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Business Case Studies

B. Public and private asset owners can identify the optimum cost and carbon approach to projects by commissioning assessments of different degrees of retaining and transforming existing assets.

Strategic: Public and private asset owners can improve projects’ costs and carbon profiles by commissioning early-stage assessments of different degrees of retention and transformation to meet future needs. This is rather than just comparing default demolition or a façade retention-only approach against minimal refurbishment of existing buildings.

Financial: In the demonstrator projects on which this case is based, life cycle costing found the total costs of optimal approaches to existing buildings result in savings of 7% and 26-41% compared to default new build or façade retention only. The savings range from €1m to €5.5m, indicating a strong case for investment in assessments.

Feasibility: Skills exist to implement assessments of various approaches to building retention. The benefits should be considered at the start of projects and consultants appointed on the basis of proven abilities and their willingness to interrogate the best use of existing assets.

Risk: Regulations might change during a development project. Setting out early on with evidence of the optimal approach to existing assets minimises the risk of developing a BAU approach and creating abortive work that’s non-compliant under new regulations.

Scalability: This approach would not work on sites where city planning allows significantly taller new buildings than can be achieved through retention and extension of existing buildings. Nevertheless, the demonstrator cases are widely applicable across many other sites and building types. While the Korso School project showed significant economic advantage in carrying out various levels of refurbishment, North Row was more marginal. In marginal projects, making the economic case for building retention may require new financial incentives such as (in a UK context) charging VAT equally on new build and refurbishment.

Related demonstrators: Demonstrator 19 – Korso School, Demonstrator 24 – North Row

D. Public and private asset owners can activate a neighbourhood and support new businesses by retaining existing assets for temporary use during long-term, phased regeneration projects.

Strategic: Public and private asset owners can activate a neighbourhood and support new businesses and job creation by assessing masterplans to identify existing assets to retain for temporary use during long-term, phased regeneration projects.

Financial: In the demonstrator project on which this case is based, construction costs for adapting and upgrading an existing building were 6% less than providing an equivalent new building. The projected return on investment over a fifteen-year temporary use period was enhanced by 8% compared to the new build alternative. Compared to a scenario in which the existing building is demolished, not replaced, and the land is rented out, the building retention option creates significantly higher net revenue, more jobs and a greater net total Gross Value Added.

Feasibility: Building retention to support temporary use is a familiar concept and skills exist to achieve it. The challenge is to recognise opportunities early on, assess their merit in terms of placemaking and social as well as economic value, and place sufficient weight on these benefits when briefing for design and phasing. Triple bottom line assessments should inform the approaches taken towards existing buildings.

Risk: Temporary uses can be seen as a risk for landowners in terms of safety and logistical reasons or delays in getting vacant possession when the site is due to be developed. A building or site will not always be suitable for temporary uses – for example if access blocks construction vehicles – but this can be considered in the early planning stages. Vacant possession can be ensured by establishing lease arrangements and maintaining clarity about the temporary use period.

Scalability: Large-scale redevelopment of industrial areas, such as the project that provided this demonstrator, are common in expanding urban areas where there is high demand for housing. With long redevelopment timeframes, there is good scope to treat existing buildings as assets that can provide income and social benefits through temporary use.

Related demonstrators: Demonstrator 23 – Block F

N. Private asset owners, investors and developers can gain recognition and achieve market differentiation by assessing whole life carbon when deciding between retrofit and demolition.

Strategic: Private asset owners, investors and developers should include results of whole life carbon assessments in strategic decision-making over retention and retrofit versus demolition and new build. This will help them meet changing legislation and public perception.

Financial: In the demonstrator projects on which this case is based, life cycle costing over a 50-year period found the total costs of retrofit scenarios to be 37%, 36%, 25% and 4% lower than new build.

Feasibility: There is growing capacity among consultants including access to software to enable whole life carbon assessments. In the demonstrator projects, the whole life carbon of retrofit scenarios was found to be 23%, 19% and 6% lower than those of new build. Giving the results of assessments sufficient weight in strategic decision-making, beyond meeting statutory minimum requirements, will be a matter of developers’ setting their own policies and targets.

Risk: Gaining recognition for transforming underused buildings and exploiting opportunities for creating new housing in existing assets minimises businesses’ exposure to the risk of demolition becoming an unacceptable approach in many contexts. Developing the capacity to work efficiently with existing assets builds businesses’ resilience to shifts in policy and taxation that incentivise retrofit over demolition and limit whole life carbon.

Scalability: There are few barriers to introducing whole life carbon assessments and taking them into account when deciding between demolition and new build. The demonstrator projects indicate economic and environmental benefits as well as reputational benefits in doing so. The ability to scale retrofit as a solution requires greater familiarity working with existing buildings across the construction value chain and innovation in surveying methods to de-risk and generate better information about existing buildings.

Related demonstrators: Demonstrator 13 – Godewind Park, Demonstrator 18 – 1930s commercial plot, Demonstrator 21 – Vantaa office building

Y. Citizens can form cooperatives and create new affordable homes and workspaces by identifying and transforming underused assets.

Strategic: Citizens can form cooperatives to work with municipalities to identify underused assets that are otherwise a blight on the urban landscape and at risk of demolition, and transform them into productive buildings.

Financial: In the demonstrator project on which this case is based, transformation of an underused multi-storey car park into housing resulted in a saving in demolition costs of around 15%. It also led to a total construction cost reduction of around 5%, compared to demolition and new build.

Feasibility: A key step for citizen-led cooperatives is to form relationships with city planners and collaborate in identifying underused assets suitable for transformation. The demonstrator project found that there is increasing appetite among cooperatives to invest in alternative residential-led mixed use developments.

Risk: Early investigation of existing structures is critical to ensure any hazardous materials or historic contamination can be remedied and the associated costs and risks are understood.

Scalability: The demonstrator focused on a multi-storey car park. Many cities are aiming to reduce car use and keep cars out of inner-city areas. This means reuse and transformation of car parks is one opportunity to scale creation of valuable living, social and commercial spaces in inner cities. In Hamburg, nearly 10,000 parking spaces in multi-storey car parks are expected to be suitable for transformation in the next twenty years. Municipalities can support cooperatives by systematically identifying these and other assets at risk of demolition to maximise the likelihood of their transformation and the social, environmental and economic benefits shown in this demonstrator.

Related demonstrator: Demonstrator 15 – Gröninger Hof Parkhaus

A. Public and private asset owners can assess cost and carbon saving opportunities from reuse across projects and asset portfolio by commissioning and acting on pre‑demolition audits.

Strategic: Public and private asset owners can identify opportunities to make cost and carbon savings through reuse of materials across projects and assets in their portfolio. They can achieve this by commissioning PDAs in the early design stages of major redevelopment and building upgrades.

Financial: The cost of commissioning a PDA is small in the context of construction costs. One demonstrator found a 12% saving in construction costs through on-site use of recycled aggregates. A demonstrator comparing deconstruction and component resale to demolition and scrap value of a structural steel frame found that the cost premium involved in deconstruction is £50/tonne and additional resale value is £80/tonne. However, if it is assumed that 20% of the deconstructed steel is lost to cutting, the deconstruction option becomes 8% more expensive than BAU. A demonstrator reusing timber trusses on site also reported increased costs, largely due to additional handling, processing and fitting costs compared to BAU. A demonstrator comparing reclamation of bricks laid in cement mortar using hand-held power tools and an excavator found that using hand-held tools produced reusable bricks at a higher cost than other reclaimed bricks on the market. However, using an excavator produced reusable bricks that were cheaper than other reclaimed bricks (by 48%) and cheaper than virgin bricks (by 24%).

Feasibility: There is increasing familiarity with PDAs in industry and capacity for carrying them out in early design stages, in line with CIRCuIT recommendations. However, many secondary material supply chains remain in their infancy and do not have the economies of scale enjoyed by conventional supply chains.

Risk: CIRCuIT policy recommendations include making PDAs mandatory for all projects or all government projects. Building this into procedures now, demonstrates leadership from local authorities and enables forward-thinking developers to stay ahead of legislation.

Scalability: The potential impact of PDAs increases as more are carried out. With more reusable materials identified and made available through digital platforms, data collection will reach a tipping point where it becomes a fertile place for specifiers and procurers to source materials they need. That scale will reduce the costs of deconstruction, processing and testing. Across a portfolio, there may be timely opportunities to direct components from one project to another. Local authorities can also offer materials at low cost to projects that achieve other goals such as social value. In the medium term, aggregated findings from PDAs provide data that can be used to support future policymaking. Innovative surveying methods could improve the quality of information generated and/or reduce the cost of PDAs.

Related demonstrators: Demonstrator 2 – Offakamp, Demonstrator 4 – Gladsaxe School / The Swan, Demonstrator 6 – Hyltebjerg skole, Demonstrator 7 – Hevoshaka school, Demonstrator 8 – Vantaankoski school, Demonstrator 10 – Component reuse of retail unit, Demonstrator 11 – Leadenhall

G. Local authorities can help to create circular supply chains by driving demand for novel remanufactured secondary materials and adopting their use in public projects.

Strategic: Local authorities can reduce embodied carbon emissions in line with their own carbon reduction objectives by taking a leading role in briefing design teams to specify secondary materials. This will also help break down barriers to wider adoption of novel materials.

Financial: New remanufacturing initiatives may not be able to deliver like-for-like materials cost neutrally when compared to existing manufacturers that operate with significant economies of scale. In the demonstrator project on which this case is based, the time involved in deconstructing timber framing was estimated in general to add 15% to the demolition contractors’ costs. This would lead to more expensive feedstock for glulam production than using primary timber as usual. However, there is a holistic economic benefit to the area if more construction spend is retained in the local economy. This spend also helps new businesses expand and reduces their costs, increasing the competitiveness of circular supply chains in the longer term.

Feasibility: Adopting novel materials requires strong impetus from those commissioning construction to set a ‘direction of travel’. Officers in development and regeneration roles will need to understand the reasons for the policy and act as custodians as it is enacted in briefs and challenged through the course of a project’s development. Appointed design teams will be asked to specify materials in a way that differs from their normal practice. Likewise, contractors will be asked to build with materials that may vary from those they are familiar with. Clarity of rationale and awareness of carbon and circularity will be key to resisting pressure to revert to BAU.

Risk: Association with innovative, circular businesses can enhance the reputation of a local authority among staff, residents and industry. The opportunity cost of achieving carbon savings or other environmental benefits should be weighed against other options for achieving the same benefits. The starting point is to understand the scale of benefits. In the demonstrator case, using secondary timber in glulam manufacture was found to achieve a 40% reduction in embodied carbon (cradle-to-gate), and almost a 200% increase in the biogenic carbon stored in wood (grave-to-cradle-to-gate).

Scalability: The ability to scale this business case depends on availability of novel secondary materials ready to be supplied to major projects. The emergence of these supply chains can be supported by developing physical and digital infrastructure that creates a more effective market for secondary materials. It should also make available materials more visible and reachable by remanufacturing businesses. Organisational infrastructure will develop workforce skills and capacities for deconstruction, testing and recertification and form links in supply chains. Greater demand for secondary materials from across the market, driven by progressive purchasing, tighter regulation of whole life carbon or carbon pricing will create more opportunities for new circular businesses.

Related demonstrators: Demonstrator 12 – Glulam from secondary timber

P. Local authorities can help to create supply chains for secondary materials by establishing circular economy construction hubs closer to city centres.

Strategic: Local authorities can reduce embodied carbon emissions of their own buildings, and other developments under their jurisdiction, by allocating sites for circular economy construction hubs and facilitating partnerships to establish and manage them.

Financial: Circular economy construction hubs improve the likelihood of retaining value from materials in the local economy. This can reduce the length of supply chains, minimising exporting waste and importing materials, and increasing local employment. Reuse opportunities are sometimes missed due to lack of available space to store materials or inflated costs because materials need to be taken to remote storage.

Investigating potentially reusable materials was found to be a time-consuming exercise that requires significant effort from the design team. In one demonstrator this accounted for around 10% of the total cost involved with reusing glulam beams (although total costs were 12% less than new glulam). As the reuse process becomes more visible in cities through hubs, and more familiar to teams, the transaction costs involved with new ways of sourcing materials will come down.

Feasibility: Leveraging existing skills, capacity and experience through partnerships with organisations already involved in managing related sites will be key to establishing them. This could include demolition contractors, reclamation yards, builders’ merchants, construction consolidation logistics centres, developers, universities and colleges and production facilities.

Risk: Temporarily using disused brownfield sites earmarked for long-term redevelopment may provide opportunities to road-test circular economy construction hubs. This can activate sites that are otherwise providing no social value and detracting from the urban environment.

Scalability: This case can be seen as a step in evolving urban waste management infrastructure to circular economy infrastructure. Policy targets for net waste self-sufficiency (e.g. the London Plan policy of the equivalent of 100% of London’s waste being managed within the city by 2026) should be established to support development of such sites. In the demonstrator projects on which this case is based, local recirculation of materials achieved carbon emissions reductions of 2-6%, 8%, 40% and 47%.

Related demonstrators: Demonstrator 1 – Luruper Hauptstraße, Demonstrator 3 – Musterbude, Demonstrator 5 – Stablen / The Stack, Demonstrator 12 – Glulam from secondary timber.

U. Demolition contractors can achieve new revenue streams by becoming retailers of recovered materials.

Strategic: Demolition contractors can rebrand as urban mining specialists and open up new revenue streams by recovering more materials and finding markets for their reuse, remanufacturing or high-quality recycling.

Financial: Demolition contractors already seek to minimise disposal costs by identifying materials that can be sold by reclamation yards. But this is usually limited to high-value goods for heritage projects. There is growing demand for other secondary materials, such as structural steel. In one demonstrator project on which this case is based, the time involved in deconstructing a steel frame was estimated to add £50/tonne – but additional resale value is currently around £80/tonne. If it’s assumed that 20% of the deconstructed steel is lost to cutting, the deconstruction option becomes 8% more expensive than typical demolition and scrappage. For brick laid in cement mortar, a demonstrator found that costs were heavily dependent on the deconstruction method. Using an excavator, despite breaking more bricks, produced reusable bricks at a cost 48% lower than other reclaimed bricks on the market, and 24% lower than virgin bricks.

Feasibility: Improving skills and technology will simplify deconstruction and reduce time and cost. Greater familiarity with markets for secondary materials will simplify identification of materials that can be resold and reduce transaction costs.

Risk: Shifting from demolition to deconstruction and urban mining minimises businesses’ exposure to the risk of demolition becoming an unacceptable approach in many contexts. Supplying materials directly to other construction projects may require the development of testing procedures and warrantying. Demolition contractors could integrate these operations or supply to specialists who prepare products for resale.

Scalability: Greater demand for secondary materials from across the market, driven by progressive purchasing and tighter regulation of whole life carbon or carbon pricing, will increase margins between deconstruction costs and resale prices. This will allow more material types to be profitably recovered.

Related demonstrators: Demonstrator 5 – Stablen / The Stack, Demonstrator 8 – Vantaankoski school, Demonstrator 9 – Tikkurila School Warehouse, Demonstrator 10 – Component reuse of retail unit.

I. Local authorities can help to create circular supply chains by driving demand for novel DfD construction by adopting its use in public projects

Strategic: If local authorities take a leading role in briefing design teams to specify DfD, they can reduce embodied carbon emissions in line with their own carbon reduction objectives and help to break down barriers to the wider adoption of novel circular construction.

Financial: Compared to BAU, upfront costs were found to be 25% lower for Demonstrator 25 and 1% higher for Demonstrator 26. Lifecycle cost savings of 37% Demonstrator 25 and 61% Demonstrator 26 were achieved once the components were used for a second time.

Feasibility: Adopting novel construction techniques requires strong impetus from those commissioning construction to set a direction of travel. Officers in development and regeneration roles will need to understand the reasons for the policy and act as custodians as the policy is enacted in project briefs and challenged through the course of a project’s development.

Appointed design teams will be asked to design and specify product systems in a way that differs somewhat from their normal practice. Clarity of rationale and awareness of carbon and circularity will be key to resisting pressure to revert to BAU.

Risk: Association with innovative, circular businesses can enhance the reputation of a local authority amongst staff, residents and industry. The opportunity cost of achieving carbon savings or other environmental benefits should be weighed against other options for achieving the same benefits. The starting point is to understand the scale of benefits. In the demonstrator cases, DfD was found to achieve 75% and 85% reductions in embodied carbon emissions once components were used for a second time.

Scalability: The emergence of building futures contracts and a market mechanism for their exchange will lend credence to the long-term residual value of DfD construction, and justify additional upfront investment.

Nevertheless, the ability to scale this business case depends on the availability of DfD products that are ready to apply to major projects. Greater demand for DfD from across the market, driven by progressive purchasing and tighter regulation of whole life carbon, will create more opportunities for businesses to develop such products.

Related demonstrators: Demonstrator 25 – Hamburger Klassenhäuser – Slab construction, Demonstrator 26 – Hamburger Klassenhäuser – Façade comparison.

W. Manufacturers can generate new revenue streams by developing demountable product-as-a-service business models

Strategic: Manufacturers can retain ownership of assets and generate revenue from leasing building products and systems, including partition systems, façade components, warehouse buildings and raised access flooring.

Financial: In the demonstrator projects on which this case is based, upfront costs were found to be higher where systems were designed for future disassembly (by 11–25%). However, lifecycle cost savings were achieved once the components were used for a second time (13–25% saving), and with each additional use cycle this return on investment improved further.

Whilst future returns are inherently uncertain, the Neustadt case showed real savings achieved for the recipient project through the reuse of 200m2 of a partition wall system in collaboration with the original manufacturer. These savings represent a competitive advantage for a manufacturer that is able to disassemble, reassemble and re-warranty their products.

Feasibility: Disassembly and reassembly techniques exist but leasing models remain largely unfamiliar to developers, specifiers and contractors. A shift in mindset is required for these models to become commonplace. Pricing and ownership models need to be considered to suit different component types and market segments.

Risk: There is financial risk in increasing manufacturers’ upfront costs with returns coming over a long period. There is organisational risk for existing manufacturers in developing and integrating new business models where traditional upfront sales models are felt to be effective. However, retaining ownership of materials is a hedge against future resource price rises and price volatility.

Scalability: Leasing models are most applicable to shorter lived building components, temporary buildings and typologies that could be expected to be deployed on different sites before the end of the components’ lifespans. If they become commonplace, it will raise questions over universality/compatibility versus manufacturer-specific technology (e.g. connection types) and subsequently collaboration versus competition amongst manufacturers.

Alignment over technology (e.g. connection types) and robust information retention (e.g. through material passports) will help to ensure that components are disassembled and reused as intended, even if their original manufacturer ceases trading.

Related demonstrators: Demonstrator 27 – Neustadt – Partition walls, Demonstrator 29 – DfD modular façade – Taastrupgård, Demonstrator 32 – DfD warehouse, Demonstrator 36 – Green Street affordable workspace.

E. Public and private developers can create more valuable homes, improve resident satisfaction and reduce lifecycle cost by developing adaptable housing

Strategic: Public and private developers can create more valuable homes, improve resident satisfaction, reduce lifecycle cost and simplify maintenance and upgrades by developing adaptable housing that facilitates multigenerational living and flexibility of living and working.

Financial: In the demonstrator projects on which this case is based, upfront costs were found to be higher where systems were designed for adaptability (by 21–24%). Savings are achieved when dwellings are transformed to suit changing needs, especially where the alternative is demolition and new construction.

In one case, the redevelopment of an adaptable home compared to demolishing and rebuilding after one use cycle resulted in a 28% lifecycle cost saving. Economic benefits for the building owner may also be generated by shortened periods of vacant flats, due to the capability to adapt flats to meet changing demands.

Feasibility: Adaptability can be achieved through simple design changes such as optimising positions of load-bearing elements and building services layouts and accessibility. The demonstrators apply construction methods and technologies that are readily available.

Risk: The resident survey conducted in Helsinki found that there is demand for flat adaptability amongst both owner-occupiers and tenants, as it reduces the likelihood of having to move house, allows changing use of space as family life and work life change, and makes it possible to rent or sell a part of the flat to yield income.

There is a willingness to pay a premium for adaptability, generally 2–10% on top of the purchase price, if its potential benefits are clearly communicated. For building owners, investment in adaptability reduces the risk of buildings being demolished before the end of their technical lifespan.

Scalability: In owner-occupied housing, the investor and the beneficiaries are different. The potential savings must be communicated and recognised as additional value at the point of sale, otherwise the split incentives will reduce motivation to invest in adaptability. For public developers and housing associations that retain ownership of buildings, adopting lifecycle costing is essential to assess the merit of designing for adaptability.

Related demonstrators: Demonstrator 28 – Copenhagen adaptable housing, Demonstrator 33 – Helsinki adaptable flats, Demonstrator 35 – RightSizer

F. Public and private landowners and asset owners can achieve increased rental income by facilitating ‘meanwhile use’ of underused land and assets

Strategic: The term ‘meanwhile use’ represents a range of strategies that can be put into place to make under-utilised spaces and places become productive, both in an economic and social sense.

Landowners can achieve increased rental income by identifying opportunities for ‘meanwhile use’ and maximising use of land and assets prior to longer term redevelopment.

Financial: Land and assets earmarked for redevelopment are often protected with hoarding and security services in the period before construction starts. These periods of under-utilisation of assets are often significantly longer than is first anticipated, potentially leading to years of outgoings.

Meanwhile use’ achieves rental income and avoids the need to pay for securing disused sites, but it requires investment in a temporary building (by the landowner or others) that may need to be deployed multiple times to achieve a return. The demonstrator on which this case is based was a disused brownfield site. Upfront construction costs of a relocatable building to suit a 10-year lease period on the site were found to be 6% higher than an equivalent building not designed to be relocatable. However, lifecycle costs for three 10-year uses of the building were 23% lower.

Feasibility: Information about a site’s previous use allows assessment of the capacity of any existing foundations. In the demonstrator case, the ‘meanwhile building’ was designed to be lighter than the previous building so that no new foundations were required. The demonstrator used standard construction materials and techniques, with some modifications to improve design life and demountability.

Construction supply chains are not fully prepared to scale these techniques to maximise their potential impact, but the supply capacity and skills required are within reach. Deconstruction and relocation expertise exists, but it will also need to be scaled to meet the needs of a larger market in relocatable buildings.

Risk: Maximising return on investment will require ‘meanwhile buildings’ to be deployed multiple times. Under current regulations, a building will be defined as new at the point that it is relocated to another site. It will require full planning permission and will need to meet the relevant building regulations of the day. This may add complexity and cost to future relocation.

Scalability: All buildings become non-compliant over time, but existing buildings that remain on the same site do not need to be recertified every 10 years. This raises the question – Should relocatable buildings become a new special category and regulations relaxed to simplify their widespread adoption?

Taking London as an example, there are 466 disused plots of land of a size that would be suitable for ‘meanwhile use’ similar to that adopted by Demonstrator 34. The total area of this land is nearly 500,000m2. In the UK as a whole, there are 36,000 disused brownfield sites. This represents a significant opportunity to roll out ‘meanwhile use’ prior to redevelopment.

Related demonstrators: Demonstrator 34 – Albion Street / The Hithe