WTP managing director Nick Deeks

25 March 2014 — Increasing demand for sustainability credentials is pushing up prices, but according to WTP managing director Nick Deeks, there’s long term gain as well.

WT Partnership’s Review of Construction Market Conditions released this month flags an increase in price of specialist consulting and subcontracting services related to sustainability in commercial buildings.

However, when sustainability is embedded in a project from the early design stages rather than considered as an add-on, the price comparisons over an asset lifecycle become equalised between the engineering services required for a sustainable build and those required for one where energy and water efficiency are not prioritised, Mr Deeks told The Fifth Estate this week.

“If you add on sustainability afterwards, you pay more afterwards,” he said.

“What we suggest to clients is they embed sustainability early on and make it a part of business as usual, then the cost is not as great.”

This is particularly crucial for commercial developers and building owners, as increasing numbers of tenants look to provide a better, healthier environment for staff with good natural light and air quality, including minimised volatile organic compounds.

The aim is a better working environment

“Staffing groups want increased quality [in their working environment]. At a minimum it is not about Green Star certification [for commercial tenants], it is about providing the best environment for staff,” Mr Deeks said.

It’s demand and supply

The reason this is translating into cost pressures for the engineering services trades and consultants is simple supply-side economics – increased demand for the sustainability services is driving increased numbers of orders, which is encouraging the sector to review its pricing.

The sector, including the trades, has the capacity to meet increased demand,  which Mr Deeks said should be “everywhere and embodied in every building”.

But don’t blame the carbon tax

One of the big ticket items politically in terms of sustainability has been the issue of the carbon tax. WTP’s experience contradicts the oft-cited notion it adds substantially to costs.

“There has been a lot of government hype about carbon [tax] costs, but we are not seeing [that cost] in retail, residential or commercial projects,” Mr Deeks said.

WTP cost planning analyses demonstrate that recurrent costs including maintenance, replacement costs and energy costs all reveal that sustainability is not generally an added cost to projects.

“I always make a point of demonstrating to clients how much they save over [the building] lifecycle,” Mr Deeks said.

“Sustainability is becoming more a part of everyday life now, because [commercial] owners in order to sell the building have to provide a building with energy saving [features].”

Residential still has a way to go

This, however, does not hold true across the residential sector, where Mr Deeks said that “purchasers don’t see the value”.

“It is harder to get sustainability into residential as developers see it as an add-on. [But] five to six years ago commercial was a very hard sell,” he said.

Retail has advantages to going green

For retail centres the drivers were around the competition with online retailers.

“Major retail centres are looking at sustainability,” Mr Deeks said. “There are centres installing [technology such as] trigeneration to lower their operating costs. There is also a new way of looking at providing a commercial retail experience – the whole experiential [approach] retail is looking at now.

“[Retail centres] have to change how people shop and experience [shopping] with nicer environments and better environments. [Retail centres] need to be something which attracts people given they have the alternative option of shopping online from their lounge room.”

One of the key considerations in embedding sustainability in building systems is commissioning.

“As long as the design is done, the [important step] is making sure the system that’s been installed is eminently commissionable and able to operate at its optimum,” Mr Deeks said.

“Commissioning is traditionally left to the very end, and then the builder hands over the as-built and it is left to the facilities management staff to get the most out of it.

“Smart contractors are installing systems to be [eminently] commissionable… they either offer the commissioning service or they pull someone in to ensure commissioning and ensure optimum performance.”

Mr Deeks said there is more awareness on the part of building owners and managers of the importance of commissioning, and growing appreciation of the importance of building tuning and regular monitoring of systems and energy use. This is also an aspect that is factored in for whole-of-life asset cost planning.

“If you don’t get the costing right to start with, if you don’t get the numbers right, or look for cost value engineering to achieve savings [on the budget] the decision is often to take out the sustainability. This [however] is not cost-effective in terms of the lifecycle and whole of life costs, which should be done in parallel with the whole [construction] costs estimate.”

WT Partnership has in the last few years added sustainability advice, green advocacy, energy monitoring, civil infrastructure, cost engineering services, independent commissioning agent services and facilities management to the company’s core service offerings of cost planning and quantity surveying.

The sustainability consulting strand was first conceived in late 2011 and launched in 2012 with a number of projects in hand.

“It took a while to get [the service offering] across to market, as we are targeting a definite market by offering a pragmatic, cost-driven energy efficiency service, and also trying to prevent greenwash,” Mr Deeks said.

The Sydney office for the new division provided an opportunity to walk the talk, with WTP becoming involved in the fitout early in the design stage. The result is an office fitout rated as Australia’s most energy efficient office, and a six star NABERS rating achieved without capital spend.

As was the case with the company’s offices, the key to sustainable outcomes within budget comes down to early involvement by consultants, with outcomes also influenced in some cases by the contract structure between client and builder. The design and construct model and early contractor involvement model can both enable the consultants to take advantage of the builder’s own experience and knowledge.

“[It comes down to] presenting the design [for building services] at the right stage so that capital cost is not increased, or so sustainability is treated as an add-on or done as variations down the track,” Mr Deeks said.

There is also an important dimension around commissioning and operating systems at optimum levels as to minimise future maintenance and replacement costs, which again improves efficiency and brings down the overall lifecycle cost of sustainable systems.

WTP’s sustainability consulting arm is currently working on a wide range of government and commercial projects, including being engaged as the LEED certifiers for Melbourne Airport.

Currently, the company’s cost-planning division is undertaking the 30-year lifecycle costing for Perth Stadium and the North West Rail Link, which involves incorporating expertise from facilities management, sustainability and commissioning.

In general, the company is seeing expansive times ahead for all its service streams, which increasingly offer complementary and overlapping services from early cost planning and quantity surveying through to the commissioning, facilities management and energy monitoring services.

“We are very committed to [the sustainability services division] and are looking at expanding it to our Melbourne office – our next growth areas [for the business] are in Victoria and also in Queensland, and we are also looking at projects in Western Australia.

“We will be looking to increase staffing over the next 12 months and within the next five years [expect to be] adding additional service streams and bringing those to our other locations.”