A Soft Economy
The age-old problem of Facility Managers doing more with less is as pertinent as ever. The latest NAB Quarterly Business Survey notes that Australia continues to face ‘a patchwork economy.’ While business confidence reduced a further four points to place it below the long-term average.
With lagging business confidence and ever-increasing demands on cost control, Facility Managers are looking at other ways to stretch their budgets, reduce tenant complaints and get the most from existing systems.
Active Air Rentals director Brad Sweeny explains why Facility Managers are increasingly choosing to supplement their ageing HVAC systems instead of replacing them.
Out Of Sight, Out Of Mind
‘HVAC systems should have annual maintenance checks. This regular maintenance helps the equipment run at optimal levels, reduces power wastage, extends the life of the assets and reduces the number of tenant complaints. But with ever-dwindling Facility Management budgets and HVAC systems being out of sight, out of mind, the maintenance period is often over extended.’
‘Under maintained HVAC systems end up being held together with band aid fixes which ultimately lead to multiple break downs or sub performance and spiraling tenant complaints.’
‘During an economic up-turn Facility Managers seem to have a slightly easier job convincing management of large capex projects such as replacing ageing HVAC systems.’
New HVAC Systems A Hard Sell
‘But during slower economic times, such as at the moment, companies are more selective on purchasing capital assets and want to ensure any investment has a tangible and acceptable return. Generally, new HVAC systems do not fall into this category. However, this doesn’t address the fact that the equipment is still ageing and the Facilities Managers are constantly under pressure to keep the air conditioning working.’
Opex Rather Than Capex
‘So instead of using capex to replace HVAC systems, Facility Managers are increasingly utilising opex budgets and renting HVAC equipment, such as chillers, to prop-up their ageing or under maintained equipment.’
This decision has a number of benefits as Brad explains, ‘Firstly, it deals with the problem quickly and efficiently; accountants tend to swiftly approve the cost as it’s an opex item and rental companies can generally deliver in tight time frames providing HVAC capacity when needed.’
Guaranteed Fixed Cost
‘Secondly, rentals makes both the accountants and Facility Managers happy as the agreements are for a guaranteed fixed, regular price over an agreed term, with an option to extend the rental period if required. This improves cash flow and accurate budgeting.’
Peace of Mind And Not Your Problem
‘Thirdly, Facility Managers have peace of mind with rental equipment. If something goes wrong it’s the rental company’s responsibility to fix it. And for long term rentals, maintenance is included in the price.’
No Hidden Costs
Facility Managers are also savvier to hidden costs. Brad explains, ‘Insurance, spare parts, and accessories are all required to ensure the equipment can operate effectively. With a rental they are all specified and included. Again, this helps with budgeting.’
‘Finally, renting provides Facility Managers with flexibility. They can quickly increase or decrease capacity depending on demand.’
‘While Australia goes through this soft economic patch Facility Managers are increasingly choosing to rent HVAC equipment as an easier and safer option.’
About Active Air Rentals
Active Air Rentals is Australia’s all round cooling, heating and power rental company. Specialising in hire and rental of temporary air conditioning, power generation, climate control and refrigeration equipment.
Founded in 1972 by Managing Director, Jim Sweeny, Active Air Rentals has grown from humble beginnings as air conditioner installers and sheet metal manufacturers, to an all round national cooling, heating and power rental company.
Today we are a multi-faceted business with four branches, two distribution centers and employing over forty permanent staff across Australia.
Active Air Rentals is renowned for providing outstanding service, excellent customer relationships and addressing difficult, unusual or specialised projects.
Active Air Rentals has over 40 years experience installing temporary air conditioning into every conceivable location. From crane towers to coal mines, from war ships to entire inner city villages, from emergency civil defence camps to enormous events such as the Australian Open and thousands of offices and server rooms along the way.
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