Mass timber projects are on average 30 percent faster to build. Speed with mass timber is due to the prefabrication of large components that are ready to screw into place. Waiting 3 weeks for concrete floors to set can be eliminated with CLT flooring, which can be up to 16.5m x 4.5m in panel size (Red Stag only).
Construction time impacts costs in several ways:
- P&G - site overheads are carried over a shorter time period. Big ticket items like scaffolding, crane time and lifts, and labour are minimalised.
- Developers also need to factor in the impacts of longer construction programmes on:
- Adverse market movement risk – on property values and cost escalation.
- The longer carrying cost of land, design/consent fees, and overheads.
- Early sale or tenanting, and the time value of money from that, calculated either as an interest saving or as the early re-deployment of profits to the next development.
See details for these calculations for the Clearwater case study below.
Typically mass timber material costs have been slightly higher than traditional, although time savings outweigh this. However in recent times steel prices have increased over 40 percent, and availability and lead times for steel and concrete have pushed out to as much six months.
In the meantime, the opening of the local CLT factory at Red Stag has brought competition and reduced costs of CLT in New Zealand. It has also provided significant capacity to the market, without the risk of international shipping.
Consumers and businesses are increasingly demanding sustainability in the buildings they buy or lease. The focus has turned to the ‘embodied carbon’ of the materials used because this has the biggest impact on climate change. This will soon be regulated in New Zealand through the Building for Climate Change programme. Businesses are starting to demonstrate their sustainability credentials through their buildings.
As a result there is a growing evidence base demonstrating premiums for mass timber buildings. For example, Lend Lease in Australia have reported that their mass timber office buildings in Barangaroo Sydney and Brisbane have attracted an estimated $50-75/m2 and $25/m2 lease premium respectively. This represents a 4-8% premium compared to traditional materials.
Clearwater Case Study | Logic Group
Mass Timber vs Concrete/Steel | Cost Comparison
***Time Difference Impact on Cost:
- Delay - Weeks | 10
- Market Risk - per week | 18,000 | Adverse property market move risk of 5%/yr on $18m value development is $18,000/week risk
- Carrying cost impact - per week | 6,000 | Carrying cost of $3m land, Design/consent fees $2m and H/O overheads $1m. Total $6m at 5% is $6,000/wk
- Completion settlement - re-deploy profit - week | 19,471 | Assume developer re-deploys $2.7m (15%) profit in next dev worth $6.75m at 15% profit in next year
- Delay cost TOTAL | 434,710
Mass Timber vs Concrete/Steel | CO2 Emissions - Structural Comparison Only
|Building||Upfront Carbon Measured in Kilogrammes|
|Mass Timber||-87,420 kgs|
|Steel/Concrete Hybrid||794,682 kgs|