This is the conclusion of the Delft researcher ir. Alexandra den Heijer, university lecturer real estate management at the faculty of Architecture in the three-part research report 'University Real Estate Management' commissioned by those responsible for real estate at the thirteen universities. It is meant to make a contribution to the recognition by the education ministry of the real estate problems at universities.
In September 2000 the Education ministry formulated new guidelines for uniform financial reporting in higher education and scientific research. These guidelines, which also influence the way in which real estate is valued and written off, use investment amounts from the past. That these regulations should not be applied unthinkingly Den Heijer demonstrates in part B (Cost and assets) of her report.
Den Heijer advises the universities to include an extra replacement reserve in their budget - besides the amount necessary for writing off on the basis of ministry guidelines - or at least allow for the higher amounts necessary for new real estate investments. When determining this extra reserve the starting point should be the so-called current renewal investments, or the amounts necessary to adapt buildings to the newest functional and technical demands. Calculating the annual reserve can be also be used in arguing what the (real estate) deficit of the universities is and that this deficit remains invisible if the universities only follow the ministry guidelines', according to Den Heijer.
In the past years a number of universities tried to bridge the gap that was developing between the historical cost price and replacement value of the buildings by saving an extra amount or investing in stocks. 'These universities were surprised by Secretary Hermans' decision of July-August 2001 that from 2003 universities could no longer make 'risky' investments with their money', according to Den Heijer.
The consultation body of people responsible for university real estate - the Consultation Body Housing Institutes (HOI) - has now decided to design a simple model that anticipates the necessary real estate investments in the future. Morover, in response to the research done by Den Heijer the HOI is planning to set up a databankwith project data of recent investments in real estate of universities and comparable institutes. This to gain more understanding of the future costs and the reserves to be created, with the help of these benchmark-data.
Last week the university real estate experts went on a study trip to the United States to go to their colleagues there for information. In five days seven universities are visited, among them MIT in Boston, Harvard, Yale and the Columbia University in New York.
