By Daniel Mead, Head of Asset Management

Net Zero Carbon

As a response to the global climate emergency, the UK Government is committed to reaching Net Zero Carbon by 2050. At Bywater Properties, our whole team feels a sense of urgency around our responsibility helping to address the climate emergency.

The real estate sector contributes 40% of all global carbon emissions and we believe passionately that the solutions to our challenges as an industry lie in championing design and innovation; refurbishing where we can, building responsibly using low-carbon techniques where we can’t and always seeking expertise and excellence in everything we do. Our specialism in mass timber as one such low-carbon approach is central to that sense of responsibility.

Leasing Mass Timber Projects

Leonardo da Vinci apparently said that "simplicity is the ultimate sophistication" and this applies when communicating technical information in the leasing of real estate. Even when we think we are setting out the facts and figures clearly on our projects, the often complicated messaging can be tricky to convey to an audience of agents and occupiers that haven't lived through the lengthy design of the projects.

Alongside our leasing agency and design teams we have therefore been working hard to simplify our messaging connected to mass timber and low carbon approaches across a variety of channels - including standard leasing documents, such brochures and technical packs, social and print media and visual collateral including films and images.

Whilst the market audience is almost always intrigued and interested in how we are using mass timber and its role in delivering sustainable, low carbon, healthy and visually attractive buildings, there are a number of recurring questions that we and our leasing teams encounter on a regular basis. I thought it would be interesting and useful to answer some of these in public - with a little help from selected project team members.

What is Mass Timber?

Mass timber is the name given to the various different types of engineered wood that can be used as structural building materials, including Cross Laminated Timber ("CLT"), glulam and Laminated Veneer Lumber ("LVL"). Interest in these materials is rapidly growing as an alternative to carbon-intensive concrete and steel. Only a few developers have taken a pioneering step, Bywater among them, in overcoming delivery challenges and building at scale in mass timber.

We believe that the use of mass timber has a major part to play in addressing the climate emergency and we are leading the way in its use in the construction and refurbishment of workspaces across our portfolio of projects.

The use of mass timber in property development can reduce the carbon impact of a project and has a range of other benefits. Mass timber workspaces for example can be healthier in both the construction and the occupational stages of a project.

Over the last five years we have invested a huge amount of time and financial effort into the development of a deep reserve of intellectual property regarding the use of mass timber in development. This knowledge sets us apart from the majority of UK real estate developers and asset managers and puts us at the front of a growing movement to lower the carbon impact of our industry.

At Bywater we currently have four projects where we are working with mass timber. Paradise SE11 is the most advanced example, where we are using our knowledge to build 63,250 sq ft of best-in-class timber workspace, whilst producing only 413kg of CO2e per sq m of embodied Carbon. This is 587kg, or 59%, better than the current best practice in construction and 31% better than the 2030 Greater London Authority target.

Embodied Carbon - Paradise, London SE11

Other Frequently Asked Questions

1. Question - "Why is there steel and concrete in your Paradise building?"

Hybrid structures, Paradise SE1

Answer (Part 1) - Andrew Abraham , Feilden Clegg Bradley Studios (Architect)

"The hybrid structure of mass timber and steel framing maximises flexibility for spatial planning, allowing for an increase in area owing to the fact that steel elements are much smaller in size when compared to glulam.

A driving concept behind the building is to express as much of the mass timber as possible, and the external envelope has been designed in such a way as to showcase this, particularly at level 2 where the canted glulam columns sit behind a fully glazed facade.

The slenderness of the steel columns on the upper levels compliments the robust decorative terracotta facade and are coordinated with the continuous ribbon windows across the length of the elevation. Further, the use of steel beams internally allow for full flexibility for the internal layouts. Cellular beams allow for service runs to pass through the structure and provide the option for tenants to adapt to their needs accordingly.

Answer (Part 2) - Adrian Lim, Quartz Project Services (Project Manager)

"In the design development of Paradise, due consideration has been made to the engineering practicalities, but also finding a balance against technical detailing, fire strategy and procurement.

Initially, Paradise had been designed with the use of a steel framed core with pre-cast concrete infills, this decision was made to ensure that the overall ‘stability’ was maintained whilst minimising the embodied carbon target of the project.

With the introduction of industry guidance and legislation however, this required a mindset change in the technical detailing of the project, centralising the cores in a single location for the purposes of fire fighting. This created an opportunity to re-evaluate the core composition, but also how works could be completed with the interfaces of mass timber.

Working with the Main Contractor, Gilbert-Ash and specialist teams including structural engineers, Webb Yates Engineers, the use of concrete was proposed, factoring in the sequence of works, but also the wider benefits for the day to day activities during the construction phase. This also simplified the procurement of the project, reducing excessive interfaces of trades and risk factors associated with this"

2. Question - "Is more expensive to build using mass timber?"

Answer (Part 1) - James Morgan, CHP (Cost Consultants)

"The use of mass timber has become an increasingly popular choice for construction projects in the UK. Whilst on face value its use may be perceived to be more expensive than traditional alternatives, such as steel and concrete it has many resulting benefits which can provide cost savings in other aspects of a project. It is therefore important to consider all the following elements when weighing up the cost benefits and risks of utilising mass timber.

• Substructure / Foundations

• Frame and Upper Floors

• Mechanical and Electrical Installations

• Internal Finishes

• Construction Programme

• Supply Chain

Based on our extensive experience of mass timber projects, the cost differential when compared against traditional alternatives (steel and concrete) is often marginal when all the above factors are taken into consideration.

Notwithstanding the above, each project and site will need to be considered on its own merits and the use of timber needs to be well-thought-out from the outset to avoid inefficiencies and avoidable surprises!"

Answer (Part 2) - Pavlos Clifton, Bywater (Head of Development)

"Designing in timber from the initial stages of a project, using our understanding of the material, means a cost premium can be avoided. To some extent, the perceived cost premium in the industry results from designing with a concrete and steel mindset and then trying to switch to timber making it a change or addition. This also underlines the requirement of working with the best timber experienced project team from the very start of a project.

It is also important to highlight the time benefits of working with timber on a project, and the extent to which it can help speed up a construction project - the benefit of which can be important in shortening the overall project time and improving the overall financial performance of the project."

3. Question - "Isn’t cutting down trees bad and won’t we run out of them?"

Stora Enso Forest

Answer - Gareth Mason, Stora Enso (Mass Timber supplier at Paradise)

"Mass timber in Europe is made from PEFC or FSC certified forestry. To achieve these certifications, the forests have to be sustainably managed and follow strict harvesting and biodiversity regulations.

One key part of this forest certification process is that we harvest less than we grow, meaning that the existing forestry stock is not affected, and we are only harvesting the same volume or less that has grown that year. The result of these regulations is that over the last 30 years, forest stock in Europe as a whole has increased by circa 10%. While we are using more timber, this regulation means that the forests are growing in size, encouraging biodiverse healthy growth, rather than being depleted.

Stora Enso, is one of the largest private forestry owners in the World. Whilst we grow approximately 13 Million cubic meters of new timber every year, we only harvest around 9 Million ensuring strong forest growth. In a typical year, we plant around 62 million trees, and for every tree used they aim to plant 2-3 more in its place. We have now been in business for over 730 years, and this is only possible by ensuring healthy and increasing forests."

4. Question - "Will the occupational costs of a mass timber building be higher?"

Answer (Part 1) - James Simpson MRICS, Workman LLP (Property Manager)

"We do not anticipate that the running costs of timber buildings will be any higher than a steel-framed building of the same size. As with any modern development, there will be benefits in terms of efficiency of M&E Equipment and lighting specifications which will actually lead to a very competitive service charge budget and we are seeing this play out in our projections for Bywater's Paradise project."

Answer (Part 2) - Dominic Lion ACII, Gallagher (Insurance Broker)

"Obtaining suitably priced insurance for the completed asset of a mass timber or hybrid structure has been perhaps the biggest insurance sticking point over the last two years in this space.

Thankfully huge progress has been made, and continues to be made and a number of schemes such as Bywater's Paradise are laying the blueprint for how to overcome this challenge.

Whilst a pricing delta still exists, it is nothing like that perceived by many, or perhaps that which existed 3 or 4 years ago - furthermore, it continues to narrow as insurers become more comfortable with understanding what good looks like in a mass timber context. Future projects such as Built by Nature's Commercial Timber Playbook will only serve to improve this position further."

5. Question - "Is working with timber good for us?"

Paradise Interior Example

Answer - Dan Mead, Bywater (Head of Asset Management and Leasing - i.e me!)

Whilst scientific research available on the subject is relatively scarce, it is widely held belief in other global markets, where timber is more readily used in construction, that the material makes for a healthier construction site and workspace for end-users.

A study by the The University of British Columbia and FPInnovations (Link) found that the presence of wood surfaces in a room lowered sympathetic nervous system activation. Also, timber within buildings has been shown to improve physical and mental wellbeing in other ways. A study commissioned by Forest & Wood Products Australia (Link) found a strong positive correlation between the presence of wood and higher overall satisfaction and lower absenteeism levels, as well as improved concentration and productivity among employees."

6. Question - "Are Mass Timber buildings more valuable?"

James Heyworth-Dunne and Richard Dale, Ingleby Trice LLP (Property Advisors)

"Occupiers are increasingly seeking workspaces that not only answer some of todays pressing environmental concerns but also look to address more stringent future environmental accreditations. In this way they want to future proof their HQ. They want an office that is pushing the boundaries of what can be achieved by delivering a modern spaces with all the amenity required by forward thinking occupiers at the lowest environmental cost.

Whilst it is hard to attribute value to this from a financial perspective its value to the occupier today and the owner are clear. And the most valuable element is its low environmental impact.

The evolution of the investor landscape in recent years has been characterised by an accelerated focus on ESG, in particular environmental considerations to the extent that they are more quantifiable against both legislation (current and anticipated) and the various widely accepted benchmarks. We have observed, first hand, investors become increasingly robust on this criteria, indeed often putting it at the forefront of their decision making and now highly unlikely to deviate from it – even if a prospective investment opportunity satisfies all other criteria.

Although timber is in its relative infancy as a building material for Central London offices, with limited investment evidence having been created as a result, we do absolutely view it as a rapidly emerging part of this wider ESG focus and expect increasing investor interest in it as a result of this shift in priorities."

Simplicity is the Ultimate Sophistication

Whether Leonardo da Vinci actually said this is unclear, however what is clear is that the real estate audience, both in leasing and investment fields, is becoming more willing to consider and digest sophisticated information when it comes to sustainable projects.

From a leasing perspective we need to ensure that our marketing material is clear enough to set this information out, whilst delivering on the ultimate aim of selling the space to the market. We also need to ensure that we are ready and able to communicate this information clearly and respond to follow-up enquiries.

Hopefully this article helps with this, however we will continue to strive to get the message out there and will be sharing some further detail in the future on each of these themes.

In the meantime we are available for more questions.