbers. These discussions revealed that some faculties expect student numbers to grow. However, given demographic trends and the experience of the past few years, student numbers for some educational programmes can be expected to fall. For the purposes of the LTHS, the forecasts used for student population in 2025 are as follows:  Optimistic scenario: 10,000 students  Base-line scenario: 9,500 students  Cautious scenario: 9,000 students

Changes in Staff Numbers UT’s generic overheads have fallen to less than 19% in recent years, in line with the performance agreements made with the Ministry of Education, Culture and Science. The aim now is to ensure that these remain stable.

With respect to the anticipated future size of UT’s workforce, it is important to bear in mind that tuition is becoming increasingly intensive in terms of the supervision required. Additionally, the university has committed itself to retaining its current high number of PhD students in the coming years. This is part of the university’s policy to strengthen its research capacity in cooperation with the wider region, the business community and its network of external partners and strategic relationships.

UT’s vision for internationalization also makes references to the goal of a 10% increase in the number of international staff by 2020 (which equates to approximately 60 additional employees). It is also expected that the number of 'visiting scientists' (visiting staff) will increase as UT’s workforce acquires more international contacts (Source: Housing policy for students and staff, draft, Strategy & Policy, 2 April 2015).

This being the case, it is expected that the number of academic staff (FTE) will remain stable over the years to come. Similarly, the number of administrative and support staff (FTE) is unlikely to fall.

Both the number of academic staff and the number of administrative and support staff at UT are therefore expected to remain stable over the years to come.

The LTHS is based on the assumption that staff numbers in 2025 (FTE) will have grown in proportion to the number of students, but in 04 THE LONG-TERM DEMAND 27

the event that there is a slight fall in student numbers, staff numbers would likely remain stable.

Scenarios Used as the Basis for Future Spatial Requirements (2025) The future is uncertain, and future spatial requirements therefore remain fluid. Real estate and facilities are, by contrast, fixed in nature, which means that in practice there will always be tensions between supply and demand. To summarize, UT’s ambition is to grow. Under the optimistic scenario, UT will grow to 10,000 students. In order to respond flexibly to future developments and to achieve a structural balance between the costs and benefits of buildings, a conservative estimate of future spatial requirements will be used. The base-line scenario has been used in the LTHS in order to determine the ‘core portfolio’. The remaining scenarios can be incorporated through the use of a ‘flexible periphery’. The underlying aim is to prevent vacant buildings and to achieve the optimal use of all the available buildings and facilities.

The LTHS uses the following principles in order to calculate longterm spatial requirements:  Number of students in 2025 = 9,500  Number of academic staff (FTE) in 2025 = 1,525  Number of administrative and support staff (FTE) in 2025 = 1,075 04.02

The Demand for Education-Related Space

The Twente Education Model (TEM) The introduction of the Twente Education Model (hereinafter: TEM) several years ago has had a significant impact on the demand for education-related space at UT. All the university’s Bachelor’s

programmes are now designed according to this model (except University College Twente/ATLAS). The philosophy behind TEM is ‘Student-Driven Learning’.

It is characterized by the following principles: teaching modules, project-based working, student responsibility, and students learning rapidly together and in the right place.

The LTHS steering group and the Student Union considered not only the effects of TEM, but also wider trends and developments in higher education, exploring their effect on the demand for building space. The vision of ‘the education of the future’ can be summarized as follows.  Higher education currently finds itself in an rapidly changing environment. Students are demanding greater flexibility and customized learning programmes. The employment market is becoming increasingly dynamic and this means an increasing level of unpredictability. The ability to respond flexibly to rapid changes in demand is now critical for all educational institutions.  The growing demand from society for more opportunities for personal educational profiling means that efforts are being made to provide personalized learning, improve the quality of education and enable a higher degree of customization and flexibility.  Didactic concepts such as blended learning are causing a shift towards more interactive teaching and various combinations of traditional classroom teaching (plenary tuition) with smaller-scale forms of tuition (assignments or projects carried out individually or in groups).  The digitization of education means that tuition is less dependent on time and place. Contact between students and 04 THE LONG-TERM DEMAND 28







teachers will remain indispensable, however, not only for the dissemination of knowledge but also because of its social aspects: students and teaching staff still need to feel part of a community. The expectation is that student contact time / attendance will remain at 80% of their current level.

Increasingly, students are choosing to study outside their faculty, whether this means individual study or working on group projects.

On the other hand, they continue to need a base in the form of workplaces in the vicinity of the offices where their teachers and the study association of their educational programme are based.

There is a growing awareness that design (in the broadest sense of the term) will play a greater role in tuition and will also take on greater significance within the educational programmes provided.

Generally speaking, because of the rapidly changing demand for and on education and the use of blended learning, there is a greater need for education spaces that can be used flexibly; these need to be suitable for (or be easily adapted to) a wider range of different forms of tuition and education (lectures and seminars, autonomous study in groups).

The Demand for Education and Study Areas in Concrete Terms As part of the preparations for this LTHS and in cooperation with the UT timetabling office and the Facility Service Centre, the current occupancy rates of education areas were investigated. Furthermore, through discussions with the faculties and in coordination with the Student Union, current experiences and perceptions in relation to the demand for additional education spaces were explored. The

arrival of ITC on campus and the growth of the Bachelor’s and Master’s programmes in Technical Medicine were also taken into consideration. On the basis of all these considerations, the likely additional demand for education areas can be defined as follows:  Given students’ preference for workstations that are near lecture rooms and on the basis of a survey carried out by the Faculty Board into the perceived shortcomings of the current situation, increasing the number of (primary) study workstations in the Plein area (the Zilverling, Hall B, Carré and Waaier buildings) ought to be prioritized. The assumption is that 100 additional places are needed, the equivalent of approximately 150m² (the current total provided is around 1,500 primary places). This is based on a desired increase in the number of workstations by adding an area of 500m².  Both students and staff need additional project rooms on campus. An analysis of the occupancy rates of current project rooms shows that there are barely enough to meet requirements. The assumption is that 25 additional project rooms (approximately 500 m²) are required, which could be booked by both students and staff. The arrival of ITC on campus will create an additional demand for project rooms / workstations for Master’s students, amounting to approximately 1,000m².  The arrival of ITC on campus and the growth of Health means that there is a demand for additional practical rooms amounting to 630m².  There is an increasing demand for large flexible seminar rooms (>100 persons) that are suitable for (or can easily be adapted to) multiple forms of tuition and education. An analysis of current occupancy rates shows that there is considerable pressure on the large seminar rooms that are 04 THE LONG-TERM DEMAND 29

currently available. The assumption is that 3 additional seminar rooms for approximately 120 persons are needed (approximately 720m²). Additionally, ECTM requires additional lecture rooms, including an auditorium and several seminar rooms (a total of approximately 600m²).

The occupancy rate in the smaller lecture rooms (<30 people) and the larger lecture rooms (which cannot be adapted) is low. Future more detailed plans will seek to, wherever possible, reallocate these spaces in order to, for example, address the current shortage of project rooms and larger seminar rooms. For the non-flexible lecture rooms (with raised seating), the goal will be to maximize the occupancy rate of current rooms and not to add any further facilities of this kind.

It is also desirable to have permanent test rooms on campus. The analysis of occupancy rates indicates a high occupancy rate in the current (rented) facilities off campus (Therm). The assumption is that a comparable floor area would be required (a total of approximately 1,150m²) to what is currently available at Therm.

(Source: Analysis of study workstations on campus, University of Twente, 16 March 2016, and Analysis of occupancy rate for teaching rooms, University of Twente, 11 May 2016).

04.03 The Demand for Research-Related Space The current availability of research-related areas meets current demand in terms of the quality provided. Within the research institutes, requirements are changing, but this is largely being accommodated within the regular operations of the faculties (it relates mainly to the need for specific research equipment rather than to a need for extra space). It is expected that in quantitative

terms, the demand for research space will remain stable. This means that the current vacancy rate in research areas (see Chapter 03) is expected to remain constant. The LTHS does not anticipate largescale spatial changes (with the exception of the goal of reducing the vacancy rate). The arrival of ITC on campus will create additional demand for research space amounting to approximately 910m².

04.04 The Demand for Office Space The (future) demand for office space was discussed at a series of meetings with the various faculties and departments of UT. This revealed that the expected demand for office space on the part of current users of the campus, based on current workstation concepts, will remain stable during the period to 2025. Within the service departments, however, there was broad support for a (shared) flexible office environment. Within the faculties, too, there was support for office spaces that are better adapted to work dynamics, with a larger variety of workplace types. In view of the potential for multi-purpose office space and future shifts in the organizational structure, a flexible layout is essential for the available office space, so that spaces can be used flexibly and be modified or customized quickly and without the need for significant expenditure.

UT will base (future) office space initiatives on the need for 12m² of office space per employee (FTE). This standard will be introduced in phases, as parts of the organization are relocated and/or as major functional modifications take place within buildings. This guideline is about 20% lower than the current requirement for office space (see Chapter 03). The total demand for office space will thus fall gradually over the next few years.

The arrival of ITC on campus will create an additional demand for 04 THE LONG-TERM DEMAND 30

office space of approximately 4,565m². The growth of Health will lead to a net additional requirement for office space of approximately 243m².



04.05 The Demand for Residential Units Vision 2020 includes the university’s vision for continued internationalization. Suitable accommodation for new incoming international staff, and indeed for all students and staff, is an essential aspect of this. UT’s Department of Strategy and Policy has conducted a survey into the demand for and supply of residential units. Their conclusion is that according to current growth forecasts, UT will be able to cope until 2020 without additional measures to increase supply and still meet its obligations to accommodate overseas students who require a visa and ATLAS students. However, total demand currently exceeds the available supply. For overseas students who do not require visas and exchange students, measures are required to expand supply and expand the number of options available. There are opportunities to increase the quantity and quality of residential facilities on campus. UT has noted a growing demand for a wider variety of room types and also a growing need for short-stay facilities.







 

04.06 The Demand for Other Forms of Non-Primary Facilities The expected future demand for non-primary facilities on campus (sports, culture, catering) was discussed at interactive sessions with delegations from UT and the Student Union. This yielded the following findings:  Non-primary facilities can make a significant contribution to realizing the priorities identified for the university campus as a meeting place, a centre for entrepreneurship, internationalization, experience and experimentation.

The campus currently lacks a shared ‘front door’ and an attractive meeting place where students, staff and companies based at UT and the Kennispark can meet and share (spontaneously and in an informal manner).

The current range of restaurant facilities is capable of meeting future requirements in terms of the quality provided.

The current canteen (the Waaier restaurant) is, however, seen as being too cramped. The need to address this lack of space, in combination with the arrival of ITC on campus, means that there is demand for 535m² of additional space.

The focus on ongoing internationalization will also mean higher qualitative requirements in terms of the diversity of supply.

The current cultural facilities can meet both current and future demand. There is, however, a desire to extend the range of cultural facilities on offer by adding a dance facility.

Despite its long opening hours, the sports facilities on campus are often overcrowded (see Chapter 03). Demand currently outstrips supply.

De Boulevard requires refurbishment and improved facilities are needed in the Hogekamp building.

The Student Union wishes to upgrade the Bastille building to become the primary student centre on campus, with a startup hub and workstations for students for group work (committees / projects) and individual work.

04.07 Other Ambitions Discussions with the various organizational divisions of UT and the interactive sessions that were organized as part of the LTHS revealed several other ambitions, in addition to those already mentioned.

These ambitions have been listed in a separate file that is only available internally within the organization.

04 THE LONG-TERM DEMAND 31

CONCLUSIONS THE LONG-TERM DEMAND FOR BUILDINGS AND FACILITIES The figure below summarizes the main conclusions of the analysis of the long-term demand for buildings and facilities. This is shown for each spatial category.

Cultural facilities are capable of meeting current and future demand (many users would like to see a dance facility added). Despite their long opening hours, the sports facilities on campus are subject to overcrowding.

The current supply of restaurant and catering facilities is capable of meeting future demand in terms of both quality and quantity. The arrival of ITC on campus will lead to increased spatial requirements. The focus on further internationalization will imply further qualititative demands in terms of diversity of supply.

Based on current workplace concepts, the qualitative demand for office space will remain similar to the current situation until 2025. However, there is broad support for more flexible office spaces that better reflect workplace dynamics. The incremental introduction of the guideline of 12m² of floor space per employee (FTE) will lead to a gradual fall in the demand for office space. The arrival of ITC on campus will lead to an increase in requirements of approximately 6,800m².

Current space used on campus in m² (FFO):

The demand for education-related areas that can be used flexibly will rise across the board. The capacity to meet this demand can partly be created by using the current supply of buildings and facilities more fully. The arrival of ITC on campus will lead to additional demand for space of approximately 550m². The clustering of Health (and the growth of Technical Medicine) will lead to addition demand for space of approximately 3,700m².

■ Education areas ■ Research areas ■ Office space ■ Catering facilities ■ Sports & culture

■ Other facilities

The shortage of space is expected to remain constant in terms of quality. This means that the current vacancy rates in the current supply of research areas are also expected to remain constant. The LTHS does not anticipate large-scale spatial changes (with the exception of the goal of reducing the current vacancy rates). The arrival of ITC on campus will lead to an increase in the demand for research space of approximately 910m².

04 THE LONG-TERM DEMAND 32

CONCLUSIES THE LONG-TERM DEMAND FOR BUILDINGS AND FACILITIES Summary of additional demand for buildings and facilities as incorporated in the 2 strategies (see next chapter).

Type of Space Education-related areas Lecture- and seminar rooms Study areas Project rooms Project rooms study areas Master's students Practical work areas

Demand from

m²

University wide Health University wide University wide ITC Health ITC

720 600 650 500 1.000 230 400

ITC Health

4.565 243

Office space

Research space Restaurant and catering facilities Restaurant/Educafé Drinks area Other facilities Library space including study area MSc. Space for study associations Storage Other space Total additional demand for space

ITC

910

ITC Health

535 70

ITC Health ITC Health ITC

400 154 215 59 110 11.361

04 THE LONG-TERM DEMAND 33

05 STRATEGIES FOR HOUSING

34

05 STRATEGIES FOR HOUSING Based on the findings presented in Chapter 04, in which the likely future demand was compared with the current supply for each spatial category, this chapter will outline the possible solutions for reconciling likely future demand with the supply of building space and facilities available on campus. A number of strategies have been explored in this regard.

General Description of the Housing Strategy It should be stressed that the plan for the Long-Term Housing Strategy is described in general terms. As the plans for each 'project' are taken forward, they will be discussed with stakeholders in order to decide on the details of (temporary) relocations or new construction or renovation/maintenance work.

Periodic Review of the Long-Term Housing Strategy (LTHS) As a consequence of the uncertainty surrounding future developments, the LTHS is dynamic in nature. This means that the LTHS must be able to adapt to future developments. The strategies outlined in this section are based on the current situation and anticipated future developments. If the reality turns out to be different, however, the LTHS will need to be modified accordingly.

The plan will be reviewed and recalibrated on an annual basis.

05.01 Strategies for Housing Decisions Made on Basic Principles In December 2015, when UT decided to develop this LTHS, it also made a number of decisions concerning the basic principles that would apply to managing its real estate portfolio. It was decided that ITC would move from its current location in the centre of Enschede onto campus, which will lead to additional demand for building

space and facilities on campus. How exactly this demand will be accommodated will depend on the strategy that is chosen.

Furthermore, it was decided that Health would be clustered in the Technohal building in a visible manner, unless the LTHS process revealed that this option would not be consistent with the university’s broader strategy or would prove unrealistic from a financial perspective.

Proposed Strategies In order to accommodate the future demand for buildings and facilities, the following strategies have been developed: 1. ITC as a gateway to the international campus and higher-profile Health cluster in the area of O&O-Plein (ITC in Spiegel building, Health in Technohal building).

2. Higher-profile Health cluster and ITC in the area of O&O-Plein; opportunities for synergy (ITC in new building on the site of the Citadel building, Health in Technohal building).

The attached file entitled ‘Summary of LTHS strategies and projects draft’ provides an insight into each strategy and the projects that would be involved, as well as their spatial and financial consequences. The following pages provide a detailed description of these strategies.

Prioritization of other Housing Ambitions and Initiatives The strategies only provide an outline of the projects to which the decisions made in this LTHS are applicable. This includes accommodating ITC on campus, the clustering of Health and all other projects that are directly linked to these. All other initiatives and ambitions that have been developed as part of this LTHS process are included in a separate file entitled ‘Summary of LTHS initiatives and 05 STRATEGIES FOR HOUSING 35

projects - draft.’ This is an internal UT document.

05.02 Strategies that have not been Developed in Detail A number of strategies and solutions were not developed in detail within the LTHS process, even though they may be relevant from a spatial perspective. In recent years, the following spatial options have been explored by UT:  Health retains current areas in Carré, Ravelijn and Horst buildings + expansion of ECTM in Carré building;  Health in Gallery building;  ITC accommodated in current vacant buildings on O&O-Plein;  ITC in Cubicus and Ravelijn buildings;  DesignLab in Technohal building;  DesignLab in areas vacated by Health in Carré building;  DesignLab in Gallery building phase 2.

These opportunities have not been examined in further detail for the following reasons:  The desire to avoid vacant buildings on campus. Furthermore, not making use of the opportunity to redevelop the Technohal would be a missed chance; the building incorporates a great deal of glass and could serve as a showcase for UT: High Tech Human Touch. The Technohal building also occupies a prominent position on O&O-Plein, and UT has complete control over its redevelopment. This means that there will be further opportunities to build on other UT themes in the future.  The architectural merit of the Technohal building means that its demolition and replacement with a new building is not feasible and this option has therefore not been investigated. The reuse of current buildings is also preferable on the basis of sustainability considerations.

 Gallery phase 2 will be used to accommodate businesses. Several other stakeholders are involved in this process. UT does not have full control over this.  The visible clustering of Health is important for the strategic goal of UT due to its desired profile.  Accommodating Health fully in the Carré building would only be possible after significant redevelopment work in the educationrelated areas and the relocation of the offices of other groups elsewhere. Furthermore, Health would then be spread over several floors, with the MRI in the basement. This would not produce the desired clustering and profiling effects.  Due to the unique concept on which ITC is based, it is strategically important to accommodate this faculty in a single building. The preservation of ITC’s community of staff and students, and the integration of education and research, are essential for the continued success and improvement of ITC.  Current agreements with third parties, such as the DesignLab Gallery in phase 1, must be taken into account.

The strategies outlined in this LTHS do not involve any new buildings outside the central O&O-Plein area, because this would not be consistent with the objective of accommodating teaching and research in the area of O&O-Plein, as outlined in the Master Plan (an objective that remains applicable).

05 STRATEGIES FOR HOUSING 36

STRATEGY 1: ITC as Gateway to International Campus and Profiling of Health on O&O-Plein Description of Strategy This strategy prioritizes the creation of an outward-facing gateway for the campus. The Spiegel building would be extended by approximately 1,700m² in order to accommodate the Faculty of Geo-Information Science and Earth Observation (ITC). By accommodating ITC in the Spiegel building, the faculty would act as the outward face of the campus upon arrival from Hengelosestraat. The expansion of catering facilities (due to the arrival of ITC on campus) could also be realized in the ITC building. These facilities would be consistent with the (international) requirements of ITC and would be open to the entire university. This would encourage 'traffic' into the ITC building. Health-related activities would be clustered in the Technohal building. This strategy is consistent with the spatial ambition of using current buildings to improve the coherence, integrity and profiling of specific themes and optimizing the range of education-related facilities in both quantitative and qualitative terms.

Projects Directly Linked to this Strategy A number of projects would be necessary as a direct result of the relocation of Health and ITC. The part of LISA which is currently accommodated in the Spiegel building would be relocated to the Vrijhof building. The service departments currently based in the Spiegel building would be accommodated in the space that would become free around O&O-Plein, based on a flexible workplace concept. The Executive Board would also be based on O&O-Plein. The exact location of these organizational divisions has yet to be decided, however. This would depend partly on progress in relation to other ambitions. The space vacated by Health (primarily the Carré and Ravelijn buildings) and the remaining space in the Technohal building (assuming that the Technohal building is renovated to a sufficient technical standard) would provide ample space for the formation of a cluster for the policy departments in the Spiegel building and to accommodate the Executive Board.

Advantages of Strategy 1  The role of the Spiegel building as the outward face of the campus would be reinforced by accommodating ITC.  The ‘Health’ theme activities could be clustered in a manner that is visible and adds value.

 The architectural merit of the Technohal building would be retained (and enhanced) due to the renovation of this building.

 Qualitative improvements in the area around O&O-Plein due to the redevelopment of the Technohal building.

Disadvantages of Strategy 1  Locating ITC outside the area of O&O-Plein would mean fewer opportunities for facility sharing and meeting places and synergy would not be encouraged as much.

 The relocation of service departments to the area around O&O-Plein is not consistent with the Master Plan (under which education and research come together on O&O-Plein).

 Locating ITC further from O&O-Plein would also limit the opportunities for using vacant space in other buildings and reducing the scale of new construction required (extension of the Spiegel building) (this is not currently the starting point).

 Some fragmented vacancy would be caused by the relocation of Health.  The service departments would be accommodated in a fragmented manner.

 The vacancy rate would increase by approximately 2,000m².

Other Ambitions The other initiatives and ambitions, included in the attached file entitled ‘Summary of LTHS strategies and projects - draft’, provide some solutions for the vacancy that would arise under this strategy.

05 STRATEGIES FOR HOUSING 37

STRATEGY 1: ITC as gateway to international campus and profiling of Health on O&O-Plein Summary  ITC in Spiegel building (including extension)  Clustering of Health in Technohal building  EB based in vacated/remaining space on O&O-Plein  Service department cluster in vacated/remaining space on O&O-Plein  LISA at CES in Vrijhof building  Extension of campus parking facilities (due to arrival of ITC)

Spatial Impact (in m²) Current situation : In use: Available:

95,000m² 6,000m² (of which around 3,400m² is lettable, see attachment 1)

Strategy 1: In use: Available:

103,000m² 8,000m²

Financial Impact This strategy would involve an investment of €xxx Implementing this strategy would invole an increase in vacancy of around 2,000 m² of floor area compared to the current situation. The annual costs associated with this would be €xxx

05 STRATEGIES FOR HOUSING 38

STRATEGY 2: Profiling Health and ITC on O&O-Plein, Opportunities for Synergy Description of Strategy The profiling of both Health and ITC in the area of O&O-Plein is the main feature of strategy 2. Under this strategy, the Citadel building would be demolished and a new building would be constructed in its place that would accommodate the Faculty of Geo-Information Science and Earth Observation (ITC). The expansion of catering facilities (due to the arrival of ITC on campus) could also be realized in the new ITC building. These facilities would be consistent with the (international) requirements of ITC and would be open to the entire university. This would encourage 'traffic' into the ITC building. The formation of a Health cluster in the Technohal building would make O&O-Plein the true heart of education-related activities. A new building located where the Citadel building is currently located and the renovation of the Technohal building would create a new look and feel for O&O-Plein, increasing activity there. This strategy is consistent with the spatial ambition of using the buildings to improve the coherence and profiling of specific themes, the cooperation between them, and the optimization of education-related facilities in both quantitative and qualitative terms.

Projects Directly Linked to this Strategy

Advantages of Strategy 2  Qualitative improvements in the area around O&O-Plein.  The ‘Health’ theme activities could be clustered in a manner that is visible and adds value.

 The architectural merit of the Technohal building would be retained (and enhanced) due to the renovation of this building.

 Modern, high-quality accommodation for ITC in the area around O&OPlein, maximizing the opportunities for synergy and facility sharing.

 Accommodation for ITC in the area around O&O-Plein would promote the socio-cultural integration of ITC with the rest of the university.

 The realization of flexible education areas and office space on the site of the Citadel building would provide flexibility in the area around O&OPlein. If ITC grows or shrinks in future, additional space would be available in adjacent buildings, or vice versa.

 The Citadel building would be simpler to vacate in organizational terms (the consequences would be less far-reaching) than the Spiegel building. Planning in relation to the arrival of ITC to the campus would therefore become less contingent on other projects.

A number of projects would become necessary as a direct result of the relocation of Health and ITC. The current users of the Citadel building (University College Twente and some service departments) would be relocated to another spot on O&O-Plein, in the vacant or newly vacated areas in the Carré and Ravelijn buildings and the remaining space in the Technohal building (assuming that the entire Technohal building is renovated). The exact locations would still need to be determined and would depend partly on progress in relation to other ambitions. If necessary, vacant areas in the Meander, Zuidhorst, Noordhorst and Spiegel buildings could be used for this purpose.

 Locating ITC on O&O-Plein would create opportunities to use vacant

Other Ambitions

 The vacancy rate would increase by approximately 3,100m².  The need for investment is approximately xxx higher than under

The other initiatives and ambitions, included in the attached file entitled ‘Summary of LTHS strategies and projects - draft’, could provide some solutions for the vacancy that would arise under this strategy.

space in other buildings and reduce the scale of new construction required (this is not currently the starting point).

 Accommodating Health and ITC in the area around O&O-Plein (and service departments elsewhere) is consistent with the Master Plan.

Disadvantages of strategy 2  Some fragmented vacancy would be caused by the relocation of Health.  The policy departments and the Executive Board would continue to be based in the Spiegel building, making them remote from the primary organizational divisions.

strategy 1.

05 STRATEGIES FOR HOUSING 39

STRATEGY 2: Profiling Health and ITC on O&O-Plein, opportunities for synergy Summary  ITC in new building on the site of the Citadel building  Current users of the Citadel building, including University College Twente, would be accommodated in the space vacated/remaining on O&O-Plein

 Clustering of Health in the Technohal building  Extension of parking facilities on campus (due to arrival of ITC)

Spatial Impact (in m²) Current situation : In use: Available:

95,000m² 6,000m² (of which around 3,400 m² is lettable, see attachment 1)

Strategy 2: In use: Available:

104,900m² 9,100m²

Financial Impact This strategy would involve an investment of €xxx Implementing this strategy would lead to an increase in vacancy of around 3,100 m² of floor area compared to the current situation. The annual costs associated with this would be €xxx

05 STRATEGIES FOR HOUSING 40

05.03 Outline of Risks In this LTHS, a number of carefully reasoned assumptions have been made.

Nevertheless, real estate is by definition static in character, and any real estate investment made will represent a long-term burden on the university’s budget. It is therefore important to identify the risks involved (those matters over which UT has no or limited influence) and the impact that these risks could have, and to determine what measures could be put in place to mitigate these risks. This section provides an outline of the robustness of the strategies for change that have been presented, and the extent to which they could be modified.

This section presents an analysis of the following risk areas:  The risk of an unexpected rise or fall in the number of students and staff;  Planning relating to operational continuity;  Financial risks.

The risk matrix shown on page 44 presents a summary of these risks and their potential impact, how likely they are to occur, and the preventative and mitigation measures that can be taken.

The Risk of an Unexpected rise or Fall in Student Numbers If the actual trend in the numbers of students or staff deviates from current forecasts (see section 04.01), this will impact UT’s spatial requirements directly. This applies to both a larger than anticipated rise or fall in spatial requirements.

Scenario of Falling Student Numbers If the number of future number of students and staff at UT falls below the number assumed in the LTHS on a permanent basis, a proportion of the university’s real estate portfolio will become surplus to requirements. If no use can be found for the surplus buildings, they will form a disproportionate burden on the university’s budget.

One general measure that can be taken to address such a situation would be the divestment of rented premises. Under strategy 1, there would be an opportunity to vacate the Citadel building. The Citadel building is of limited

value to UT and its book value is also limited. If UT were to face a contraction scenario in the future, the current users of the Citadel building could be accommodated elsewhere in the area around O&O-Plein. Another use could be found for the Citadel building (so that it would be retained for the eventuality of a subsequent resumption of growth) or the building could be demolished. The Buitenhorst building could also be vacated.

However, the book value of the Buitenhorst building is higher.

Under strategy 2, there would be an opportunity to vacate the Spiegel building over the longer term. The Spiegel building forms the entrance to the campus, but is also a building which, due to its location outside the area around O&O-Plein, could be sold or used for another purpose. If UT were to face a contraction scenario in the future, the service departments and the Executive Board could be relocated to the area around O&O-Plein. This would mean that all the vacant buildings would be grouped together, making them easier to divest. However, the situations described above would represent a departure from the central premise of the Master Plan and the opportunities for future growth would be limited. Under this strategy, the Buitenhorst building could also be used for other purposes.

Scenario of Rapid Rise in Student Numbers Unexpected growth in student numbers would also pose a risk to UT. For the university it would be important to respond quickly to any growth in the demand for building space and facilities. If this expansion in demand is temporary, a temporary structure could provide a solution. It would be possible to rent a suitable structure, but under both strategies outlined, there would be sufficient flexibility in the current real estate portfolio.

Under both strategies, some buildings would remain available that could be used for this purpose. On O&O-Plein, the vacant areas of the Technohal could be used. Under strategy 2, the Carré building would contain space that could be used. If necessary, vacant areas in the Meander, Zuidhorst, Noordhorst and Spiegel buildings could also be used. If there is growth in education and/or research, this growth could be accommodated outside the area of O&O-Plein, although this would not be consistent with the Master Plan.

05 STRATEGIES FOR HOUSING 41

In the event of permanent expansion (implying a permanent increase in spatial requirements), a decision would need to be made in consultation with the relevant departments about the extent to which the remaining supply of real estate on campus could be used and whether an expansion of the property portfolio would be necessary. Under both strategies, the end of Es aan de Horst could provide a suitable location for any expansion.

Strategy 1 would include the opportunity to expand the space available on O&O-Plein. If UT were to experience a permanent increase in spatial requirements, it could look at the possibility of demolishing the Citadel building and constructing a (larger) building in its place.

The Risk of Continuity Issues The more intervention that a given strategy requires, the more parties and organizational divisions will be involved and the greater the implementation risks associated with that strategy (such as asbestos and the need for an environmental impact inquiry) are. This increases the risk of delays and the risk of disruptions to the normal operations (continuity issues). Both strategies outlined would involve renovating the Technohal building. This would be a complex undertaking that would include issues with asbestos. The opportunity of enabling Health to realize its growth potential depends on the development of the Technohal building. If the renovation work is subject to delays, an alternative temporary solution would need to be found in relation to the expected growth in the number of students in Health.

Both strategies would also involve some demolition work and work on new buildings. UT is working on its own plans (design, selection of contractors, etc.), but the procedures for obtaining permits for demolition work and new construction work, including the possible need to apply for a change of usage, cannot be fully known in advance. The main risk-mitigation measure that can be taken in this regard is to begin the process of planning in good time and to initiate a dialogue with the relevant authorities as early as possible in order to maximize the time for these procedures to be incorporated into the plans.

Both strategies outlined involve real estate projects that would lead to the relocation of particular organizational divisions. Because chain dependencies are involved, relocation includes the risk of operational disruption due to delays. This is particularly relevant to educational facilities, since the space available has a direct effect on particular academic years (maximum number of admissions) and timetabling. Office users can, in principle, be relocated without major issues at any time of the year.

Under strategy 1, the service department cluster in the area around O&OPlein (relocation of service departments out of the Spiegel building) can only be begun once the conversion of the Technohal building has been completed. Furthermore, the arrival of ITC on campus (after the Spiegel building has been renovated) would also be dependent on the conversion of the Technohal building. Under strategy 2, the arrival of ITC to the campus would be less contingent on other projects. The Citadel building would be simpler to vacate than the Spiegel building (because it is smaller).

In the event of an ‘emergency scenario’, the current users of the Citadel building, or some of them, could be temporarily accommodated outside the area of O&O-Plein - for example, in the vacant areas of the Spiegel or Carré buildings. It would therefore be essential for the new structure on the location of the Citadel building to be completed on time. In this sense, strategy 2 involves fewer risks.

Financial Risks Sales Risk If the premises currently occupied by ITC cannot be sold within the period of this LTHS (until 2025), the university will continue to be liable for the associated maintenance costs. Under this scenario, the possibility of renting out the building could be explored, which would cover the maintenance costs (at least). An alternative step would be to consider postponing ITC’s move onto campus.

The risk of continuity issues would be exacerbated by internal relocations.

05 STRATEGIES FOR HOUSING 42

Refinancing Risks The conditions for raising finance are currently favourable. Less favourable conditions would involve a risk to the investment projects included in (current and future versions of) the LTHS. The next chapter will discuss the risks associated with financing and refinancing, and the associated measures that can be taken by UT to mitigate these risks.

05 STRATEGIES FOR HOUSING 43

UT LTHS Risk Matrix Theme

Scenario

Consequences

Impact on

Likelyhood Strategy 1

Student numbers well below projections made

Increase of vacancy and in sufficient budget to cover real estate costs

Low

Increase in vacancy.

Similar impact under both strategies

Change in student numbers (and staff numbers)

applicability of mitigatiing measures Strategy 1 Strategy 2

Mitigating measures Strategy 2

Increase in vacancy.

Similar impact under both strategies

Plans to be modified in good time

x

x

Stop renting buildings

x

x

Vacate Citadel building in order to let or demolish the building. Vacate Buitenhorst building if necessary.

x

Continued concentration around O&O-Plein. Sell or redesignate Spiegel building. Vacate Buitenhorst building if necessary.

Low

Portfolio is sufficiently flexible, but potential for growth is not (entirely) located according to enquirements (O&O plein)

Portfolio is sufficiently flexible (more so than under strategy 1), potential for growth is located according to requirements (O&O plein)

Arrival of ITC is dependent on Spiegel building being vacated

Citadel building can be vacated more easily, Delay to arrival of ITC less likely

Student numbers well above projections made

Buildings and facilities are insufficient to cater for demand

Projects are subject to delays

A number of crusial projects cannot begin, putting pressure on education activities

High

Projects are completed more quickly than planned

A number of projects cannot yet be started

Low

Sharp increase in interest rates

Costs of interest rises sharply and cannot be covered by current accomodation charges

Sale of ITC building is not possible within period of LTHS (to 2025)

Maintentance costs building Hengelosestraat will continue after ITC relocates to Campus

Effect of project on day-to-day operations

Plans can be modified in good time

Plans can be modified in good time

Low

Current accomodation charges can be modified to accomodate a rise in interest rates for 5 to 10 years

Current accomodation charges can be modified to accomodate a rise in interest rates for 5 to 10 years

Low

Insufficient budget for housing costs

Insufficient budget for housing costs

Financial risks

x

Tempary icnrease in demand: yse current vacant areas or rent a new building.

Permanent increase in demand: consider construct a new building to increase available space

x

x

Professional project management, start own plans in good time, start discussions with relevant authorities in order to allow enough time for planning procedures. If necessary, accommodate users in vacant areas.

x

x

If renovation of Technohal building is delayed, arrange temporary facilities to accommodate the growth ambitions of Health

x

x

Temporary planning in relation to projects, regular recalibration of plans

x

x

If the sale is only possible before the planned relocation of ITC onto campus, find temporary accommodation in rented building, investigate which facilities can already be moved onto campus

x

x

Consider the possibility of postponing further investments in real estate

x

x

Aim to let on a temporary basis to cover maintenance costs

x

x

Consider postponing ITC project (vacating of Spiegel building under strategy 1, construction of new building on site of Citadel building under strategy 2)

x

x

05 STRATEGIES FOR HOUSING 44

6 EVALUATION OF HOUSING INITIATIVES WITHIN UT FINANCIAL FRAMEWORKS

45

06 EVALUATION OF HOUSING INITIATIVES WITHIN UT FINANCIAL FRAMEWORKS This chapter will evaluate the housing strategies outlined in chapter 05 in terms of UT’s financial frameworks. All the sums mentioned in this chapter include VAT and are based on 2016 prices.

06:01 Financial Consequences in General Terms The financial consequences of the housing initiatives have been examined in general terms. The estimates provided are based on the indicators that are currently known. They include all demolition costs, the cost of preparing the site(s), project management costs and relocation costs, as applicable. The estimates do not include work on preparing the interior of the buildings for use. The assumption is that some of the current fittings and facilities can continue to be used and that any refurbishments will be funded by the relevant organizational divisions. Once a final decision has been made concerning the university’s housing strategy, all these initiatives will be subject to a more detailed financial analysis.

06:02 UT Financial Framework UT’s financial policy aims to achieve a long-term balance between assets and liabilities. Sufficient equity must be held to maintain a solvency ratio (equity divided by total assets) of between 0.3 and 0.4, with a target ratio of 0.35. At the end of 2015, the solvency ratio stood at 0.35 and was therefore on target.

In terms of liquidity ratios, the ‘current ratio’ is applicable, with a range between the values of 0.5 to 1.5 and a target value of 1.0. Additionally, there is a minimum liquidity limit of €25 million. Both of these criteria were fulfilled at the end of 2015.

06:03 Funding for Investment As part of the drafting of the LTHS, the Finance Division clarified the scope for financial investment over the long term. This advice was based on the availability of capital components resulting from current accommodation charges. Assuming stable RT charges (based on 2016 rates) and based on the depreciation costs that need to be covered from these, the funding available for investment amounts to around €xx million, including the accommodation of Health and ITC and investment in major maintenance

work. By the end of 2021, a total of €xx million will be available to invest in real estate without the need to raise current accommodation charges.

N.B.: This calculation is based on a capital component of €200 per m². However, this depends on the type of additional space that is created. Broadly speaking, every additional 1,000m² means an approximate change in the amount available for investment of around €x million. Only when the programme of requirements and the allocation of space has been finalized can a more accurate calculation be made.

06:04 Long-term Financial Outlook in General Terms The investments involved in the two strategies outlined have been estimated in general terms. The long-term financial perspective focuses on the projects included in this LTHS document about which a decision will be made in due course. This includes accommodating ITC on campus, the clustering of Health and all other projects that are directly linked to this. All investment costs relating to initiatives and ambitions that were examined as part of the LTHS are included in a separate file entitled ‘Summary of LTHS strategies and projects - draft’, but they are not part of any strategy for the time being. Decisions on these costs will be made in future as part of the follow-up process.

Key Principles Applied Both strategies outlined are premised on the full renovation of the Technohal building. The estimated investment required has been based on estimates that UT has made on the basis of the draft design. An adjustment has been made for refurbishment costs for those areas of the building that would not be used by Health.

Under both strategies outlined, certain organizational divisions would need to be accommodated elsewhere. The exact location of each organizational division will be determined during the subsequent decision-making process.

Consequently, a provisional figure per m² of floor space has been used at this stage to calculate renovation and relocation costs. In spatial terms, sufficient space is available in the area around O&O-Plein (and if necessary the Spiegel building).

06 LONG-TERM FINANCIAL OUTLOOK 46

Investment Requirements for Each Strategy The immediate investment requirement for the strategies outlined would vary between €xx (Strategy 1) and €xx million (Strategy 2).

Other Investments in the Spatial Environment The amount available for investment would also need to be used for other spatial investments, about which decisions will be made in due course. The Facility Department has prepared an estimate of these costs.  The estimate relating to the long-term financial perspective includes an annual requirement for investment in maintenance and replacement on the basis of the university’s long-term maintenance plan, which is drawn up by the Facility Department. This relates to ‘routine maintenance’ which is needed to ensure that the buildings (structure, installations, underground infrastructure, etc.) are maintained properly and can operate to the desired standards. Total investment in maintenance amounts to an average of €xx per year. The remaining operating costs (energy, cleaning, etc.) are covered from within current operations and have been excluded for the purposes of this document.  The Facility Department has also made an estimate of the investment in renovation work that is required, based on the age of the buildings (major maintenance work). This investment relates to technical maintenance (extending the lifespan) of buildings. A total investment in renovation work of €xx has been calculated for the 2017-2021 period. For the period after 2021, a very broad estimate for annual investment in renovation work amounting to approximately €x million per year should be assumed until 2030.  Finally, there is the as yet unspecified investment from the Real Estate Plan, based on an estimate of €x million per year for the period 20172021.

In the period until 2021, the total of other investments in real estate can be expected to amount to €24 million. Consequently, depending on the strategy chosen for the first five years, there will be a tension between the investment required and the amount of investment that can be funded. This tension could be resolved either by altering the timeframe of these

ambitions or by finding the investment sums required from the reduction in depreciation costs during the subsequent period.

In the process of drafting this LTHS, based on the meetings and interviews held with the various units, an inventory of other initiatives and housing ambitions has been compiled. Using the indicators and estimates provided, these were found to amount to a total investment of approximately €xx million. Additionally, a broad estimate was made of the investment in renovation work that would be required in the period to 2031 in order to maintain current buildings. This was found to amount to a total of approximately €xx million for large-scale renovation work. Using the amount set aside for depreciation costs, it would be possible to finance these investments without the need to raise accommodation charges. However, the desirability and/or necessity of this course of action would need to be assessed in due course, as well as the possibility of funding these investments from the point of view of liquidity.

Effects on Vacancy Rate The implementation of either of the strategies that have been outlined would involve an increase in the amount of space available in buildings on campus. Strategy 2 would result in 3,000m² more in additional space than Strategy 1, leading to increased costs of approximately €xx per year. These costs would need to be met from the current operational budget.

In addition, both strategies would involve an increase in the amount of vacant real estate. This would rise from its current figure of 3.3% (€xx per year) to 4.8% (€xx per year) under Strategy 1, and 5.5% (€xx per year) under Strategy 2. Both strategies would lead to a vacancy rate above the guideline of 3% of lettable floor area, which was defined as one of the assessment criteria for the LTHS. The other initiatives and ambitions that have been developed as part of the LTHS, but about which no decisions will be taken as part of this LTHS, may help to reduce vacancy rates.

Investment in Restaurant and Catering Facilities The expansion of restaurant and catering facilities (due to the arrival of ITC on campus) is included in both strategies outlined, and would imply an

06 LONG-TERM FINANCIAL OUTLOOK 47

investment of €xx. The cost of this investment would be covered by the internal department CATU and would amount to €xx per year. No funding has been identified for these costs. This also applies to some of the other ambitions previously discussed, about which no decision will be made in the context of the LTHS. Financing The table on the next page provides an overall summary of real estate investments for the period 2017-2021 and their impact on the vacancy rate, which has been compiled by Finance. UT’s long-term budget was used in order to evaluate the effect of this on the assessment criteria for liquidity and solvency (UT long-term financial results nil). Furthermore, any proceeds from the sale of the current ITC building or the ITC Hotel have been excluded. The conclusion is that, under both strategies, current ratio and liquidity would remain within the prescribed limits for the period 20172021, and up to 2025.

As part of the financing arrangement with the Ministry of Finance, a review will take place in 2022 regarding the refinancing of part of the university’s interest position. Once it becomes clear how the (real estate) investment will be handled, the interest and repayment strategy can be finalized.

The investment and expenses that arise from the various strategies will not affect solvency on the basis of self-financing. The ratio between equity and total capital remains unchanged.

Financial Risks The conditions for raising finance are currently favourable. Any change to less favourable conditions would imply a risk to the investment projects included in (current and future versions of) the LTHS as well as to other real estate investments. UT took out three loans from the Ministry of Finance in 2009 to finance real estate investments. These loans are being repaid over a period of 30 years in a linear manner. The interest rate on these loans was revised in 2015 and fixed for six- and ten-year periods, respectively. When the interest rates were revised in 2015, the repayment period was, as far as

possible, linked to the expected trend in net debt. There is a risk that when it is reviewed in 2021 and 2025, the market interest rate could be significantly higher than at present, which would mean higher costs associated with real estate and that users’ accommodation charges may be insufficient to cover these costs. This risk would appear limited until 2021, however, in view of trends in interest rates over recent years.

In terms of ensuring that real estate costs remain affordable, the risk posed by interest rate rises appears to be manageable. The effect of a limited rise in interest rates could be managed on the basis of current accommodation charges, and further decisions relating to real estate could be put on hold in the more distant future, if necessary.

An important mitigating measure in relation to financial risks is the development of a cautious financing policy. The main objective of UT’s financing policy is to ensure that sufficient resources are available at any time to cover all payments. In principle, this relates to the available liquidity and solvency. In order to achieve these objectives, agreements have been made regarding the minimum available liquidity and solvency targets. These ratios will be monitored periodically for movements, in both the short and long term. In addition, the long-term forecast also continuously monitors for any movements in net debt and current ratio. Any major adjustments to planned investment in, for example, real estate, infrastructure or education and research activities could lead to a different picture. Of course, every investment decision must be tested in terms of whether it is acceptable in terms of the primary objective of the funding policy and the targets agreed for the ratios. Every time that the LTHS is reviewed and amended, it will be essential that sufficient attention is devoted to the financial implications, possibilities and limitations.

To conclude, UT has plenty of room for manoeuver when it comes to managing future financial risks. Ultimately, Strategy 1 involves a lower investment requirement and, as such, would provide greater flexibility in the event of less favourable financing conditions.

06 LONG-TERM FINANCIAL OUTLOOK 48

2017 - 2021 Period Description

Strategy 1

Strategy 2

Accomodation ITC on campus Accomodation Health Accomodation Policy Departments + Executive Board Accomodation users of Citadel building Upgrade of UCT accomodation Flexible work spaces LISA and CES in Vrijhof building Expansion of catering facilities Expansion of parking facilities on campus Total direct investment under strategy

xx.xxx.xxx xx.xxx.xxx xx.xxx.xxx

xx.xxx.xxx xx.xxx.xxx xx.xxx.xxx

xx.xxx.xxx xx.xxx.xxx xx.xxx.xxx xx.xxx.xxx

xx.xxx.xxx xx.xxx.xxx xx.xxx.xxx xx.xxx.xxx

Investment in maintenance and replacement Investment in renovation As yet unspacified investment from Real Estate Plan

xx.xxx.xxx xx.xxx.xxx xx.xxx.xxx

xx.xxx.xxx xx.xxx.xxx xx.xxx.xxx

Total rest of investment in Real Estate

xx.xxx.xxx

xx.xxx.xxx

Total investment in Real Estate (2017-2021) Scope for investment to 2021 Surplus / short fall(-)

xx.xxx.xxx xx.xxx.xxx xx.xxx.xxx

xx.xxx.xxx xx.xxx.xxx xx.xxx.xxx

111.000m2 8.000m2 5.376 4,8%

114.000m2 9.100m2 6.476 5,5%

xx.xxx.xxx

xx.xxx.xxx

current space available: 101.300 m2 current vacancy: 6.000 m2 current vacancy lettable 3.376 m2 (3,3%) current: 3,3%

based on avg charge €xxxp/m2; current € xx.xxx.xxx

06 LONG-TERM FINANCIAL OUTLOOK 49

7 SUMMARY OF DECISION AND RELATED CONSIDERATIONS

50

07 SUMMARY OF DECISION AND RELATED CONSIDERATIONS This chapter describes UT’s decision-making procedure, including the relevant strategic and economic considerations. It can thus be read independently of the rest of this document and summarizes the chosen housing strategy.

On 30 May 2016, the Executive Board (EB) adopted a proposed decision on its spatial plans for the period to 2025, based on the draft version of the LTHS and the relevant recommendations advanced by the University Education Committee (UCO), the University Operations Committee (UCB), the Consultative Session of the Executive Board and the Deans (EB-D) and the Student Union (SU). On 29 June 2016, the University Council and the Supervisory Board approved the EB’s decision. The decision includes: · the adoption of the long-term housing strategy (LTHS) of the UT; · the accommodation of ITC on campus on O&O-Plein, in a new building to be constructed on the site of the Citadel building; · the accommodation of Health in the renovated Technohal building; · confirmation of the survey of supply and demand in relation to space for education and research.

This decision implies an investment of €xx million, optimized on the basis of strategic and commercial considerations. This amount is composed of €xx million for the new sites for ITC and Health and €xx million for investment in the necessary maintenance work and the phased realization of additional building space to accommodate the demand from various other sources.

Accommodation charges will remain unchanged from the assumptions made in the 2017-2020 framework memorandum.

07.01 Strategic Considerations Relating to Vision 2020 Synergy, impact, entrepreneurship and internationalization are the core values of UT (Vision 2020). The policy decisions to accommodate the ITC on campus and to form a Health cluster were based directly on these values.

The arrival of ITC on campus will mean increased opportunities for interdisciplinary cooperation in the field of education and research

(synergy), and the enhancement of the appeal of the campus for new international (Master’s) students and staff. Providing ITC with accommodation of its own on campus is important because of its successful teaching and research concept, which emphasizes cooperation between staff and students, under which research areas are used for both research and education purposes. In addition, ITC serves its own (growing) group of Master’s students with a non-subsidized Master’s programme. These students pay substantially higher tuition fees than those enrolled in government-subsidized programmes, and ITC also has PhD students who pay tuition fees. This group of students (many of whom are mature students) must be provided with appropriate buildings and facilities.

Many developments are underway within the UT-wide theme of Health (synergy). The market for education in the field of medical technology is growing rapidly. This is evident from the considerable interest that is evident in the programmes in Technical Medicine and Biomedical Engineering. The growth in these programmes cannot currently be accommodated.

Moreover, major technological developments are occurring in the field of Health that need to be applied by medical professionals. These professionals must be able to continue to develop in this field (cure and care), and this can best be achieved in a simulated healthcare environment. Such an environment brings together students, scientists, healthcare professionals and entrepreneurs (impact, entrepreneurship).

07.02 Real Estate as a Strategic Asset ITC and Health are two of UT’s distinctive strengths. However, the university campus is another of UT’s unique selling points. The solutions proposed for accommodating ITC and the Health cluster seek to incorporate facility sharing, to accommodate the required optimization in the supply and utilization of education-related areas, and to create flexibility. The development of the area around O&O-Plein is the best way to accommodate any future growth or reduction in the size of the university. If UT as a whole were to become smaller in the future, the buildings outside this area (specifically the Spiegel building and perhaps also the Cubicus building) could be vacated and divested.

07 SUMMARY OF INVESTMENT DECISION 51

Investing in the material and physical strengths of UT is vital in order to continue to play a significant role and accommodate future growth in the two areas mentioned. Other universities are also investing in these themes, as well as in their buildings and facilities, and without further growth we could lose the advantage that we currently enjoy.

The VSNU’s recently published educational vision identifies investment in flexible facilities in order to support campus-based education as one of the priorities for strengthening the academic community. A high-quality physical environment with modern buildings and facilities is an increasingly important part of attracting talent. A recently published report of the Higher Education Inspectorate indicates that universities are generally investing in real estate in a responsible manner, but it stresses the importance of a flexible real estate portfolio and realistic growth projections. The Executive Board has certainly taken account of the wider context of public sector decision-making in arriving at its decision.

07.03 Economic and Business Considerations In the very short-term, investment in the real estate portfolio is needed to accommodate developments in the university’s primary processes (educational facilities, office space, etc.). Without guidance in the form of a comprehensive investment plan, the university runs the risk that investment (even where smaller sums are involved) will occur on a piecemeal and ad hoc basis (in terms of both strategic and economic value), which will entail higher than necessary transaction costs. In the long run, such an approach would prove more expensive and would add less value.

Finance Model for UT Buildings and Facilities One aspect of UT’s model for distributing the costs associated with buildings and facilities is that depreciation costs (in addition to interest charges and other incidental expenses) are charged to users on the basis of a charge per m² for each spatial category. If the university were to choose to maintain its current real estate portfolio for the years to come, undertake no expansion and/or renovation work, and maintain accommodation charges at their current level, falling depreciation costs would mean that there would be a

growing surplus of funds in relation to the cost of buildings and facilities.

This is illustrated in chart 1 (see next page). This includes the investment in routine maintenance that will be required, amounting to approximately €xx per year. It excludes the costs of major renovation work. Chart 1 shows that there is scope in the coming years either for new investment in buildings (renovation, expansion, etc.) or for a reduction in accommodation charges.

Investment in Land and Buildings and Liquidity 2011-2015 Over the past five years, the university has invested relatively little in real estate. A deliberate decision has been made to ‘save’, in order to enable larger investment further down the line. The scope for investment has been enabled firstly through liquidity (approximately €xx million at the end of 2015) and, secondly, trough falling depreciation costs. Chart 2 illustrates the investments made in buildings and land by UT in relation to the depreciation on these for the period 2011-2015. It shows that real estate investment has amounted to €xx million over the past five years, while depreciation costs have amounted to €xx million. The depreciation on investments has contributed to UT’s cash flow situation and is reflected in changes in liquidity over recent years (Chart 3).

Financial Framework The above trends in real estate investment and liquidity form the basis of the economic and business considerations in relation to buildings and facilities. From the perspective of covering accommodation costs from the operational budget and from the perspective of liquidity, the potential exists to accommodate new investment in the years to come. It is important to emphasize that this assumes that no increase in accommodation charges would occur: these charges are to remain stable.

As can be seen in Chart 1, if accommodation charges and the volume of real estate on campus remain stable over the next few year and depreciation costs fall, new investment becomes a possibility. This scope for investment will widen further when ITC moves onto campus and begins to contribute to the cost of buildings through UT’s current cost distribution system.

Currently, ITC covers all its own accommodation costs (which amounted to

07 SUMMERY OF INVESTMENT DECISION 52

around €xx last year). It will no longer be liable for most of these costs after it moves onto campus. ITC will be able to cover the costs associated with the planned new building in a responsible manner.

——income from accommodation

Chart 1:

——

expenses for accommodation

Coverage accommodation against expenses (depreciation) accommodation

——— investments

——— depreciation

Chart 2: Investments and depreciation 2011-2015 (amounts in M€) Note: Transfer of investments 2015 from DOG BV and TTOG BV to UT are excluded. (M€ 7).

——— liquidity and financing buffer

Chart 3:

——— liquidity

This assumes that this amount will cover the scope for investment of €xx million until the end of 2021, without the need to raise accommodation charges at the university level. This does not take account of the proceeds from the sale of the current ITC building. All investment must be funded from within this scope for investment; this includes not only the investment needed for the Health cluster and ITC, but also the required investments in building maintenance, renovation work (which is limited during the period to 2021) and any other real estate projects resulting from the implementation of the LTHS that have yet to be defined.

The liquidity forecast does not impose any restrictions on the implementation of the LTHS. Chart 4 shows the liquidity forecasts for the period 2017 to 2025, based on UT’s long-term budget and investment spending on annual maintenance of €xx. In addition to investment in real estate, there remains ample scope for investment in other facilities, such as ICT and research infrastructure.

In conclusion, the liquidity forecast implies no restrictions on the implementation of the LTHS. However, there is one limitation as far as the scope for investment on the basis of the revenues and expenses associated with real estate is concerned (Chart 1). The volume of investment is, at €xx million, well in excess of the available scope for investment of €xx million. To prevent any increase in accommodation charges, either the implementation of this must be put on hold or the plans must be adjusted by €xx on a tasksetting basis. This must be reflected in the further development of the LTHS.

——— lower limit

Liquidity 2011-2015 (amounts in millions of euro)

07 SUMMARY OF INVESTMENT DECISION 53

Financial Effects and Risks Associated with the LTHS Ratios The implementation of the LTHS will, naturally, result in a reduction in the liquidity of UT. Liquidity will decrease to €xx million (based on the balance sheet), and current ratio to 1.17 xxxxxx. However, this would still be well above the lower limit of 0.5. Because it would be financed from the university’s own budget, the implementation of the LTHS would have no effect on solvency (shifts on the assets side of the balance sheet).

Interest risks UT took out three loans from the Ministry of Finance in 2009 to finance real estate investments. There is a risk that when these are reviewed in 2021 and 2025, the market interest rate could be significantly higher than at present. In view of trends in interest rates over recent years, however, this risk would appear limited until 2021. Given the current costs of interest of approximately €xx compared with the €xx that is included in accommodation charges to cover this, any increase could easily be accommodated.

Chart 4:

Liquidity Forecast for 2017 to 2025 (in millions of €)

—— liquidity and financing buffer

——— liquidity ——— lower limit

Vacancy rate If the LTHS is implemented, the vacancy rate will increase to a maximum of 5% (€xx per year). This is higher than the target vacancy rate of 3%, and also higher than the current vacancy rate of 3.3% (€xx per year). The Technohal building is current real estate and is in an extremely convenient location for either Health or ITC. It is suitable for the Health cluster in terms of the programme of requirements, even though it is larger than necessary for the growth scenario chosen for Health. In economic terms, it represents a suboptimal situation. However, the demolition of the Technohal building and the construction of a smaller new building in its place, quite apart from the consequent loss of the special architectural value of the building itself, would also pose significant problems in view of the asbestos issue and the disruption that would be caused to the operation of the university. As such, this option is less attractive than redevelopment of the Technohal building.

An integrated approach Without the relocation of ITC onto campus, the redevelopment of the Technohal building would not be possible from a business-economic perspective. Without this relocation, the redevelopment of the Technohal building would simply result in an increase in the amount of floor space available on campus and a consequent increase in the vacancy rate, which would constitute a burden on UT’s everyday running costs. ITC’s current building meets the needs of the faculty in terms of quality, but in quantitative terms is it too large and insufficiently flexible. The relocation of ITC onto campus and the sale of the current ITC building will help to keep the amount of floor space available on campus under control. There is currently serious interest in purchasing the current ITC building. The Citadel building is a small office building with a limited number of larger teaching rooms that are evaluated poorly by those who use it. It has inadequate sanitary facilities and catering facilities for collective education.

Furthermore, it does not meet international standards of transparency, which specify that rooms should have windows on the corridor side. The recently installed LED lighting (€xx) could be reused.

07 SUMMARY OF INVESTMENT DECISION 54

Flexibility Given that a new building for ITC on the site of the Citadel building and a new location for Health in the renovated Technohal building would improve the ability of the university to cope with possible future changes in its spatial requirements, strategy 2 (see pages 40 and 41) is the preferred option. In the event of a fall in student numbers, there would be a commensurate fall in revenues. In such a scenario, the question would be how outgoings, including spending on buildings, could be reduced. In response to declining revenues, one option would be to sell real estate. The Spiegel building (6,500m²) would be a logical choice, because this property is the best suited to redevelopment by external parties. In the event of such a scenario, users of the Spiegel building could be relocated to other parts of the campus. The effect would be to reduce vacancy in the other buildings on campus; no immediate investment in renovation would be required and running costs would be reduced, provided the Spiegel building could be sold.

Furthermore, a more detailed analysis will be undertaken in relation to the various initiatives and spatial aspirations that have been examined as part of the LTHS and which can be accommodated within the chosen housing strategy and could be worked on in parallel to the relocation of Health and ITC. The follow-up process will be included in UT’s regular P&C cycle. The realization of all aspects of the LTHS will be optimally phased and planned in terms of both financial and substantive aspects via the annually updated real estate plan and the annual budget, both of which can be amended on an annual basis.

07.04 The Follow-Up Process Now that UT’s decision-making procedure has taken place, the programme of requirements for Health and ITC can be drafted in relation to minimizing vacancy, facility sharing and flexibility. It will be important to examine the demand for office space closely and to ascertain how workplaces can be made as flexible as possible, possibly in combination with project rooms / study areas.

The process of optimizing the timetabling process for teaching areas can also begin. It is important to conduct a detailed analysis of the supply of and demand for education areas, including both the classrooms that can be timetabled as (bookable) study areas and project areas. This does not just involve customizing / creating physical spaces, but also other ways of meeting the demand for education-related areas. It includes finding ways of creating a home base for students and fostering a sense of community, possible changes in educational programming, spreading and accommodating peak demand and expanding timetabling to evening hours or to 50 hours per week instead of the current 40 hours per week.

07 SUMMARY OF INVESTMENT DECISION 55

B3 OVERVIEW CURRENT SPACE IN USE EDUCATION RELATED AREAS: STUDY AREAS

Primary function

Additional Function

PRESENTED CAPACITY IN NUMBER OF STUDY PLACES APPENDIX 56

B3 OVERVIEW CURRENT SPACE IN USE EDUCATION RELATED AREAS: LECTURE AND SEMINAR ROOMS

PRESENTED CAPACITY IN NUMBER OF ROOMS APPENDIX 57

B3 OVERVIEW CURRENT SPACE IN USE EDUCATION RELATED AREAS: LECTURE HALLS

PRESENTED CAPACITY IN NUMBER OF ROOMS APPENDIX 58

B3 OVERVIEW CURRENT SPACE IN USE EDUCATION RELATED AREAS: PROJECT ROOMS

PRESENTED CAPACITY IN M² usable floor area APPENDIX 59

B3 OVERVIEW CURRENT SPACE IN USE RESEARCH SPACE

PRESENTED CAPACITY IN M² usable floor area APPENDIX 60

B3 OVERVIEW CURRENT SPACE IN USE OFFICE SPACE

PRESENTED CAPACITY IN M² usable floor area APPENDIX 61

B3 OVERVIEW CURRENT SPACE IN USE RESTAURANT AND CATERING FACILITIES

PRESENTED CAPACITY IN M² usable floor area APPENDIX 62

PLAN: SCHEMATIC PRESENTATION OF FACULTIES IN THE O&O-AREA

LEGEND

BMS S&T UCT / ATLAS ET ITC EEMCS

APPENDIX 63