High-Rise Office Towers - Cost model, May 1997

Introduction

With Kuala Lumpur’s new Petronas Towers currently holding the title of world’s tallest building, it is clear that the USA no longer has a monopoly on the construction of high-rise towers. There has been a resurgence of competition between cities to build to extreme height. The 443 m tall Sears Tower was the world’s tallest building for 22 years, but Petronas Towers is likely to be overtaken by the turn of the century.

Demand for office space in tall buildings is driven by economic, social and political factors. Restricted development areas, highland values and commercial dynamism have led to 50% of office accommodation in Hong Kong, New York and Tokyo being located in high-rise developments.

In the City of London, only 5% of office space is in tall buildings. Recent successful marketing in London of refurbished towers as managed buildings for multiple occupancy is evidence of the increasing demand for high-rise offices in the UK.

Asia will be home to nine out 10 of the world’s tallest buildings scheduled for completion by the millennium, but demand for office space in the Far East varies from country to country. Buoyant conditions in Hong Kong and the Philippines contrast with oversupply in parts of China, Indonesia and Thailand. Supply is matching demand in Singapore and Australia, although interest in speculative development is re-emerging in Sydney and Melbourne.

Development criteria

Structural, space planning and safety issues influence the cost and efficiency of tall buildings. Typical construction difficulties faced when handling materials, forming the structure and managing by the scale of operations and the complexity of the technology.

Furthermore, building efficiency is reduced by the space taken by the structure frame and by vertical distribution/circulation. At more than 30 storeys, net to gross rations of 70-75% are common. Greater efficiency can be achieved through the use of deep-plan space. In Germany, where building codes dictate shallow floor plates of 8m window-to-core, efficiencies of 60-70% are common. Table 1 (right) summarises the reduction in building efficiency with increasing tower height.

Concrete-framed structures with large members and solid external cladding systems are associated with lower levels of efficiency. The impact of the structure is determined particularly by the extent and thickness of structural walls in the core and by the design of load-transfer and bracing systems. However, as most floor plates are relatively shallow, to permit clear-span frames, the impact of column density in lettable areas is neglible.Design and construction cost penalties are directly related to the height of the building. In countries such as Indonesia, premiums on the cost per square metre can be up to 25-30%.

Counteracting wind loadings adds significantly to costs, affecting both frame and curtain-walling elements. The effects of wind loads increase disproportionately to the height of the tower. Table 2 (far right) gives the quantities of steel required to resist gravitational and wind loadings.Resistance to wind loading relies on the action of bracing to provide stiffness to the structure. Depending on its design, bracing that introduces complex, three-dimensional structural joints into the frame can add significantly to costs.

Overall building height affects other costs. Larger and faster lifts are needed, the capacity of centralised plant and distribution systems is increased and extra provisions need to be made for life safety installations.High-level construction brings cost penalties in the additional time and resources needed for the vertical movement of manpower and materials. Costs can be cut by reducing the total number of craneage elements, improving site co-ordination and making additional investment in plant and management resources.

Extra costs are partly offset by the efficiency gains obtained from repetitive and mechanised site operations. Working on a floor-by-floor basis also increases opportunities to sequence and segregate trade operations more efficiently.

In highly competitive development markets such as Hong King, land prices are high and the costs of a site and its finance can represent up to three-quarters of the overall project cost. Speed of construction is, therefore, a key design criterion.

Developments are commonly built using fast-track techniques and are completed in phases. In the USA and UK, speed is achieved by integrating design and construction and through the use of structural steel in the core and frame with lightweight, dry construction of lift shafts and risers.

The price advantage of concrete over steel in the Far East has limited the use of steel there. However, with their superior skills and technology, Asian concrete specialists can achieve floor construction rates of four to six days.Mixed-use skyscrapers are common in the USA and the Far East, with retail, office, hotel and residential functions stacked vertically. Mixed-use buildings optimise the space available, particularly those where the tower tapers and floor sizes get smaller as you go higher.

Development economics

Tall buildings are generally more expensive to construct per square metre; they also yield less lettable area and are more expensive to run than conventional office buildings. They are constructed partly as a response to extreme land values but also because of the technical challenge and the political and economic prestige associated with sheer height. They facilitate, and benefit form, the high degree of agglomeration that is required by commercial activities in city-centre locations.

Construction costs are summarised in Table 3 (left). High-rise development in the Far East ranges from 30 to 50 storeys, whereas activity in Europe lies within a range of 20 to 50 storeys. Super high-rise buildings in excess of 801 storeys.

European costs are relatively high, with premiums 40-60% higher than Hong Kong and Australia, the two most expensive Pacific Rim countries. The cost differential is most marked in Indonesia, where there is a 25-30% premium on rates per square metre for super high-rise buildings, and in Europe, where the UK a premium of up to 15% can be expected. Elsewhere in the Far East, premiums range from 7-10%.

The increased construction costs and low building efficiencies associated with high-rise buildings are not always offset by enhanced rental streams.

The short leases used in most overseas markets are well adapted to the need to secure a flexible, diverse tenant base for large multi-occupant buildings. The UK’s preference for long leases is a response to institutional funders that want stable long-term rental growth. This discourages multiple-occupancy building. However, developers of newly refurbished towers in the City of London have adopted more flexible lease terms.

Structural and services design

Architectural and sociological factors play an increasingly important role in the marketing and viability of tall buildings. The quality of the space for tenants and the acceptance of the building in the city environment can influence the structural solution.

The main characteristics of the generic structural forms are:

• Frame: a moment frame that may have internal walls or cores to add to the overall building stability. The system requires deep floor plans to generate enough lateral stiffness.
• Shear wall: a simple frame stabilised by an arrangement of stability walls and cores. Central cores are often used to provide stability in order to keep the façade open.
• Outrigger: a system that mobilises the outer frame of the building with “outrigger” arms in addition to the internal core structure. Use of an outrigger system dictates a precise relationship between the alignment of the arms, the façade columns and the internal cores. Columns are widely spaced and the façade beams are used to resist gravity loads only.
• Tube: the entire external frame acts as a large tube, leaving the internal space column free. Greater bending stiffness is gained by having all the structure at the edge of the floor plan. Columns are closely spaced and façade beams are usually deep.
• Braced tube: large mega-columns braced at several-storey intervals are used to transfer vertical bending forces to the ground. The bracing interrupts the external views but the intermediate columns are smaller than for a plain tube structure.

Frame and shear wall forms are more suited to medium-rise structures. For taller buildings, there are no hard-and-fast rules about whether an outrigger or tube structure is most suitable and there is no specific cut-off for any given generic form. The decision largely depends on: Building form, including overall building shape, location of columns and bracing, relationship of columns to planning grid, and size and thickness of cores.

Material efficiency, based on the lowest cost solution. Calculations for the total cost should take into account the size of the structural members and their effect on lettable space, and the optimum speed of construction. The latter needs to balance the costs of accelerated site operations against savings on finance costs and increased production of revenue.

With very few exceptions, tall buildings are designed with a totally sealed external envelope, and rely on the performance of the building envelope and intensive building services installations for environmental control. Standards for environmental control are generally dictated by the operational requirements of occupiers. Extreme climatic conditions, such as the high humidity found in Hong Kong, Indonesia and elsewhere in the Far East, place additional demands on environmental control systems.

Table 4 (left) summarises key services design criteria. Requirements for lighting and small power loadings are relatively consistent, but ventilation standards are higher in the UK. Lift service levels are defined as part of the requirements for Grade A international office accommodation.

Depending on their environmental performance, cladding systems can improve energy-efficiency levels. High insulation standards, low air leakage and good levels of naturallight transmission contribute to the control of the internal environment and the reduction of energy costs. Achieving the correct balance between curtain walling and HVAC costs, insulation standards and cladding panel thickness and the optimisation of heat and light transmittance through glazing are complex issues and have an impact on the long-term operation of the building. For example, the triple-glazed , ventilated curtain-walling system developed for the Commerzbank has made it possible to naturally ventilate tall buildings.

A comparison of recent schemes in South-east Asia ranging in height from 40 to 90 storeys has shown that 11-16% of gross floor area is taken up by plant rooms, lift shafts and service risers. Provision for communications distribution is becoming increasingly important with growing demand for intelligent building installations, management and controls systems and business technology.

For full information technology flexibility, up to 2% of gross floor area should be allowed for riser space.

Space planning and floor-plate sizes

Space planning criteria are detailed in Table 5 (left). The table illustrates the degree of variation in development criteria that can affect overall building height, structural loads and capital costs.

Minimum floor-plate sizes are determined by market demand and the economics of construction of slender buildings. Generally, minimum floor-plate in excess of 1000-1200 m2 are required by tenants in Europe and the Far East, although floor-plate sizes down to 700-800 m2 are becoming more common in North America, Indonesia and Singapore. The principal drivers behind the economics of floor plates are the ratios between lettable and gross areas and between wall and floor areas.

Lettable to gross ratio is determined by the size and depth of floor plate and efficiency of core planning. A tower with a relatively large floor plate, such as London’s Canary Wharf tower, can achieve a lettable to gross ration in excess of 80% with floor plates of 2500 m2, when depth of space exceeds 11 m. In contras, a slender towersuch as the Messturm, Frankfurt, which has a floor plate of less than 1400 m2 and a shallow wall to core dimension of 8 m, has a lettable to gross ration of 66%. Sensitivity to the effects of height on the lettable to gross ratios decreases as floors increase in size. Towers with large floor plate , such as Central Plaza, Hong Kong (81% overall efficiency), or Canary Wharf, are highly efficient.

The wall to floor ratio achieved on tall buildings typically ranges from 0.35-0.45. Deep-plan towers require greater floor-to-ceiling heights to maximise daylight penetration, but with their relatively low wall to floor ratio they benefit form reduced overall external wall costs.

Overall storey height requirements are reduced by economic structural design and by the limited use of raised floors outside Western Europe. On a 50-storey building, an overall height saving of 5 m will be achieved for every 100 mm reduction on the slab-to-slab height.

Tall buildings without large internal spans benefit form column-free space, as structural loads are taken by the core or the perimeter frame. The determinants of the planning grid are the centres of perimeter columns and framing to the external walling system (tabe 6, left).

Lifts and transport issues

Tenants demand a high lift-operating capacity and short peak waiting times of, commonly, less than 30 seconds. These factors, combined with the physical limits on lift shaft numbers and the speed of cars, place constraints on design. Management of the lift operation by vertical zoning and the doubling up of lifts in a single shaft separated by a “sky lobby2 minimise waiting times. Double-deck express lifts have also increased system capacity, but have a significant impact on the design of lobby areas. Service requirements dictate that an additional lift is required for each two to three floors (2500-3000 m2) of development. The correct balance has to be established between the additional floor space generated by height and the space lost through the need for additional lift shafts in determining optimum tower height.

On-site parking imposes additional costs on office development in the Far East, where developer parking requirements of one space per 50-100 m2 of office space will generate the inward or outward movement of 9-10 tonnes of goods and other material per week.

Life safety

The size of a tall building’s population introduces life safety issues relating principally to the management of the mass evacuation process. Tall buildings are generally designed to facilitate progressive evacuation in the event of fire, with the affected floor isolated by fire-resistant upper floor and core structures.

Typically, sprinklers, dry/wet risers and fast firemen’s lifts are provided for fire fighting. Critical to the success of a progressive evacuation strategy is a fire alarm and communication system that can support centralised incident control and provide localised alarm messages and directions for evacuation.

Procurement

Local practice continues to dictate the choice of procurement route. In the Far East, for example is let on lump-sum contracts, using bills of quantities and established forms of contract such as FIDIC or, in Hong Kong and China, the HKIA/RICS/HKIS standard form. Japanese and Korean contractors are having some influence on procurement options in countries such as Singapore. Design and build contracts are also being used to a limited extent in the Far East.

Where speed is essential, procurement is generally accelerated by use of negotiated lump-sum contracts rather than by the adoption of fee-based management routes.

Analysis of the model

The cost model details the construction costs of a 35-storey office development comprising 31 office floors, two-floor basement and two plant floors. The gross floor area is 67 500 m2, with a net lettable area of 44 300 m2, excluding car parking. Unit rates are based on current price levels in the City of London. Demolition and site clearance costs are excluded.