Cost Considerations for a Mass Timber Office Building

Dayne Davis

Associate - Timber
In the ever-evolving world of sustainable architecture, while we are all looking at ways to lower our embodied carbon output as a society, mass timber has emerged as a game-changer.

It’s not just about aesthetics; it’s about efficiency, sustainability, and cost-effectiveness. If you’re considering a mass timber office development project, you’re on the right track. This blog will guide you through the process of costing and cost considerations, highlighting the various cost-saving aspects that make mass timber an attractive choice.

Speed on Site

One of the key advantages of mass timber construction is its speed of installation. Unlike traditional concrete or steel, mass timber components, such as glulam beams and CLT panels, are prefabricated, making on-site assembly much quicker. This reduces labour costs and minimises disruption to the surrounding area, which can be especially crucial in urban settings where time is money. Faster construction means a quicker return on investment.  In Timber Design Studio’s recent mass timber project, St. Luke’s Health in Launceston Tasmania (Australia), it has been noted by the main contractor that the mass timber structure was erected 50% quicker than what would be expected by a traditional concrete frame structure while only using a team of 8-10 carpenters on site.  This would equate to significant preliminary savings.

Less Load on Foundations

Mass timber is lightweight compared to concrete or steel. This reduced weight places less stress on the building’s foundations, leading to potential cost savings. The foundation design can be simpler and may require a smaller volume of materials, which can translate to substantial savings, particularly for large-scale office developments. It’s a win-win for both the budget and the environment.  The lighter weight of timber also allows us to consider its structural use as an extension on top of existing buildings When considering vertical extensions, substantial cost savings can be achieved by minimizing or eliminating the need for reinforcing the existing structure, especially when utilising lightweight materials like timber. However, this approach is less feasible with concrete construction due to the inability of the existing structure to withstand heavier loads.

Exposed Timber for Savings

If you opt to showcase the natural beauty of mass timber in your office development by leaving it exposed, you can save significantly on finishing materials. Unlike conventional construction, where walls and ceilings often require gypsum board, paint, and other finishes, mass timber provides a warm and visually appealing surface that requires minimal treatment. This not only reduces material costs but also shortens construction time. The aesthetic appeal of exposed timber can also attract tenants and clients, enhancing the building’s overall value. 

Less Waste on Site

Mass timber construction offers significant cost-saving advantages due to its minimal waste generation on-site. This aspect contributes to a more efficient and environmentally friendly construction process, benefiting both the developer’s budget and the overall sustainability of the project. Here’s a closer look at how mass timber minimises waste on-site and the associated cost savings:

  • Mass timber components, such as cross-laminated timber (CLT) panels and glulam beams, are typically manufactured off-site in controlled factory conditions. This precision manufacturing ensures that each piece is cut to the exact specifications needed for the project, reducing the need for on-site adjustments and the waste generated from cutting and trimming materials.
  • The components are delivered to the construction site on a just-in-time basis. This means that materials are supplied as needed, reducing the need for on-site storage, which can lead to waste due to exposure to the elements or theft.
  • Traditional construction sites generate significant waste that requires disposal, which can incur additional cleanup and disposal costs. With mass timber, the reduction in on-site waste leads to lower disposal expenses and less environmental impact.

Energy Efficiency and Cost Savings

Mass timber buildings are known for their excellent thermal insulation properties. They provide a naturally energy-efficient environment, reducing the need for extensive heating, cooling, and ventilation systems. Lower energy consumption translates to ongoing operational cost savings for both the developer and the building occupants. Additionally, the use of timber in construction can contribute to a reduced carbon footprint, aligning with sustainability goals and potentially opening the door to tax incentives or broader investment opportunities than traditional construction methodologies. 

Selecting the Correct Species or Products.

Selecting the right timber species and products is of paramount importance, as each species or product brings unique characteristics and performance attributes to the table. This choice is further complicated by the significant variation in timber availability and m3 rates not only across different regions in Australia but also on an international scale. The decision should factor in crucial considerations such as durability, strength, appearance, and sustainability, as well as regional pricing and supply availability. A well-informed choice ensures that the selected timber aligns with the project’s specific needs, environmental goals, and feasibility requirements. It also contributes to the responsible management of forest resources, thereby supporting sustainable forestry practices and promoting the longevity and quality of the constructed or crafted product.

How do I Consider This as a Developer?

The cost savings to a developer when a mass timber development is completed up to 40% quicker than a traditional concrete-framed building can be substantial and multifaceted:

  • Reduced Labor Costs: Quicker construction means fewer man-hours are required on-site. Labor costs can be a significant portion of a construction budget, and by shortening the construction schedule, a developer can save a substantial amount in wages and related expenses.
  • Lower Financing Costs: Developers often secure loans or financing for construction projects. A shorter construction period means less time accruing interest on these loans, reducing the overall cost of borrowing. This can translate into significant interest savings, especially for large-scale developments.
  • Faster Return on Investment: Completing a project more quickly allows the developer to start generating revenue sooner.  An earlier return on investment means the developer can start recouping costs and generating profits more rapidly.
  • Risk Mitigation: Longer construction periods can expose projects to various risks, including weather-related delays, labour disputes, and unexpected cost escalations. A faster construction timeline can reduce the likelihood and impact of such risks, saving both time and money.  I would also qualify that due to the fact that mass timber is a prefabricated structural element it leaves the developer less open to construction variations on site, especially if the timber forms the majority of the structural and internal fitout requirements for the project.
  • Opportunity Cost: Delaying the completion of a project means that it cannot be used or monetised until it’s finished. Completing a project more quickly allows the developer to seize market opportunities sooner, potentially generating additional revenue.
  • Rental Yields:  If the timber structure is left exposed and will form the majority of the internal fitout of the requirement then the developer must consider this as part of their financial and marketing strategy for the building.  The building could potentially be carbon neutral, or significantly reduced, which is a big marketing asset as well as some of the internal fitout is already completed for the tenant due to the timber already being installed.  We have seen some clients able to achieve higher than average rental yields due to these points of consideration.
  • Enhanced Budget Predictability: Longer construction periods can lead to uncertainty in budgeting due to fluctuations in material and labour costs. Shortening the timeline can help maintain budget predictability and reduce the likelihood of cost overruns.
  • Improved Reputation: Completing a project ahead of schedule can enhance a developer’s reputation in the industry. This can lead to future business opportunities, partnerships, and potentially even higher property values.
  • Savings on Construction Management: Shorter projects may require less intensive project management, reducing fees paid to construction managers or contractors.

When it comes to costing a mass timber office development, it’s essential to consider the bigger picture. While upfront costs may seem slightly higher compared to conventional construction methods, the long-term benefits far outweigh the initial investment. From speedier construction to reduced foundation costs, the advantages of mass timber construction are undeniable. When combined with the aesthetic appeal of exposed timber and the energy efficiency it offers, you have a recipe for a cost-effective and sustainable office development that will stand out in today’s competitive real estate market. For further exploration and discussion please reach out to the BG&E Timber Team to discuss this further.

Related Resources:

Balancing Concrete, Steel and Timber: The Future of Architecture and Structural Design | BG&E (

Mass Timber: revolutionising the construction industry

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