Risk Factors Impacting the Project Value Created by Green Buildings in Saudi Arabia

Abstract

Green buildings are playing a pivotal role in sustainable urban development around the world, including Saudi Arabia. Green buildings subject to various sources of risk that influence the potential outcomes of the investments or services added in their design. The present study developed a structured framework to examine various risks that may lead to green buildings’ value destruction in Saudi Arabia. The framework initiates with identification of 66 potential risk factors from reported literature. A questionnaire compiling a list of identified risk factors was hand-delivered to 300 practitioners (managers, engineers, and architects) having knowledge of value engineering in the construction industry, and an overall response rate of 29.7% was achieved. Subsequently, descriptive statistics ranked the risk factors based on scores given by the respondents. The principal component analysis extracted 16 components, based on the likelihood of risk factors impacting the value created by green building design. Finally, the factor analysis grouped the 35 most significant risk factors in 5 clusters—i.e., 8 in functional risk, 13 in financial risk, 3 in operational risk, 3 in environmental risk, and 8 in management risk cluster. The study enhances the understanding of the importance of the risk factors’ impact on value creation. Based on the results, the value management (or engineering) teams and the top-level management can identify, manage, and control the risk factors that have a significant impact on the project value created by green building design.

Keywords

• risk factors
• value creation
• value engineering
• green building
• construction
• project management