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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.

Patrick 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. 

Japanese backing

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.”

AXA IM Alts has received planning consent and launched the construction of a timber hybrid office building in the centre of Munich.

Called ‘The Stack’, the 16,000 sq m project is expected to complete by the end of 2025 and is being developed in partnership with German developer Accumulata. 

AXA said the project combined a sustainably sourced timber hybrid construction method with green energy technology and biophilic design features, which will reduce energy demand considerably compared with a typical new-build development. 

Additional smart building technology will regulate indoor air quality and enable efficient local climate and lighting control.

Germain Aunidas, global head of development at AXA IM Alts, said: “The Stack will pair market-leading sustainability credentials with a technology-led focus on workplace wellbeing, delivering new, high-quality office space that meets the evolving requirements of top-tier occupiers and aligns to our global investment convictions.”

Jean-Michel Wilmotte, founder of Wilmotte & Associés Architectes, the project’s designer, said: “Recent advances in timber hybrid construction techniques present exciting opportunities to deliver new sustainable space at scale.”

Real estate developers in Australia are beginning to use mass timber – engineered wood construction materials – to accelerate building times and reduce emissions. Mass timber offers superior weight-to-strength performance compared to steel or concrete and suits offsite prefabrication. 

The adoption of mass timber has been accelerated by recent changes to Australia’s national construction code, which streamlined approvals for structures up to eight stories. Last year, the Australian government introduced the A$300 million ($204 million) Timber Building Program to promote the use of mass timber construction in the office sector.

Projects include Hines’ T3 Collingwood (pictured above) in Melbourne, its first timber building in Australia. The new development uses Hines’ proprietary T3 development blueprint, which prioritises the use of timber, access to public transit and active use of technologies.

Hines predicts the new building will have 40% less embodied carbon from construction compared with a typical building of the same size. It is targeting net zero carbon from operations. 

Meanwhile in Perth, Western Australia, Grange Development is building C6, a 183-metre residential tower, using mass timber. It will also feature solar PV, rainwater harvesting and green walls and is intended to be carbon negative in operation. 

One of the first commercial real estate developments to use timber construction and still the largest timber building in Australia, is 25 King Street, Brisbane, developed by Lendlease and owned by Impact Investment Group. Construction of the 10 storey building involved a 74% saving in embodied carbon.