Timber construction as an investment

Timber construction not only scores points ecologically, but increasingly also from an investor's perspective. It offers cost certainty, shorter construction times and reduces regulatory and market-related risks, despite higher construction and life cycle costs in some cases.

Timber and hybrid buildings have established themselves as a serious alternative to energy-efficient solid construction. Studies conducted by Wüest Partner and Durable on behalf of Lignum and FOEN show that timber buildings can compete with solid construction in terms of construction costs and performance, although they are slightly more expensive on average. For investors, timber construction thus becomes a building block for achieving sustainability goals without sacrificing economic solidity.

Costs, life cycle and risk profile
In a cost comparison, the median construction costs of timber buildings are around 10 per cent higher than those of solid construction. In the lower price segment, however, the values are very similar. Energy standards such as Minergie-P have a greater influence on costs than the choice of load-bearing structure. In the short to medium term, timber buildings benefit from high cost security, lower operating and maintenance costs and a better deconstruction and reuse profile. Over very long periods of 80 years, the greater durability of mineral construction methods has a positive impact on costs, meaning that their life cycle costs are lower.

Ecological advantage and Green Premium
Ecological evaluations show that timber constructions reduce grey greenhouse gas emissions by an average of around 20 percent compared to a mineral twin, and significantly more for individual components. The effect is particularly large in the case of extensions, where timber construction enables significant CO₂ savings compared to replacement new builds and creates additional space at the same time. International meta-studies on certified green buildings also point to price and rental premiums as well as lower capitalisation rates, an indication that the market rewards sustainability as a risk buffer.

Time as a yield driver
The green premium in timber construction is primarily created by process advantages. A high degree of prefabrication, modular systems and digital planning significantly shorten the construction time. For investors, this means earlier returns and a reduction in construction and project costs due to the time factor. Model calculations estimate savings of around CHF 200 per square metre for a six-month time saving. At the same time, scheduling, coordination and weather risks are reduced, resulting in more stable budgets and more predictable cash flows.

Strategic role in the portfolio
Institutional investors such as specialised sustainability funds see the main added value of timber and hybrid construction less in rents than in ecological benefits, the reduction of stranded asset risks and robust ESG positioning. In existing buildings, timber construction scores particularly well in the case of extensions and redensification, where its lightness and prefabrication lead to superior overall economics. For yield-oriented investors, timber construction is therefore particularly worthwhile where process advantages, ESG strategy and location quality interact.

Quelle: HSLU