Can sustainable construction improve viability?
The Business School, Trinity College Dublin
As cost consultants, we are often asked, “What is the premium associated with achieving sustainability targets?” The common assumption is that sustainability comes at a direct additional cost to the bottom line.
In the Republic of Ireland, the past few years have seen a series of unprecedented events impacting our construction market, with a series of impacts on the availability and cost of materials driving tender prices up a staggering 29 percent between the start of 2020 and the end of 2022.
Rampant inflation in the general economy has also seen multiple interest rate rises, making development funding more costly and further squeezing margins that were already under pressure.
However, there are many opportunities to bring about the necessary transformation of the construction industry and improve project viability by tackling the dual currencies of cost and carbon.
Five key considerations to reduce both cost and carbon are:
1. Refurbishment rather than re-development
The drive to be net zero carbon opens up the conversation about re-use and repurposing rather than demolishing and building new.
With the building superstructure typically accounting for 50 percent of the embodied carbon, the benefit of retaining an existing structure becomes clear very quickly.
We carried out a comparison of a new build versus a refurbishment of a 15-storey office building in terms of carbon, cost and time.
In terms of carbon, the new build generated an additional 600-700kgs CO2 per m2 than the refurbished option. The cost to offset this additional carbon would be in the order of €1m, assuming a carbon offset price of EUR80/tCo2e.
In cost terms, the reuse of the existing foundations and frame can reduce construction costs by 20-25 percent, depending on the extent of adaptation needed.
In programme terms, the refurb option could save 12-18 months compared with the new-build, which in turn would reduce preliminaries and bring the building back into use sooner, contributing additional rental income to the appraisal.
However, refurbishment would need to improve the building fabric to meet required u-values and would need to see wholesale replacement of the building services to harness the latest technology and make sure that the operational carbon performance in use is managed.
Depending on the age and design of the building being refurbished, one of the limitations might be that the floor-to-ceiling heights would not match that of a new build, and the grid is likely to be smaller, meaning the refurbishment may result in a compromised space compared with new-build, although with modern fit-out design often adopting exposed concrete ceilings there are design solutions that can work.
2. Adaptive re-use
Converting existing office stock to other building uses may help to overcome some of the downsides of converting for office use.
Residential conversions are some of the first to be seen, benefitting similarly to office retrofit in terms of carbon, cost and time, but without the requirement for higher floor-to-ceiling heights, the residential product does not have the same compromises as the office retrofit.
Residential can also work with the smaller grids of older office stock and also offer the potential to retain the existing solid facades and add insulation, as opposed to offices where replacement with Glazed facades might be preferable.
In Ireland, the office-to-residential conversion could be the perfect way to meet the parallel targets of increasing the housing stock and developing in a more sustainable way.
Compared with a new-build apartment block, the office-to-residential conversion can achieve a 15-20 percent lower construction cost, making a significant impact on the viability of a potential scheme whilst also substantially reducing the embodied carbon for the development by re-using the existing substructure, frame and solid facades.
3. Mass timber construction
In a recent report carried out by Turner & Townsend in North America, mass timber construction has seen an upswing, helped by changes to the regulations allowing timber buildings up to 18 storeys high where restrictions previously limited them to 6 storeys.
A direct comparison between mass timber and steel was carried out for an office development in Seattle, which found that the timber frame was 11 percent cheaper than steel and reduced the programme by 7 percent.
At the same time, the mass timber option produced 50 percent fewer CO2 omissions than the steel framed option, making this a very compelling proposition that wins from a sustainability and viability perspective.
Restriction on height might reduce the appeal in Ireland right now, but in certain applications, it could make the difference between an unviable scheme and a viable one, both in terms of CO2 and financial viability. One area we are seeing this employed in Ireland is logistics with timber framed logistics facilities, employing glulam timber structures in lieu of traditional steel framing.
4. Modern Methods of Construction
The term modern methods of construction (MMC) is often interpreted to mean full volumetric prefabricated buildings, but it encapsulates a multitude of modern design and construction methods.
From a design perspective, this begins with fully adopting BIM from the outset for building design, to improve design coordination and drive out delays, errors and rework from construction stages.
The model can be thoroughly interrogated from a perspective of dematerialisation, options can be reviewed to decide whether to remove features such as raised access floors or basements to strip out whole layers of material in a building – generating cost and carbon savings simultaneously.
Taking this a level further, the principles of DfMA (Design for Manufacture & Assembly) can be employed, designing around standard product sizes to avoid bespoke products, site cutting and all the associated wastage, having simultaneous cost and carbon benefits.
As an example of this, Landsec’s The Forge has set out to drive both embodied and operational carbon down to as close to zero as possible.
The Forge promises to be the world’s first new build, a large-scale net-zero office building designed and constructed using a 'kit of parts' solution. The result is a structure that uses dramatically less material, creates less waste, and has a 19.4 percent reduction in carbon impact. This shines a light on the key role MMC plays in making the construction industry build in a way that is both cleaner and greener.
When considering construction methods, any move toward pre-manufacture will see an improvement in efficiency and a reduction in wastage. Pre-cast concrete formed in factory conditions will not see any concrete wasted, as well as improved speed of construction on site. On a recent scheme, the switch to a pre-cast frame saw a 2-month programme saving with the associated preliminaries cost.
When margins are fine all of these small improvements in efficiency, reductions in waste and improvements in predictability could help make the difference in terms of project viability and in delivering better sustainable outcomes.
5. Carbon accounting
We have evolved our role and capabilities as cost managers to now manage and account for the two currencies of construction – cost and carbon.
Better understanding and the consistent measurement of embodied carbon emissions enable comparability of results, benchmarking and target setting to achieve desired carbon reductions, in the same way we treat capital cost.
With the currencies of cost and carbon so intrinsically linked we developed an integrated approach to cost and embodied carbon accounting through our digital cost management platform. This allows us to provide four key benefits to our clients:
- We can provide clients with a reliable assessment of the cost impact of carbon reduction strategies and interventions.
- Our carbon calculator is deployed from the outset of the project, drastically improving the chances of achieving target carbon outcomes.
- We are able to quickly assess both cost and carbon impact on design alternatives, allowing clients to make data-driven, timely and informed decisions.
- The integrated approach avoids delays and design re-work down the line. Reduction of the potential for abortive works and costs associated with same.
In summary
With 2030 coming rapidly into focus, there is an onus on us as an industry to drive change to be able to meet the targets we need to in both construction and operation of the built environment.
Currently in May 2023 with an exceptionally high cost of construction and rising interest rates, we must also seek ways to make developments viable, to construct in particular the vast numbers of housing needed to help alleviate the current housing crisis.
With the right mindset from the outset of a project, these two [sustainable development and viability] apparently conflicting demands can actually exist hand in hand, with the drive for sustainability supporting improved viability.
© 2023 Turner & Townsend