Changing the World One Building at a Time
How can a real estate developer change an industry threatened by unpredictable weather, volatile fuel prices, warmer temperatures?
TOM Climate Change Challenge
Changing the World One Building at a Time
Canary Wharf is London’s second financial district and has been under construction for over 28 years[i]. Its developer – Canary Wharf Group (CWG) – has built 34 of the tallest and best buildings in the city[ii]. They have expansion plans to double the size of the estate in the next 30 years[iii] – so the pressure of designing and constructing “climate change – proof” buildings is higher than ever.
What’s the big deal?
There are several facets of the real estate development industry that are affected by climate change:
- Construction process disruptions stemming from unpredictable weather are very probable. We’re talking about disruption of works, services supply and crane operations or higher proportion of construction work that needs to be redone because of weather damage[iv].
- Construction materials costs have been increasing by 4.85%[v] in the UK. For skyscrapers, most of these costs relate to high energy materials such as aluminium, concrete, steel, which are subject to volatility in energy markets (due to fossil fuel constraints and costs)[vi].
Source: “Turner Projects Continued Growth in Construction Costs”, http://www.turnerconstruction.com/cost-index, accessed November 2016.
- Maintenance, insurance and operation costs are also likely to increase substantially.
Most skyscrapers are only ventilated mechanically[vii], so weather patterns changes will increase the requirements for heating and cooling which, in turn, will increase energy consumption and CO2 emissions.
Moreover, the infrastructure (plants, supplies of electricity and other services) of such buildings are usually located in very deep basements or on the roof. Rising water levels and extreme weather can easily damage these pieces of equipment and the buildings, which in turn causes insurance and maintenance cost increases and disruptions to tenants/residents.
What to do about this?
As clients (corporations and individuals) have become more aware of the benefits of renting / acquiring sustainable properties, CWG started tracking sustainability metrics on its completed buildings and incorporating sustainable design considerations into the early stages of their projects. Construction operations sustainability also became a focus[viii]. In recent years, local authorities around the world have taken things one step further and are now requiring developers to use a sustainability assessment and certification method called BREEAM to obtain occupancy authorisations for their buildings.
Source: “BREEAM Weightings”, Paul McAlister Architects, http://www.pmcarchitects.com/blog/breeam/, accessed November 2016.
BREEAM provides guidelines for all stages of a project from design to occupation. Initially, the architects and engineers involved in the project take the BREEAM principles into consideration when putting together the design of the building (elements such as waste provision, types of façade, plant systems etc.).[ix] This design informs any material purchase decisions and therefore enables the developer and construction manager to generate the most sustainable procurement and construction plans.
For CWG, the journey of designing and constructing a building can be as long as six years. A building’s lifetime is, on average, 50 years[x]. This is partly why implementing BREEAM is no longer just a matter of having the most sustainable supply chain and materials (albeit it does a great job at addressing the issues outlined in item 2 above), but also looking at water and energy consumption of the buildings and transport requirements of occupants (see the BREEAM weightings chart above).
In my opinion, developers could and should do a lot more to make buildings more energy and water efficient. Even though Nest and other sensor based “smart home” technologies have been around for over a decade, new residential buildings are still designed and constructed without them. If you think office buildings don’t have a problem on this front, have a look at the picture in the banner. How many lights are still on? How much energy do you reckon we could we save by having movement sensors?
Given the residential[xi] (35,000 new homes) and office[xii] (approximately 16 million square feet of space) buildings construction pipeline in London, CWG can set the bar very high with their sustainability practices.
(798 words)
References:
[i] Julia Kollewe, “Canary Wharf timeline: from the Thatcher years to Qatari control”, The Guardian, https://www.theguardian.com/business/2015/jan/28/canary-wharf-timeline-london-building-docklands-thatcher, accessed November 2016.
[ii] Kate Allen and Arash Massoudi, “How Qatar snared the Canary”, Financial Times, https://www.ft.com/content/cea44a32-a886-11e4-bd17-00144feab7de, accessed November 2016.
[iii] Julia Kollewe, Canary Wharf spreads east with new towers and 3,000 homes planned”, The Guardian, https://www.theguardian.com/business/2014/jul/22/canary-wharf-spreads-east-new-towers-wood-wharf-new-homes, accessed November 2016.
[iv] “Disruption Claims in Construction Contracts”, Ivory Research, http://www.ivoryresearch.com/samples/construction-essay-example-disruption-claims-in-construction-contracts/, accessed November 2016.
[v] “Turner Projects Continued Growth in Construction Costs”, http://www.turnerconstruction.com/cost-index, accessed November 2016.
[vi] Dave Grossman, “Geo 5 for Business”, http://web.unep.org/geo/sites/unep.org.geo/files/documents/geo5_for_business.pdf, accessed November 2016.
[vii] Paul Cook, “How Temperature is Controlled Within a Supertall Skyscraper”, http://www.industrytap.com/temperature-controlled-within-super-tall-skyscraper/33152, accessed November 2016.
[viii] “Canary Wharf Sustainability Report 2015”, http://group.canarywharf.com/wp-content/uploads/sites/2/2016/07/canary-wharf-corporate-responsibility-policy-june-2016.pdf, accessed November 2016.
[ix] “RIBA Plan of Work 2013”, Royal Institute of British Architects, 2013, https://www.architecture.com/files/ribaprofessionalservices/practice/ribaplanofwork2013overview.pdf, accessed November 2016.
[x] “The Lifespan of Structures”, http://www.concreteconstruction.net/business/management/the-life-span-of-structures_o, accessed November 2016.
[xi] “London Prime Residential Pipeline”, Arcadis, https://www.arcadis.com/media/E/5/3/%7BE539C943-AD51-4F07-B74A-B4D47F59BB8A%7DLondon%20Prime%20Residential%20Pipeline%202016.pdf, accessed November 2016.
[xii] “The London Office Crane Survey Summer 2016”, Deloitte, https://www2.deloitte.com/uk/en/pages/real-estate/articles/crane-survey.html, accessed November 2016.
Thanks for sharing this interesting perspective Anca. The amount of water and energy used for lighting, heating, and AC in office and residential buildings is enormous. Just imagine how much electricity we can save in large cities such as New York or London when all buildings are converted to green buildings. I’m curious whether the “green” status of a building creates any competitive advantage in the market? Will it make the building more attractive option for tenants to consider? If the answer is no, perhaps governments need to set-up guidelines similar to BREAM as you mentioned above to enforce real estate developers to make these changes.
It is a very interesting topic because many Chinese real estate developers tried to design sustainable commercial and residential buildings. The challenge is the relatively higher costs involved in an energy-efficient building. Arguably, the total savings is far beyond cost of building these buildings. But both residents and developers would simply ignore the long-term savings and focus on short-term costs. Is there a way to convince developers to build more energy and water efficient buildings?