Keynote interview: Bywater's timber transformation
Bywater Properties' sustainability journey has taken a dramatic turn in recent years, says chief executive Patrick O’Gorman. An investigation into the use of mass timber in its UK developments led to a £1 billion joint venture with Sumitomo Forestry and, this year, the Japanese company taking an ownership stake.
“Sumitomo Forestry is an enormous company in terms of history, culture and financial firepower, which will enable us to fulfil our ambitions of innovating and leading the built environment with a focus on reducing carbon, across the UK,” says O’Gorman.
Bywater was founded by Richard Walker, executive chairman of British supermarket chain Iceland, and ex-JLL consultant Theo Michell in 2007. Early developments were in Poland but after O’Gorman joined in 2013 (he is a former CEE capital markets head at CBRE), the company refocused on UK projects with a strong sustainable element. Chairman Walker is one of the most outspoken voices on sustainability in British business.
The company’s flagship project and its first using mass timber is Paradise, a 63,250 sq ft office development in Lambeth, South London, which will feature a cross laminated timber structure and will be zero carbon in operations.
“We wanted to do something very special and make a big impact in the project and thought that using timber would have an enormous impact on reducing the embodied carbon,” O’Gorman says. However, in 2018, thinking about embodied carbon and timber was ahead of the curve in UK real estate, with most firms focusing on operational emissions.
Sumitomo was originally targeted as a funding partner for Paradise but its commitment and enthusiasm for sustainability and using timber sustainably accelerated the relationship. O’Gorman says: “We knew they were committed when, in 2021, they sent a team to visit us for three days, committing themselves to 14 days in isolation as a result!”
With Sumitomo’s financial backing and 51% stake in the company, Bywater’s future looks bright, however O’Gorman points out that timber construction in the UK, where it is relatively rare, is not straightforward. “We are learning with every project because it is it is complicated and there are risks. We need to be in line with the requirements of planning authorities, the fire service and other bodies.”
Following the Grenfell residential tower fire in London in 2017, where 72 people died, there has been a considerable focus on the use of combustible materials in building, he adds. This affects Bywater, even though timber was not at fault in the Grenfell tragedy.
Using timber for construction sometimes involves slightly higher costs, O’Gorman says. Paradise was originally estimated at a 3% premium over a more conventional build. It is not necessarily the cost of materials, but other factors. For example, a timber designed building is more likely to require larger sprinklers, which increase cost and reduce space. Meanwhile, the fire test for Paradise added “several hundred thousand pounds” in design costs.
Bywater plans to have three timber projects underway by the end of this year, two of which will be office refurbishments with two storey timber extensions, and another three next year. The firm’s primary focus will be on reusing existing buildings, but O’Gorman is concerned that planning authorities might take a too restrictive approach to new developments.
“Innovation is very important part of what we need at the moment and, without new builds, we fear we won’t be pushing innovation enough. Developing low carbon concrete, recycling steel and using timber requires further innovation and there is more scope for that in new developments.”
Paradise does not use quite as much timber as Bywater had hoped, due to fire safety requirements forcing a concrete core, however "other than that most of the remaining structure will be mass timber," says O’Gorman.
Benefits of wood
Research from Sumitomo and others worldwide is finding that working in a wooden building lowers stress and aids concentration. Sustainability and health benefits of the project feature heavily in its marketing, reflecting what London office occupiers are looking for. O’Gorman says the response from prospective tenants has been positive so far, not least because sustainability is rapidly become a must for London office occupiers.
“When we started the process, we were advised that the potential occupiers would not be interested in embodied or operational carbon stats, or energy use intensity stats, but that is far from the case. When we are presenting to tenants, we find they really understand the metrics, they know what's good and what's bad.”
The company is focused on workspace at the moment, but has begun investigating the “living” sectors, multifamily, student housing and single family homes. Sumitomo built 25,000 single family timber homes last year, so its expertise could be invaluable.
“We are short of homes in the UK, especially affordable homes and it is one of our biggest social issues,” says O’Gorman. “We hope that using timber and modern methods of construction, we can do something to help.”