Cost model: Tall buildings

01 Introduction

Davis Langdon’s last tall buildings cost model was published in September 2002, when the Heron Tower had been granted planning permission. Other landmark London towers, such as the Leadenhall Building, the Shard, 20 Fenchurch Street and The Pinnacle, were due to follow.

These stemmed from high demand from the financial industry and residential sectors and increased developer confidence in the value of high rises. Tenants appreciate a landmark address and politicians are conscious of the symbolic role of tall buildings. The continued demand for residential property as a result of the buy-to-let phenomenon, low interest rates, steady house price growth and an imbalance between supply and demand have meant more than 130 residential towers (more than 20 storeys) are either being planned or are under construction in the UK.

Most commercial towers (more than 30 storeys) being developed are in London, perhaps because commercial rents in the regions would not support office towers and land values are lower.

02 Development and design challenges

Developers are more willing than ever to take on tall buildings, thanks to high demand and the benefits of high buildings, such as increased density and higher rent. But for the financials to stack up, the challenges of high-rise development have to be overcome:

• Income stream. Residents usually cannot inhabit towers during construction owing to single central core access, so developers can not realise their full income until completion.

In commercial developments, phased occupancy through multiple lift cores may be possible, enabling an accelerated and phased return (although problematic)

• Floor area efficiencies. Efficiencies are affected by height, as core and structural zones expand relative to the overall floorplate to satisfy the requirements of vertical circulation and resist wind loads

• Planning hurdles. The increased scrutiny of a tower’s architectural, environmental and economic impact means significant effort, time and money has to be invested to help it through planning and consultation processes

• Procurement strategy. The current state of the property and construction market is crystallising procurement strategies for large and complex projects. Capability and availability of trade contractors has to be considered. Particular attention should be paid to early and continuing involvement of specialists

• Programme. Towers take longer to build than short buildings. This costs money in construction and developer’s costs, produces uncertainty because of the difficulty in predicting future costs, changes to regulations and market demands

• Technical challenges. London’s schemes vary in shape and form, but all pose technical challenges related to developing commercially viable towers in constrained, sensitive locations, while satisfying stakeholders. In terms of safety and security, developers are taking a pragmatic approach, focusing on management issues and sensible enhancements to the base building.

Design challenges

A tall building faces more scrutiny than a lower-rise development owing to its visibility in the urban landscape. Architectural quality and iconic architecture are often cited as the main contributors to the success of the planning applications. This is recognised in PPS 1 and 3, which states the importance of design quality, and reinforced by Cabe and English Heritage.

In the UK, towers make headlines because of their interesting forms, which range from gherkins and cheese graters to lipsticks and walkie-talkies. Iconic architecture is a holistic term that should recognise the longevity of the design and not only fashion. 3D visualisation helps illustrate the impact of towers and is a prerequisite for a planning application. Standardising elements and high quality repeated details can pay dividends.

It is difficult to quantify the value of iconic architecture in securing planning permission and attracting tenants and purchasers.

However, a building being associated with a particular company limits secondary market potential, as in the cases of 30 St Mary’s Axe and the NatWest Tower (now Tower 42). While the former was sold on for a profit, the latter needed considerable refurbishment to make it appeal to occupiers, though it provided a successful second life.

• Floorplate efficiency: The shape and geometry of the building needs to satisfy the value and cost of the development equation. Floor area efficiencies go a long way to help the financials and are determined by the size of the floorplate and rationalised cores.

Slimmer towers are more expensive to build because of lateral restraints and wall:floor ratios, so they suffer from adverse floor areas efficiencies. Residential towers tend to be slender because of unit size requirements and daylight issues, and their designs respond to this trait.

03 Construction issues

Height comes at a cost and programme premium. To optimise both, new ideas need to be encouraged and experience from around the world should be taken advantage of. There are a number of issues that require thought and analysis, including:

Programme

Towers are built floor by floor so construction cannot be accelerated easily. Pace needs to be considered at the outset, through strategic programming and buildability reviews, to mitigate sources of delay. Procurement strategy is a critical function, not only in programme terms but to respond to market challenges.

The floor construction cycle contributes to programme pace and can be optimised by using standardised, prefabricated components that minimise the number of trades operating per cycle. Concurrent programming of design, procurement and construction activities can also achieve acceptable project durations.

The logistics of material supply focus on adequate craneage and hoisting. Co-ordinating deliveries and craneage slots is critical. To maximise labour efficiency, generous hoisting and welfare facilities must be supplied. This means locating toilets and canteens at regular intervals up the tower to minimise downtime.

Investment in sufficient labour resource is also essential. Work on a tower enables trades to be kept apart, so the site can be flooded with workers.

Structure

Structural frame, cores and upper floors amount to 15-25% of the construction cost in a commercial tower and 10-15% in a residential one. The design of the building (shape, massing and height) determines the weight and therefore the quantity of material required, which affects cost.

However, complexity is as important, with the number of members, simplicity of connections, ease of fabrication and erection and other factors affecting cost.

Core integrity and wind Core layout and wind loading also present challenges.

Core layout is critical to development efficiency and operational effectiveness and affects how the structure copes with wind. The elements influencing design are:

 

• Lifts. Factors include the number of lifts and their speed, size and arrangement, which affect space use and cost. In Broadgate tower, double-deck lifts were chosen, a solution that can reduce core size by 30%. However, this requires two level lift lobbies at ground and sky corridor levels.
• Structural integrity. Maintaining core integrity by positioning risers and duct branches at the perimeter minimises the number of openings required, facilitating services installation and maintenance.
• Air-conditioning. Air supply for fan-coil units are lower, so supply and extract riser ducts are more space-efficient than all-air systems.

Wind loads increase disproportionately with height, and slender towers are particularly sensitive to sway. To reduce this, a stiffer structural frame is required. Swaying can also be minimised by manipulating shape, geometry, surfaces and mass distribution. Use of dampers is a last resort on a structure below 200m.

The drag of airflow around the structure creates wind at pedestrian level, which can be mitigated by the use of additional elements such as fins on the edge of the form with canopies and planting at ground level.

Facade

Most tall buildings adopt unitised curtain walling. This entails storey-height elements fully assembled off site. Widths are typically 1.5m, enabling supply via hoists rather than cranes and reducing demands on hook time.

Part L says facade performance should be considered along with the mechanical and electrical systems that comprise the building’s environmental strategy. Residential towers are subject to Part L1, which concentrates on heat loss, so the facade must accommodate more solid panels than glass. Part L2 relates to commercial towers and concentrates on solar gain, which can be achieved by using louvres and photovoltaics, as in the Heron tower.

Facades contribute to controlling heat loss and gain. Active, ventilated facades afford high thermal performance and can respond to daily or seasonal changes too. A facade that enables natural ventilation or mix mode (both natural ventilation and air-conditioning), will achieve a cool interior. Where natural ventilation is the predominant mode, the facade can be designed to deal with the high wind pressures. The cost penalty is offset by reduced energy costs.

The facade needs to let in sufficient light while minimising glare for occupants and neighbouring buildings. It must also keep out noise and control reverberation.

Facades must be given particular attention when designing a tall building because of their aesthetic qualities, their contribution to environmental strategy and the range of costs possible. The costs vary for two principal reasons:

 

• The envelope, when expressed as a cost per unit of floor area, is sensitive to changes in wall:floor ratio, determined by building shape and floorplate size
• The wide range of architectural and specification options. The route to cost efficiency is through off-site prefabrication, simplicity and repetition of details.

M&E design

In tall buildings, M&E design is focused on providing enough capacity for the population density and load. Maintaining hydraulic pressure for water and coolant requires pressure breaks and multiple plant. Similarly, Part B: Sprinkler requirements now requires a shut-off valve on the wet riser every third floor in commercial use. In residential buildings, the requirement is for sprinklers in storeys above 20m.

Lift strategy affects design on all towers. Furthermore, until the lift strategy is resolved, core and structure design cannot be finalised. One driver is the period of time for users to get from the ground floor to their destination. The British Council for Offices rule of 30-second waiting time for a lift is not achievable in towers regardless of the strategy used.

Another contributor to the M&E design of commercial towers is the impact of potential tenant enhancements. In conventional buildings, this is not usually an issue as it is often left to tenants to fit out extra equipment in the roof or basement at their own costs. Furthermore, this usually involves a small number of tenants.

In a tower, retrofitting distribution infrastructure along with installing a new generator, plant or chiller for one tenant alone is costly. Multiply this by the increased number of tenants in a tower and the space and distribution premium throughout the building, and this makes it unviable.

Future upgrades can be catered for by designing in resilience. This contributes to the cost increase in M&E design, but is the only way tenant facilities can be catered for.

For residential towers outside London, air-conditioning has not been specified widely as market values will not support its installation.

In London, cooling is a prerequisite in towers owing to agents and sales advice, the values achievable and market expectations. This is becoming harder to achieve owing to the onsite renewables requirement prescribed by the Greater London Authority (GLA).

04 Sustainability

Initial costs and operational costs of towers may be high, but it can be argued that tall buildings are sustainable. They make better use of land than a building of the same capacity spread over a larger space and locating the tower near a transport hub can support the growth of a diverse city-centre economy.

The Shard at London Bridge provides a mix of uses over one of the busiest rail terminals in the country, adding to its green credentials (pictured).

The Greater London Authority prescribes the need to generate 10% of energy on site, which is set to be increased to 20%. Most solutions currently being developed involve a combination of sources ranging from photovoltaics to biomass.

Biomass offers a one-source solution but there are logistical issues such as source, supply, storage and transportation of sufficient woodchip to generate energy.

Eighty tonnes of woodchip are required for every 1MW of energy generated.

A single articulated truck supplies 15 tonnes of woodchip, therefore to generate 1MW, six deliveries are required. For an average tower, the 5-6MW of energy required every week equates to about 30 deliveries a week.

Biofuels such as rapeseed oil are more efficient in terms of volume, but their use is curbed by the Clean Air Act, which only allows biofuel generators of 300kW of energy.

For residential towers, the Code for Sustainable Homes specifies mandatory minimum energy and water use levels at a percentage better than those specified in Part L (2006). For a Level 1 rating (the lowest) the use of energy and water must be 10% better than those specified in Part L.

The use of visible sustainable technologies such as photovoltaics and wind turbines are limited owing to small roof areas on residential towers, however Vauxhall tower and Castle House at Elephant & Castle have integrated roof wind turbines into their designs.

It is clear that a holistic approach needs to be taken when considering a tower’s performance in sustainability terms, as the issues are wider than simply integrating renewable technologies.

05 Summary

Developing tall buildings involves a number of challenges and the range of potential costs is large. In Davis Langdon’s experience, there are a number of general factors that can lead to success:

 

• Understand the cost and value drivers at the feasibility stage
• Keep a building interesting, but as simple and buildable as possible
• Squeeze every square foot out of the floorplate
• Perfect the details and repetitive elements
• Settle the core design early, considering all factors that maximise efficiency
• Get the early input of a constructor on planning, programming and logistics
• Involve the main specialist trade contractors in the design process, obtaining their advice and buy-in to design strategy, detailing, methodology and so on
• Encourage ideas and teamwork at every level.

06 Residential vs commercial

In comparison to the cost model overleaf, which is a commercial tower in central London, the “average” above-ground benchmark cost for residential towers in London is considered to be £2,960/m2 with a range of ± £800.

The reasons for the large range are:

 

• Differentials in floorplate size
• Form, height and location
• Interior specification.

On a national basis, the average cost will be significantly lower owing to the varying cost bases and market expectations.

07 Cost model

This cost model summarises the shell and core construction costs for a notional landmark high-rise office building in central London. It totals 97,550m2 (1,050,000ft2) gross internal floor area over 55 floors (including ground) and three basement levels. It provides a total net internal area

of 62,245m2. This is predominantly office space, with about 1,860m2 of retail and food and drink space at the lower levels.

It achieves a net:gross floor area efficiency of just under 64% and an above ground net:gross efficiency of about 68%. The typical floor to floor height is 3.90m and wall:floor ratio is 0.55 (there are 55m2 of facades for every 100m2 of above-ground gifa).

Exclusions

Unit rates are based on price levels in central London in the first quarter of 2007 for competitively tendered packages under a construction management arrangement – all assuming an immediate start on site.

All non-shell and core items are excluded (demolitions and enabling works, external works, incoming services and fitting out works). Developer’s costs are also excluded (professional and statutory fees, taxation, insurances, finance charges, disposal costs), as are the costs of surveys, monitoring works and environmental impact assessments.

Also excluded are professional fees, VAT and site abnormals. The rates may need to be adjusted for specification, site conditions, procurement route and programme.