Pushing the limits – the costs of building tall

The elegant 528 metre Zun Tower nearing completion in Beijing is a recent example of the soaring buildings that are being constructed around the world in response to the challenges of denser cities. It is also one of the most ambitious and expensive ever built.

“It would be impossible to avoid complexity invariably without adding dollars. Buildings over 60 storeys inevitably take longer to plan, construct, manage and service than other buildings and that’s a primary driver of the significantly higher costs involved.”

It is not hard to see why. The Zun’s 120 storeys and 8 distinct zones blend offices, apartments, a hotel, shopping mall, art galleries and rooftop garden underpinned by underground parking and a subway, while the futuristic concave design and high-tech façade, not only dominate the city but deliver cutting-edge engineering and environmental performance too.

Yet as the world’s towers keep getting taller and more complex, they also become far more expensive to build as a result. While the basic equation for developers of how cost and value drive a return on their investment still stands, building efficiently, delivering optimum floor plates and premium market valuation all face new cost challenges as floors, different uses and bespoke designs are added.

COUNTING THE COSTS

One of the most significant structural cost drivers of tall buildings is the size and complications of the core, which has to be designed and planned differently to handle challenges like geotechnical issues, heights, uses, services and, ultimately, tenantable space.

Integral to any core strategy at height is the increasing integration of new towers with transport hubs like subways and stations, expanded basement parking, additional plant requirements, and seismic or other substructure considerations.

The core’s design and associated cost of construction are also directly impacted by the growing demands of vertical transportation. A higher proportion of lifts with more varied services such as express, double-deck or designated-floor calling are needed in higher towers to service a multitude of floors, spaces, tenants and visitors as efficiently as possible.

“Fast, flexible passenger movement in today’s towers is fundamental to market value, but that all comes at a premium.”

Construction is also a far more costly process when building high-rises, particularly in tight urban areas where space is at a premium or is highly regulated. Apart from inherently longer time lines from preplanning to completion, new towers create additional costs through far bigger demands on the workforce, scaffolding, cranes, procurement, power and site accommodation.

Labour costs also escalate with the specialisation of tall building construction, both in terms of skilled contractors or companies which may be in short supply in some cities, and need to be brought in from afar, as well as for experienced, multidisciplinary management teams. These are fundamental to delivering such huge projects on time and on budget.

Façades are the other major issue today’s developers and planners face. While they typically represent around 15% to 20% of building costs, façades are finding a heightened focus as the latest towers increasingly experiment with cutting edge designs or architectural forms, technological advances, or improved wind, ventilation and energy performance.

Façades can be one of the biggest areas for cost blow-outs, so detailed planning in the design phase and as part of the procurement strategy is essential to minimising cost premiums being incurred. The inclusion of repetitive detailing or off-site and prefabricated façade components can also deliver significant cost efficiencies as you head skyward.

Some of the global property markets’ latest snapshots suggests that the tallest skyscrapers are now the world’s most valuable commercial assets. With prices per square foot, sales and new towers continue to rise in concentrated cities like Hong Kong, Tokyo, New York and Sydney.

Next-generation towers do present financial risks for developers who want to stand out in crowded cities or create a premium address, but they also offer huge value opportunities in a world still pivoting to the idea of vertical cities.


You can read more insights on the rise of vertical cities and tall buildings from Arcadis and CallisonRTKL’s global experts at www.arcadis.com/tallbuildings

Matthew Mackey

Director - Cost & Commercial Ask me a question