What is CREC?


In advanced European vocabulary "construction" is considered to cover the entire value chain of develop/own, design, manufacture, construct, recycle a building, infrastructure or other constructed assets. Today in Finland and elsewhere, a new expression Construction and Real Estate Cluster - CREC has been taken to use to cover all activities directly related to construction and real estate (buildings, infrastructure and other constructed assets = 60-70% of the national wealth). Compared to the above, CREC covers the whole life of a building, hence additional activities concern running (or operating...) the building, which more often is done by facilities management. According to ISO 15686 "Buildings and constructed assets - Service life planning", running a facility covers the following activities/costs:

Operating cost = The cost incurred during the normal operation of a building or structure, or a system or component including labour, materials, utilities and other related costs over the life cycle.

Maintenance cost = The cost incurred in conducting the combination of all technical and associated administrative actions during the service life to retain a building or its parts in a state in which it can perform its required functions.

Repair costs = The cost incurred in returning a building or its parts to an acceptable condition by the renewal, replacement or mending of worn, damaged or degraded parts.

Refurbishment cost = The cost incurred in rehabilitation (deprecated), renovation (deprecated) and modification and improvements to an existing building or its parts to bring it up to an acceptable condition.

A reason to this approach is the fact that major contractors are moving from plain construction towards taking care of the building/facility for its whole life. Also public-private partnership projects (BOOT, PFI; toll roads & bridges, schools, prisons etc) require this approach.

VTT, a leading construction/CREC research centre in Europe, makes annually a report about CREC in Finland. Some interesting findings are repeated below:

Figure 1 Construction and Real Estate Cluster - CREC, in Finland.

While in Finland construction represents 10% of GDP (or 14% if repairs & refurbishment are counted in), CREC represents over 26% of the same GDP. Accordingly, in the EU percentages are more or less same.

Figure 2 CREC Running Costs in Finland, year 2000.

Here it can be seen that in Finland heating (17%), repairs & refurbishment (16%), maintenance (15%) and cleaning & waste (14%) are the highest cost activities.

VTT also has written an initial definition for CREC: CREC serves its customers through providing, developing and maintaining the built environment and related necessary services. Also, as earlier said, CREC = develop/own, design, manufacture, construct, run/operate, recycle a building or other constructed assets.

All the aforesaid proves that construction and CREC are big, thus their impact in general and sustainability in particular are most important for whole society!