The Clean Energy Finance Corporation has recently launched its Timber Building Program to support the transition to net zero emissions, with a new $300 million fund that will encourage timber construction across the property sector.
In this webinar we look at the value proposition of Engineered Wood Products in mid-rise constructions, their compliance with new regulations and ESG requirements, and how a major global Quantity Surveyor practice manages risk on timber construction projects.
Danny: [00:00:13] Well, hello, everyone out there and welcome to this Insurance Business Live webinar in partnership with WoodSolutions. WoodSolutions is an industry initiative designed to provide independent, non proprietary information about timber and wood products. I'm Danny Wood, news editor of Insurance Business Australia. This webinar is timely because the construction industry continues to suffer ongoing supply chain and materials shortages largely as a result of the pandemic. And our panel today says that timber sourced from within Australia and internationally is a viable alternative to other, more costly and less available construction materials. Engineered wood can also be faster to install than other materials, and it's fire safe. So to talk this through, we have two presentations, one from Paolo Lavisci. He's program development manager with Wood Solutions. Welcome, Paolo.
Paolo: [00:01:11] Thank you Dan. Thank to you all attendees.
Danny: [00:01:15] And we have another presentation from Natasha Carter. She's director of Rider Levett Bucknall, they're a global construction and property consultancy. Welcome, Natasha.
Natasha: [00:01:26] Thank you very much for having me. Looking forward to it.
Danny: [00:01:29] Yeah, me too. So first up, we have a poll, but before we get to that, just some quick housekeeping. This webinar is being recorded and will be sent to everyone who's attending. It'll also be on our insurance business website so you can watch it again if you'd like to. There'll also be some time for questions from you people out there. So if you think of anything at any time, just use the chat box and and send your questions in. But let's launch our first poll and we're going to have a look in this at this poll in what is currently the major risk that may be incurred when procuring engineered wood products. And you have three options there to select. So is it a cost overruns by the producer due to variations in the raw material and energy? Is it bespoke design cannot be replicated by another supplier or c rain during transport and installation. That's probably one that we're thinking of now. So it's quite on some of the responses. Paolo, perhaps you could explain. Oh, here we go.
Paolo: [00:02:52] Interesting. So they almost nailed it. And of course, risk is a personal perception. But amongst the developers and builders that have been dealing with for the last five and a half years here in Australia, it's number two, a bespoke design that cannot be replicated by another supplier. So committing to a supplier which does something that they only can do is perceived as the main risk. The other two, they think they can handle it a little better than this one. And this is similar to what happens with cotton wool, for instance. Right. So they are used to that.
Danny: [00:03:34] Okay. Well, Paolo, we're going to hear a presentation from you first. So take take it away.
Paolo: [00:03:41] Thank you. Do we all? Can you all see my screen? Guys.
Danny: [00:03:51] Yeah. Looks good.
Paolo: [00:03:53] Look good to go. So why engineer wood products are a safe solution for mid-rise construction. First of all. But we are WoodSolutions is a part of forest and Wood Products Australia, which is a not for profit industry services company. Because of our nature we are independent, non-commercial and evidence based. We try to present data and and evidence from people experience and not just opinions. So we have a very visited, very popular website and my job within wood solution is the Mid Rise Advisory Partnership, which offers free support to developers and consultants. And we are supported financially 5050 from the Federal Government and a number of companies that accept that we keep independent, non-commercial access. So the commercial part, we leave it to them and the outline of the presentation, it is a bit of context and then design procurement, construction steps, risk in these steps and conclusion engineer wood products. By definition they are all strangulated, graded and kiln dried, so it means that also start and joist and plates within our light frame construction are engineering wood products. And the definition within the code is that the there is at least one dimension which is lower than 75 millimetres, so they are slender elements with cavities and therefore this attracts a certain approach with respect to the fire risk. On the other hand, the mass timber, the massive product for the code like cross laminated timber, glue and laminated veneer lumber within the assembly. They don't have gaps and they have a minimum dimension of 75 millimetres. So you may have noticed that there is a growing trend of using timber in mid-rise construction in Australia. It's still a niche market of course, but it's really significant and growing and these are all timber buildings and you may ask yourself why. That's because there are typical efficiencies and cost benefits that can be implemented and used by developers and builders when they design correctly and used correctly timber based for that. So differential value, improved safety, faster delivery, etc. These are all categories and we have some precise examples of what this means later on into the presentation. And you may ask yourself how this happened, how there is this trend, an easy way to design and construction with timber. And by the way, these are the naked version of the projects that you saw in the previous slide. So it happened also because we provided over five years increased awareness and confidence into the market by doing a lot of dissemination seminars, webinars, events, technical help desk, but mostly a lot of project related meetings. So sitting together with the developers and their teams into solving their problems and transforming a project into a timber project. All this created a lot of knowledge, insight on the market data, and we transferred this data also through a non-disclosure agreement because they are also a non-commercial entity to the Clean Energy Finance Corporation, which is a bank that belongs to the government. And what they did the first thing some months ago, they issued a report called Opportunities for Cutting Embodied Carbon in Australian Construction and Infrastructure. And among the projects that they were mentioning that are leading the way, they mentioned two timber based project and office and student accommodation, which is similar to residential building. So this project and the teams that did them, they are also leading the way, not just in terms of carbon emissions, which is 75, 74% into this case, lower than business as usual. Then the benchmark that they use to calculate this, but also faster and safer, zero accidents in both cases and a significantly faster construction schedule for two tier one builders. So people who are very efficient, also with concrete and steel and the mission of the Clean Energy Finance Corporation is, of course, mobilising capital. So they issued quite recently, a couple of months ago, a timber building program which is resourced with $300 million for debt finance. Beyond this, significantly, can I say significant initiative in terms of the offer to the developers. It is a testimony that engineer wood products are one of the solutions, not the only one, but that provides low risk and good value. It's a bank saying this. So in our presentation today, I will gather data and present to some data and information consistently with two sources from the insurance businesses in the UK specifically and through resources from the timber business, but related to the demands that they have from the insurance businesses. This is from the UK, this is from the US and plus our own experience here in Australia. So in terms of design, what are the risks? First of all, you need to understand that quality cannot be controlled if it hasn't been designed first. And you can appreciate from these images how neat and tidy and clean and therefore productive can be a construction site with timber structures normally. Safety, speed and quality are a bit in contradiction. They create a bottleneck. But when a timber project is planned well, it's demonstrated that it can solve the equation and harmonize the tree in times of risk perceived by the designers. Mostly it's related to fire safety. The code in Australia has two pathways for approval the performance solution, which is the fire engineering approach, which is three inches more flexible, and the defend to satisfy solution, which is like the cookbook recipe. It's creating a little bit of over design, but it creates also a straightforward pathway to approval. So like a cookbook recipe. And then there's five precautions during the construction. We will touch all this in a moment. So everybody knows that timber burns, indeed, but it burns in a very predictable way.
Paolo: [00:10:57] And fire engineers are able to exploit to use this to their advantage, into their design. This photo is very famous and it tells the story much better than many data you can see from the nails. What was the cross section of the timber beam before the fire event? And you can see still there it doesn't lose its shape and strength and stiffness until the section becomes so thin that it will collapse. But meanwhile, a material which doesn't burn changes its shape. Right. So in terms of stability of the whole building, a fire engineer's knows, appreciates and the fire brigades, they understand this very, very well. In a much more modern embodiment of this evidence, there is the evidence of tests. These are from Warrington Fire here in Melbourne. There are many other other laboratories in Australia and around the world which has similar results. This is a two hour test of a column and beam type of design for a big office building. And this is a test demonstrating that there can be self extinguishment even after the fire event has stopped and the fire brigade has gone away. That's a very important requirement as well. So using the defend to satisfy provision on the other end, so using this requirements that there are sprinklers, that every part of structural timber is protected from fire for the duration that is mandated by the code that there is no combustible insulation in cavity cavity barriers and noncombustible facade. The cookbook recipe buildings like this have been built around Australia. This all of these six are five six storey building here in Australia using light frame construction with the DTS. And if you don't want to hide the beauty of the timber, you want to show it like an office building or in the student accommodation. You can use the performance solution or a mix. In this case it is a performance solution because it exposes the structural timber, but it uses also on this side to mitigate a little bit the risk then to satisfy detailing. So there are two key applications that you can access through us or just read the summary that I've put into the slides one from Sweden, one from British Columbia, which are two locations in which there has been a lot historical, a lot of timber construction over a lot of observation of fire incidents in Sweden. They found that modern apartment buildings with wooden frame have a lower rate of fire incidents than the entire stock of apartment buildings. So better than the average. And in British Columbia, they have done experiments and and case studies over real buildings. And they concluded and this brought to a code change that enabled them to build up to 18 storeys with timber, if correctly designed and protected. They claim that they experienced reduced losses and casualties when compared to non timber buildings. Actually, the head of the fire brigade in Vancouver when they did this building, declared publicly that this was the safest building of that class of height in Vancouver in that time in Australia. All our codes are aligned with best design rules. And in terms of fire safety during construction, we have a guide that mentions what you need to do and it's very similar for every material, not just timber. Minimise welding, brazing and heat applied components use cordless low voltage tools. Reduce construction waste on site. That's the main cause of ignition. Adopt a progressive sprinkler protection plan. So go up with the sprinklers as you go up with a facade and then coordination and activation plans with the local fire brigade. So then there are concerns about structural design and durability, which also creates some risk. We also have a very good guide for structural design. I mentioned just a couple of the risks which are more perceived by the structural engineers, the vertical and differential movement. It's a well-known fact the timber shrinks as well, according to moisture variation. Not at all with heat variation. That's the main difference with steel. Steel, most with it. And timber moves not with it, but with moisture variation. But we have in the guide clear explanation on how to design to mitigate that very much similarly durability in balconies. We have a very good guidance on how to design balconies which are safe in terms of durable and durable. So durability is also dealt in our guide number five. And this image again tells the story in Brisbane, a semi tropical climate. This building with timber structure and a stone and measuring skin was built over 100 years ago. This which is is grandchild was built over a few years ago, three or four years ago. And it has a different cladding now. Now glass is the fashion of the moment, but in both cases the message is when a building is loved, it's life and useful for the users. Its lifespan will be longer. The durability is there then. Value engineering is the way that we all address our projects and we have a very good guide, which is called cost engineering of Mid-rise Timber Buildings. We wrote myself and a colleague with Natasha and one of our colleagues, so I encourage you to have a look. And we have a very interesting demo building which is three storey but simulates all the construction details for an eight storey in a cave in Melbourne. Of course, for those of you who are not able to come and visit, it's available online. A nice video, a bunch of photographs and explanation about this building and its details. Now, procurement, procurement is another area where there is a risk, as we said so into the poll already. Right. Again, into the guide 51. There's a good number of indications. And you can see from the photo here what is one of the main advantages of timber for the same allowable load on a truck delivery to site, you can have a lot more square meters, right? So you can take advantage of that and work backwards to mitigate the risk associated with this. In terms of supply chain, you need to understand the supply chain, how it is organized light frames like this to do things like this. It's quite popular in Australia is the bread and butter for class one detached houses and townhouses. But most of the local frame and trust manufacturers are also ready for mid-rise construction. They can offer semi prefabricated or quite a good level of prefabrication for mid-rise construction. They can have offer, shop drawings, design, etc. This is quite typical for the mass timber products like cross laminated timber where we have three Australian manufacturers and a fourth coming and five European suppliers already present in our market. But there is no Australian product standard yet. It's a proprietary product, it's a product which is more into the hands of pre fabricators like Precast, right? They are meant to deliver this type of services, structural design, shop drawings and in some cases transport and installation. So if you understand this, this is valid for both the CLT, the glulam, which also has four Australian manufacturers, more suppliers and importers already active significant importers into the market, a well-established standard performance specification which are well established on the market, and be aware that the Australian grades and codes differ from the European grades. So if you click here into the presentation or you ask me, we have a wonderful and clear web page that explains the differences in detail and then laminated veneer lumber. This is a product where we have one manufacturer in Australia only, but then another one in New Zealand, four or five importers. Although now currently the American market is absorbing everything that they produce. The Russian market is closed for us for good reasons. So but anyway, LVL is a remarkable product which can be combined very well with the others into very efficient designs. Look at this. If it was a stand up. Precast wall. It will be double depth because this panel has a compressive strength of 45 Newtons per square millimeter MPA, so it compares favorably to a precast very favorably. Then in terms of what is quality risk concern, the pre fabricators, they have the typical approach that they check the consultant's detailed design and they produce the shop drawings and they allow for factory inspections. They have an inspection body like this one, which is it is the Engineer Wood Products Association of Australia. Then there are a couple of others that can certify products from the supply chain. If you use the overseas suppliers, then we have a checklist in Guide 51 with guides you through checking all the specifications which need to be consistent with the design. Compare the logistic options because there are different opportunities that you better know and consider before you choose how to de-risk your supply. Your procurement. Take a good care for packaging because this is what protects during transport from swelling, mold, scratches that may occur while materials are travelling on the water compared standards versus specialised containers. Normally in process they use a mix of both. They use specialized containers for bigger panels, bigger beams, etc., which are not many within a project, and they use the standard containers for all the rest. So mixing is a good idea. Also in this case, think about the storage facility and labor to unload, check and sort your materials when they arrive in Australia and take that fumigation may happen in some periods of time in terms of construction. Then again, Guide 51 has good indications, especially in the annex number and Annex A which. Oh, well, sorry for that. So the advantages that I wanted to mention are this significantly lower cruise, which decreases also the risks on the life that less people, less risk. That's really mathematic. Large working platforms with pre-install edge protection, which really help a lot. The feeling, the perception of safety of people working on the life deck. Simple and easy. Anchoring for safety harness everywhere on the life deck. No. Three pads out from cables and real bars. That's a main thing is are handling and fixing with smaller and lighter tools. So less fatigue, less risk for the joints in the shoulders, etc. no hot works or welding on site and scaffolding, which is a source of risk that can be limited or even avoided in some process. You remember the process that I showed you with the six advantages criteria. Remember that? No scaffolding there, right? So it was a ten storey building. And so risk is always a function of probability and consequences. And if you look at some of the typical issues, you look at their probability to happen that would get quite high, almost everywhere, almost all the time. There is some days of rain, but the consequences can be nothing on the opposite. Installing a lower number of connectors. I mean, the probability is very low. It's it's almost impossible to do it. But some people manage to do it. They go to the building site and they're drunk. The consequences potentially are deadly depending on the loads on that joint. So you need to understand that there is always this probability factor consequences way to address the risk. Right. And during construction we mentioned is a main source of concern, of course. And these are two examples of techniques that are employed. One is creating the temporary protection for, in this case, volumetric construction. We really cannot get wet because everything is finished already. The plasterboard is installed already. So we use the final roof elements to be put on and off during the night, during the weekends, and protect the underlying modules or protecting the beams and columns with a plastic wrap. And this is effective against U.V. induced discoloration over a period of weeks. So it doesn't happen in a day, but it happens really in a week. So and this is a list of things that you can do easily on construction site to mitigate the risk of rain happening. And it's a to the guide 51 that I was mentioning this. A whole set of criteria to deal with specification and checking of quality of execution on the construction side. It was written by Norwegian guys and now it's an European standard. It was written by the engineers that designed and built this an 18 story in Norway. And I mean, here they are joking. They are currently a metre away from the ground, but they are proud of what they did. And you have our webinar illustrating the story of this building and some videos that you can access. So also another reason of concern is when rains or leaks from leaking bathroom or kitchen equipment happens during the service life or when flood comes like it happens now more and more frequently, unfortunately. So we have a guide for that that illustrates how to assess remediate. But also we collaborated through our colleagues in in Queensland with the Queensland Government and Queensland homes into their own guide for floor flood resilient buildings in Queensland. So in conclusion, this is the one of the statements from the insurance and lenders that met in London in 2020 within the. My Ultimate Office Forum Insurance panel. It was like 40 people. And also this report, you can get it through through us. So far, 3% of them acknowledge that by 2030, there will be at least 50% of the new buildings done. That would include some mass timber. So it's coming at pragmatic opinion like insurance lenders always have. And in Australia, the CFC, yes, they issued the $300 million fund, which after two months already has 20 over 20 projects under consideration. I just spoke this morning with the guy who runs this fund and it confirmed this. But more interesting, the words from the CEO of the Clean Energy Finance Corporation. He acknowledges that Australian developers and builders do not have to choose between saving money and protecting the environment. Right. And when you use the available technology and best and best options available on the market, including timber, this is a win win for both the environment and the building sector. So am leaving you to this. Thank you for that and I look forward to your questions later on. After you, Natasha.
Natasha: [00:28:53] Thank you very much, Paolo. I'm just going to share my screen quickly. Here we go. Can everybody see my screen? I'll take that as a yes apology, so I can't say it yet.
Danny: [00:29:09] Okay.
Natasha: [00:29:11] Good morning, everybody. My name is Natasha Carter and I'm a director at Rider Levett Bucknall. Wood Solutions and RLB have worked together over the past four years, and we've worked together on a couple of cost exercises and we assisted in developing that cost engineering guide that I referenced before. Really wanted to wish. I wanted to thank Wood Solutions and Paolo for inviting me to speak at today's webinar this morning. I'm going to be presenting timber from a quantity surveyor's perspective and the items we need to consider in the preparation of development of cost checks associated with timber buildings, including any potential risks that may arise during the design and construction of a timber building. As an introduction to my presentation, let me share with you some of the current and past completed projects we've been associated with. I just realized it's got 26. Well, Interstate 36 Wellington Street is currently under construction. It's a proposed commercial development in Collingwood comprises a combined timber and concrete structure. The building has two basements, a ground level, 14 levels of office. The podium is concrete up to level six and from seven up it is a blue lamp post and beam with safety. It's under construction and icon of building it and they're currently excavating the basement if you wanted to drive past. Next one is Murdoch University in Perth. Our Perth office is currently underway in construction. It's a timber post and beam structure with steel flooring and the current. Currently I think they're midway through receiving all of the timber and having it installed. And one last example is 25. King Street's already been completed and it's done by a Brisbane office. They assisted in some of the early cost planning and the fit out. It's a timber post and being construction sits on a concrete structure from basement to level one and timber above that. As a quantity surveyor, we're brought in to estimate forecast construction costs and with timber structures, there are many factors that need to be considered to build up an accurate price of summarising these in the following categories site consideration, construction, environmental, contractual and design in relation to site consideration firmly. Firstly, the site mass must be evaluated as to whether the drainage needs to be mobile or tower. Site access also needs to be considered due to the size of the panels. Any restrictions to access may result in alterations to design and construction methodology and potential more lifts and time on site. A lay down area is required for the installation of prefabricated panels. This laydown area may be on the ground or may potentially be on the level of construction. It needs to remain clear, which may restrict some activities and needs to be kept in mind. The first level is always the slowest. In our research, we found that the speed of installation is around 530 square meters a week or 94 is an average per day over seven levels. We saw installation speeds increase considerably up to about 900 square meters a week. So in summary, the size and the mass of a project will determine its overall program. So considering that as a part of pricing, the project needs to occur, the complexity of design can also impact the overall cost item such as connection details. Integration with facade design. Consistency of design elements can also add additional costs. Timber elements generally are designed to minimum sizes, which results in potentially different sized beams across floors if you are seeing them. So from an aesthetic perspective, final sizes may actually be determined by factors other than just structural required capacity. Some of the considerations in construction of a timber building are things like drainage share factor, so the speed of installation can be reduced if the crown is being shared with other items, i.e. precast and steel. Timber is quick and easy to install, but any shared cranage does add some complications. I mean, our research the total crew required to install timber is less than the standard concrete crew and the flow on impact of that inside accommodation can be reduced. There's a reduction in labour on site also relating to a reduction in temporary power usage and also a reduction in waste is there's little waste associated with timber. As timber is natural and a soft product, it can be damaged during construction, so it needs to be installed carefully, especially those elements that will be exposed once the building is complete. For apartment projects. Oh, sorry. Just chipped a little bit forward. Her apartment projects were sail ties being used for load bearing walls. We need to consider the fact that load bearing elements may sit within apartments. This may impact trades in terms of moving around the site because we do have more load bearing elements and also additional time. Vibration is something that really does need to be considered because it vibrates through timber. So if we're building a timber building over area where there's vibration overall rail, we need to consider vibration elimination strategies. This can be done through isolating the structure. This can also happen with plant over timber buildings and we see solutions such as vibration, isolation mounts and secondary structures to separate the areas. I think Paolo mentioned this in cabinet really well, but weather is also something to be considered as timber is a light product. Wind speeds can impact installation and speed on site considerably. To consider the climate that you're constructing in and also weather and water will make sure that your timber is protected from moisture during construction. The timber does. If the timber does get wet, a simple drying process can occur. But this does add time because they need to ensure that the timber is completely dry before you can start lining everything. And as Paolo also mentioned, too much water in some instances mean that the timber cannot be rectified. Now moving on to contractual and financial considerations. There are many suppliers of sales and global and worldwide and in Australia as well. And when pricing timber, we need to think about where the timber will be coming from is from an international supplier or local. If the timber is to be sourced from an overseas supplier, understanding currency exchange rates and shipping cost trends will ensure more accurate costing. We've seen quite a bit of movement over the last two years in the price of timber as a result of raw timber price increases and increased shipping costs. Shipping costs from Europe have nearly tripled on one project we're involved in and we're still expecting to see more rises. The current indications are that shipping prices might actually be softening from some Asian countries, but we're not seeing a trend as yet. And from what I understand, timber prices in Australia over the last two years have increased between 30 and 40% in terms of their raw price. In some instances when ordering from overseas, there may be a peak season that attracts a higher cost. So do your research to understand the cost impacts of ordering during different periods. This may not be possible to order based on completion dates, but it's still important to consider because there is a variance in pricing. The engineered timber fabricators require early payments from design to commence to commencement onsite, and they also do require multiple deposits during the fabrication of the timber elements. Each supplier has their own deposit schedule, but in some instances we're seeing payments around 40 50% which need to occur before the lamination process, which is and that occurs pretty early on in the construction program. So as a result of the timber deposit requirements. We make sure that we have offsite material payments as a part of contract, which attracts additional layer of security in the forms of insurances, bank guarantees, letter of ownership. And finally, the cash flow generally is not a standard S-curve as a result of these upfront large deposits. And it's important that the cash flow is considered carefully to present a more accurate representation of the expenditure. Timber installation is also not a very common method of construction, and not all contractors and subcontractors are familiar with it. So as a result, it's important to select a contractor that has the proven experience and capability to complete a timber building. Prior to selecting a tender list, an expression of interest could be requested to give contractors the opportunity to show their proven capability with these projects to reduce the risk of selecting the wrong contractor. And lastly, we have some design consideration when pricing construction detail is really important and it's really important to engage with the design team early to understand the aesthetic intent that the team is aiming for and request benchmark projects and understand the detailing that may develop as the design is progressed. Connections can be simple and really complex, and the cost associated may reflect this. There's quite a large range in the pricing of connections. It could be between five and 15% of the timber cost depending on the connection solution. The cost of the timber can also vary based on the grade. The selection of the timber grade would depend on how visible the timber will be, and that's why consultation with the design team is critical to understand this expectation. When first budgeting for timber buildings. It's also important to understand that timber has a higher deflection than concrete, and as such, there are certain facades that can't be pinned to the slab edge. Window walls generally don't require the adequate connection detailing, and in most instances for commercial building you'll see that a curtain mall solution or for residential a lightweight solution. An important element to consider waterproofing details, understanding waterproofing details and drainage. Part of the costing is really important. There are many solutions, such as screens, bituminous membranes, secondary slabs, and possibly even metal deck roofing above a bituminous membrane. The detailing associated with these elements are important to resolve prior to construction, as timber needs to be protected for its life. Junctions between balconies or terraces need to be considered and resolved. Acoustics is also another one from a design perspective that needs to consider. For instance, in a commercial building, the required acoustic separation can't be achieved with CLT alone. What we're seeing is access floors being used to provide the acoustic separation, but that does attract additional cost. Vibration, isolation and detailing. I think that was mentioned before. But I think one thing to mention is the final solution does need to be considered in line with the overall massing and requirements of a building. If a secondary slab is required under the plant rooms or thicker slab, then these need to be included in any elevation heights and considered in planning. One of the interesting aspects of timber is that in a post and beam glulam and sail ties scenario, we find that providing large spans with timbers may attract additional cost. They may either increase a much deeper member size, which means we need to increase increased floor floors, or we may have multiple beams transferring the load to columns. So the cost and the time to install the additional members for the spans is something that we need to consider and understanding. The span early on in the process and benchmarking similar projects and understanding the client's requirements is really critical to understand. Whereas in residential projects where sales is being used as the load bearing wall element, the span required is 6 to 7 meters, which means within an apartment we're introducing a load bearing element and this then needs to be clad under a dam to satisfy solution, and it does have a cost impact that needs to be considered. And similar to the selection of head contractors, it is important to select the design team on the basis of proven experience with timber design. Understanding the coordination of trades and timber design will assist in the preparation of a more robust design documentation, which reduces the opportunity for variations depending on the form of contract. Of course, in the future. And finally, in the event that the fire engineer and solution is elected for a project, it's critical to ensure that the solution, that finding a solution is long and it can be a long and arduous process and may also be rejected. We had one recently that was rejected. It can potentially also add considerable additional cost for project. Unfortunately, in some cases this additional cost is really difficult to predict on the onset during concept phase. So our advice would be to have a fire engineering team on board as early as possible to reduce the cost risks associated with this pathway. And it's also really important to have all of the relevant consultants engaged, engaged as early as possible during this phase. In summary, when understanding and costing the risk associated with timber buildings, it's really important to engage informed, experienced consultants and contractors and trust this assisted in your understanding and thank you very much for your time.
Danny: [00:42:17] Great. Thanks, Natasha. That was very detailed and interesting presentation. Likewise, Paolo. We do have time for questions, so if anyone would like to chat in their questions, please do just use the chat function down the bottom. I have a question for you, Natasha. Could you just maybe summarize for us what do you see as the I guess, the key differences between constructing in timber versus constructing in other materials during the construction phase?
Natasha: [00:42:45] I think one of the main differences is the early procurement of timber and selecting your timber supplier early. That doesn't tend to happen so much with contractors with concrete because you do have many concrete subcontractors and you're not locked into their design also. And deposits also is key in establishing a process to cover the developer from potential losses. So in terms of deposits, making sure that we're getting additional security evidence of payment letter of ownership in the event that in this current climate, a contractor does fall over, unfortunately. But one thing we are adding to some of the requirements we previously asked for is probably evidence of payment. So the payment actually did go to the timber supplier.
Danny: [00:43:34] Okay. Questions just shot through here. Yeah. About facade cladding. Are there increased fire risks when using timber for facade cladding? Is that one for Paolo or.
Paolo: [00:43:50] There are increased risks. Yes. And currently in mid-rise construction, the facade needs to be done with non-combustible materials. So when you have an external wall which is made of timber, like in one of my earlier slides was shown, it's a nice story. Student accommodation in Canberra by the for the university built by Lend lease. In that case what they used is they separated the structural element from the facade element and the facade element is a prefabricated non-combustible panel with Bricks, aluminum and steel and a non-combustible sarkin, which is hanging like a curtain wall over the structure. In that case, that was approved, another case in which it was approved here in Melbourne on a five storey residential building to use a combustible cladding outside within a fire engineering approach and approved also by the building surveyor. It's called the Eternity Building in in North Fitzroy Footscray. In that case we discussed with the fire engineer and the building survey of the use of two non-combustible sarkin membranes which created the enough isolation from a fire point of view, from the combustible cladding that the architect and developer insisted in using. And it looks beautiful indeed. And it adds to the sustainability of the whole project and the rest, which is again, a timber construction. So there are ways around it. But I need to be clear on this. The code currently as a safe approach says Non-Combustible material into the facade, which is correct.
Danny: [00:45:59] Just generally speaking, because I suppose the thing that certainly struck me, perhaps not everyone else, is that it's we're using timber, we're in a country with loads of bushfires. But is is that, is that stereotypical view necessarily accurate? I mean, how is are there necessarily more fire risks using timber versus using concrete, steel glass? Well.
Paolo: [00:46:22] Bushfire areas are a different story from the inner city construction that I was mentioning in bushfire prone areas. There are the build level that you need to consider and there are possibilities to use high density hardwoods also in high fire risk areas. So there is also we have a guide also for that. I don't remember the number now because I'm a specialist in Mid-rise, but we have a guide for that and I can give you the number later on.
Danny: [00:46:57] Okay.
Paolo: [00:46:59] It is possible to use timber in some circumstances and some species. Yes.
Danny: [00:47:04] Okay. We're getting some good questions coming through. This one is about the expense and what it costs. A question here from an attendee, what's the approximate cost saving rate? This might be a hard one to calculate on the spot, but what is the approximate cost saving rate in dollars per metre square compared to concrete steel mid-rise building projects? What is the percentage suggested? Saving? That's quite a true.
Natasha: [00:47:29] Answer that some of the cost exercises we did with Paolo that I mentioned as a part at the start of our presentation, we actually looked at two mid-rise projects, one with prefabricated timber, one with a combination of prefabricated timber and CLT. And in both instances there was a marginal saving, which is a very good outcome because I think what it shows is that timber is comparable, but it is a project by project. Question So when you're talking commercial projects like 36 Wellington Street, the final solution, there would have been a penalty associated with it, but there was a different reason going down timber, there's a sustainability piece associated with it that there's lower carbon in timber. So we had a remit on that project to have a very sustainable product so that offset any of the additional costs. And it also depends on your site. We've had sites overall where it was very difficult to make timber or timber work. So in some cases it's been cost neutral, maybe a marginal saving, in some cases it's more so. Unfortunately, there's one answer that doesn't provide a lot.
Paolo: [00:48:39] Answer that fits all, of course.
Natasha: [00:48:41] Correct.
Paolo: [00:48:42] So Natasha, she's right in saying that in some cases building over rail as. Attracted a higher cost in terms of isolating the foundation. But in another case in in Brisbane, for instance, the ten story Monterrey apartment, which I didn't, I think I have it in one of my slides, in one of the first slides where there was the Australia outline in the middle it was the one on the right. So if you get the slides you will see it. Monterrey Apartments in Brisbane. The reason why they did it in timber is because it was much lighter than in concrete. They needed less piling and less depth of pilings so they were able to build on that land, which is not exactly above but very close to a tunnel and timber was the only solution. So every project is different. In some cases something can be an advantage, in other cases can be a limitation. It depends. And on another note. Construction costs per say may be a bit lower. They may be similar, they may be a bit higher. But for a developer, it's very, very much important what he gets in terms of delivery time. Time is money for a developer and significant money. Right. Another thing that we found out in one of the benchmarking projects that we did together with Natasha was that in the timber version of a very optimised residential building which was built already, so they knew everything because they did build it and they knew it was the ultimate optimization in their construction process. We found out that we were able in that building to have party walls and external walls which were four centimeter thinner. So this four centimeter paywall, over 120 apartments would be one apartment more, right, which is 700, $800,000, just that. So sometimes the advantages are indirect. They are not what we called in the in the. In this. I don't remember. We call this the first. The first reference is mean, not direct event. Sometimes the advantages are not just the construction costs, but things like this related to to the layout, related to time, related to something that you cannot do with other materials and you can do with timber.
Danny: [00:51:30] Generally speaking, I could be generalizing here again, but is does the the more expensive part of the construction process happen in terms of purchasing the timber? Is that more expensive compared to steel, concrete, cheaper materials? And then you say because you're using less cruise and other other stuff like that.
Paolo: [00:51:49] Correct.
Danny: [00:51:51] Okay. So up front you might pay more, but for the duration of the project.
Paolo: [00:51:56] Per square meter we may pay more, but you get something different and you get significant advantages in terms of weight. For instance, in a recent project Build to Rent project, the transverse lab was 900 millimeter with a concrete construction six story above the slab. It became 500 with timber. So okay.
Danny: [00:52:18] Okay, let's, let's move on. We've got nice. Yeah, we got some nice questions coming in in our closing minutes. And I mean, the environmental issue is obviously a big one. And again, it's a little counterintuitive. You would think that chopping down trees to use them in timber constructions isn't environmental. But of course, that's not not how it is if we can perhaps deal with that next. But I've got a question here about the glues in adhesives. Yeah. Are they safe non arsenate or do they leach noxious residue toxins over time?
Paolo: [00:52:52] They don't leach anything and they don't emit any formaldehyde. That's a major requirement. Now, it was introduced like two cent two decades ago. This absence of formaldehyde emission and no leakage, no no VOCs from the glues once they are reticulated into the into the engineered product.
Danny: [00:53:18] Okay. And what about I mean, do environmental groups generally support timber construction versus constructing and steel, plastic, other materials? Is it considered in. It's accepted as environmentally a good thing?
Paolo: [00:53:33] Well, weeks ago I was speaking at the Transform event at the Green Building Council of Australia and yeah, it is very well. Can I say received that we can use more in, but not not in isolation. We need to start considering using timber also in hybrid structures. What it makes sense you cannot do currently at 30 storey building just in timber. Well, it can. Technically you can, but it doesn't make sense economically. So hybrid structures are the way in more demanding, challenging projects.
Danny: [00:54:14] Okay. We've got a responsive audience out there. Someone sent in a question about the adhesives again, and they've said that my understanding is that European CLT has no formaldehyde, but the Australian code is actually specifying formaldehyde glues for glulam. Has that has this changed?
Paolo: [00:54:35] So in Australia there are currently three certified producers which use all of them polyurethane glues. So zero formaldehyde at all. No formaldehyde at all. The fourth one, which is starting production in one year, they will use a melamine urea formaldehyde adhesive. For good reason. One is that is better in fire, for instance. But the formaldehyde gets completely reticulated during the curing of the glue, and there is no emission at all.
Danny: [00:55:10] Okay. Okay. There's a question here about sprinklers. Are there any implications on sprinklers given the combustible construction, i.e., do they also need to consider the construction, not just the occupancy, i.e. light hazard design for office blocks and accommodation buildings.
Paolo: [00:55:32] If I understand it well, I will say currently sprinklers are mandated for every construction material, whether it's timber, steel or concrete doesn't matter in mid-rise. So four storey and up, you need to have sprinklers. And it makes sense because like the two studies that I've shown from Sweden and then British Columbia and many other studies around the world, they demonstrate the risk is the absence of sprinklers because there are combustible materials in a building from the the furniture, for instance. Right. So the use of sprinklers is very, very important for every and detectors is very important, irrespective of the structural material that you are using.
Danny: [00:56:26] Okay. Another question has come in.
Paolo: [00:56:27] Exactly as you know, the the what is called the fire in London, that may reason for the tragic effect of that is that they had no sprinkler. They refurbished the whole building. They had a quote for £700,000, I think, for installing the sprinkler. They decided that the code was not in sprinklers and they skipped it and that killed a large amount of people there.
Danny: [00:56:55] So the code here mandates sprinklers.
Paolo: [00:56:58] For everyone every year. Okay.
Danny: [00:57:01] Another question. Do you have any measurements comparing the carbon usage for the conventional as opposed to timber frame mid-rise buildings such as in assessing carbon neutral goals for the building or the owner?
Natasha: [00:57:16] I can probably answer that. That's actually something that we're working on at the moment. It's a real interest to us because from a sustainability position there's a lot of interest from large developers to address carbon neutrality and carbon offsets. So it's something that's underway in the industry at the moment where most buildings in the government sector are being assessed for carbon neutrality, not carbon neutrality, carbon assessments. And then they put forward their targets as to whether they want it to be carbon neutral or whether they actually want a reduction in target, sorry, in carbon.
Paolo: [00:57:52] And to support that, as Wood solutions, we have freely available environmental product declarations which are based on LCA's or lifecycle assessment of the production and transport process freely available for industry wide. So meaning that they cover the different providers, the different producers of a given product like GLT in Australia when it's not industry wide, like for CLP for instance, we left it to the individual producers to do their own EPD because it's a proprietary product. So we cannot do something for a single producer and then it will be immediately referring to them. So it's a mix. We have industry wide if it is freely available and some companies have their own individual one.
Danny: [00:58:49] Okay. We've just got a couple of minutes left. I'm just going to squeeze in one one more question, if I can. The supply chain issue is such a critical issue in the construction industry, and I know you've talked about it a bit, but I'm just wondering, is it possible, again, to generalize and say procuring timber products can be quicker than getting the other stuff? Or is it is it not as simple as that? Is it harder to source? Easier to source? Is it just really very difficult to put a finger on that? In terms of construction projects now going.
Paolo: [00:59:23] Now, it's difficult with respect to two years ago and then it depends who you are. I mean, if you are a big client, then you will be treated in a certain way. If you are a smaller client or you have something tricky, that that creates more difficulties or stress for the supplier, they will treat you in a different way. But that's not just timber. Right. So what I hear from the builders is that. It's difficult and it depends who you are. For every material.
Danny: [00:59:57] Great. Well, look, thank you both very much. It was very interesting. And thanks everyone out there for all your questions. Nice to get some good questions coming in. And that always helps.
Paolo: [01:00:04] Thanks to all the attendees.
Danny: [01:00:07] Yeah, thank you. And if you'd like to watch this again, this will be recorded and on our website and everyone who's attended will also get a copy of this this video. But that's all we have time for. So I'm going to thank Natasha Carter. She's director of Rider Levett Bucknall and Paolo Lavisci. He's program development manager at Woods Solutions. And on behalf of insurance business, thanks for watching. Bye for now.
Natasha: [01:00:31] Thank you very much.
Danny: [01:00:33] Okay. See you guys.