Driving Value for Money Through Design

DRIVING VALUE FOR MONEY THROUGH DESIGN INTEGRATED WITH COST ANALYSIS

INTRODUCTION

Achieving value for money and a sustainable design are two project goals commonly assessed in the built environment today, but are we adequately supporting project decisions with evidence? How are consultants demonstrating that proposed material selection or specification is worth the budget allocation and will it achieve the requirements of the present without compromising the ability of future generations to meet their needs? Is there calculated evidence demonstrating the project has genuinely established value for money?

Design norms and trends can often find their way into the built environment with inadequate attention to their broader influence on a project. AECOM’s integrated consulting capability combining cost management and engineering, allows us to challenge design norms. With façade and services costs representing a significant portion of a building project budget, AECOM is investing in cost benefit analysis so our clients can ensure smart spending while also considering sustainable design.

PROBLEM

With design and cost often shared across multiple firms a holistic approach to design/cost review is difficult to achieve. A fire rated zone will affect the design of the doors, partitions, services and potentially façade and/or structure. A cantilevered floor will add structural transfers, require changes to façade design and often amendments to ceiling details. Often it is the cost manager who tracks this ripple effect during design progression. Time, consultant fees pressures and capital budget pressures can prevent sufficient reviews of both base designs and design changes. This can result in the adoption of a less efficient design and hence overall project outcome. All too often designs are not reviewed holistically to demonstrate value for money, particularly when designs are prepared by independent consultant firms working with competing philosophies.

THE SOLUTION

Gathering a team of engineers (including façade, mechanical, electrical and sustainability) and cost managers, AECOM undertook a study to review the benefits of designing a high-performance façade for a multi-storey project to realise savings in operational expenditure through mechanical efficiencies and whole of life energy reductions. The results supported a value for money outcome over the life of the building and proved further unexpected positive benefits. AECOM carried out this study on a theoretical Sydney central business district commercial office tower. The building represented a class B, Green Star rated, commercial building with 31 floors. To conduct this analysis, two façade specifications with improved performance ratings were analysed against a ‘baseline’ façade to determine the operational benefits of increased facade performance. The façade options investigated in this analysis include: • baseline façade: a standard curtain walling system, compliant with building standards, not thermally broken

• façade option one: equivalent thermally broken facade • façade option two: the highest performing façade, thermally broken and incorporating an insulated spandrel panel. For each of the façade options AECOM undertook the following investigation:

Thermal Modelling Establish accurate energy consumption data for the sets of defined input criteria and assumptions, including: • u-value: the measure of heat transmission through a building component (such as a wall or window) or a given thickness of material (such as insulation) with lower numbers indicating better insulating properties • shade coefficient: the measure of thermal performance of a glass unit (panel or window) in a building. This is the ratio of solar gain (due to direct sunlight) passing through glass relative to the solar energy which passes through 3mm clear float glass • spandrel height: non-transparent insulated panels separating floor levels.

Calculate Mechanical Load Taking into account local weather conditions, mechanical loads (W/m2) for each individual elevation were determined. This concluded reduced supply air was possible from mechanical systems as a result of better performing facades, plus indicated reduced peak loads and lower energy consumption (over a 35 year period)

Resize Equipment and Risers Resizing the plant, ducts and risers to reflect the changes in mechanical loads resulting from each façade specification scenario.

RESULT

The building benefitted from an improved facade specification in several ways.

Green Star rating An environmentally sustainable design that reduces energy consumption and CO2 emissions creates an increase in Green Star points. In order to calculate the theoretical value of a Green Star point, several recent similar projects were benchmarked to determine the ‘extra-over’ cost of achieving a higher rating before dividing the cost by the variance of the points.

Project Inputs Baseline Option 1 Option 2

U Value 3 2.3 2.3

Shade COEFF 0.35 0.26 0.26

Sprandel Height 0 0 1000

North Load (W/m 2 ) 78 69 60

West Load (W/m 2 ) 76 67 59

East Load (W/m 2 ) 70 62 55

South Load (W/m 2 ) 49 46 43

Findings Option 1 Option 2

Equipment Reduction peak cooling reductions impact mechanical plant size Peak cooling reduction = 109kW* Riser reduction per floor = 0.43m 2 OR 7.41%

Cost Benefits A reduction in plant size allows for increase NLA & improved energy performance from a better façade leads to energy savings ESD Benefits Due to improved façade performance energy and CO2 emissions will reduce. The reduction in CO2 contributes to buildings targeting Green Star ratings 37.6m 2 extra NLA = $2.687m $1.194m Energy Savings @ 2020 additional façade cost is $1.22m payback is by 5 years**

118MWh energy savings 6.6% energy per year & -7.7% CO2 per year*** 0.9 points = $280 by 2020 Peak cooling reduction = 212kW* Riser reduction per floor = 0.69m 2 OR 12.02%

59.5m 2 extra NLA = $4.251m $2.579m Energy Savings @ 2020 additional façade cost is $2.43m payback is by 7 years**

251MWh energy savings 13.9% per year & -16.3% CO2 per year*** 2.5 points = $780k by 2020

Reduction in mechanical capital costs Capital cost savings were anticipated from a reduction in mechanical plant size and riser dimensions. The decreased riser size, multiplied over 31 stories of the building, could lower cost and spatial requirements.

Net Lettable Area (NLA) The surprise outcome was that the NLA increased from the reduction in mechanical sizes. This opportunity presents a major commercial benefit. Overall the NLA gains from the reduced mechanical requirements appeared modest at +40m2 and +60m2 for façade option 1 and façade option 2 respectively. However, given the strength of the rental market in Sydney and the high annual letting rate, the NLA factor was determined to be the most beneficial operational cost saving. The income generated from the NLA increase was higher than the saving realised through energy efficiency and peak load cooling reductions combined. While the building performance demonstrated a clear benefit from an improved façade specification, AECOM’s goal was to demonstrate the benefit that existed through the investment in capital costs and to determine a likely return on investment period from operational savings. The following graphs on the next page demonstrate the return of investment period for each façade option.

Return on investment option one

4,600,000

3,600,000 5 YEAR ROI

-1,400,000 -400,000 600,000 1,600,000 2,600,000

TIME (YEARS) Annual Opex Efficiency: NLA and Energy Capital investment 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Return on investment option two

6,500,000

4,500,000 5,500,000

3,500,000 7 YEAR ROI

2,500,000

-2,500,000 -1,500,000 -500,000 500,000 1,500,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 TIME (YEARS) Capital investment Annual Opex Efficiency: NLA and Energy

CONCLUSION

Despite the buoyant construction industry in many parts of Australia, there is increasing scrutiny on capital costs which has resulted from an uncertain economy and project budget pressures throughout the private and public sectors. We believe value for money is the number one driver for projects. A holistic combined approach to both design and cost of our built environment, while also considering whole of life, generates a thorough review of design norms and results in greater value for money. This study provides an insight into the requirement for a higher focus on operational cost benefits associated with analysing capital spend and ensuring it demonstrates value for money. With a relatively short return on investment period, a multi storey city centre building can realise long term benefits through a high performing façade, a sustained annual reduction in energy usage and a reduced impact on the environment through reduced CO2 omissions, while importantly maximising revenue.

This article has been written by Stephen Clarke, Principal Cost Manager, AECOM.