Comparing Cross Laminated Timber with Concrete and Steel - A Financial Analysis of Two Buildings in Australia

Sep 15, 2026

This research paper delivers a comparative financial analysis of a Cross Laminated Timber (CLT) apartment building against a concrete-and-steel apartment building constructed in Australia. The study models key development drivers by calculating and analyzing revenue, time, and cost variables for each option. Financial modelling produces performance indicators including Development Margin, Development Profit, Return on Equity (ROE), and Equity Internal Rate of Return (IRR). Findings support the economic benefits of CLT compared with conventional construction.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages13

Reading Time33 min

AccessFree to download

1. INTRODUCTION

1.1 Background

1.2 Research Gap and Research Problem

1.3 Research Aims

2017 Modular and Offsite Construction Summit & the 2nd International Symposium on Industrialized Construction Technology Shanghai, China, Nov.10-12, 2017 COMPARING CROSS LAMINATED TIMBER WITH CONCRETE AND STEEL: A FINANCIAL ANALYSIS OF TWO BUILDINGS IN AUSTRALIA Dylan S. Cazemier University of New South Wales, Faculty of Built Environment [Dylan.cazemier@gmail.com](Dylan.cazemier@gmail.com) Abstract. This research paper undertakes a comparative financial analysis of the performance of a Cross Laminated Timber (CLT) apartment building with a concrete and steel apartment building constructed in Australia. A product known as CLT has been found to be an effective alternative form of construction to building with the more traditional materials of concrete and steel. CLT can assist in reducing carbon emissions through carbon sequestration. Respective revenue, time and cost variables are calculated, analysed and compared per development. Financial modelling of these variables results in; Development Margin, Development Profit, Return on Equity (ROE) and Equity Internal Rate of Return (IRR). These figures are performance indicators used to appraise the development. The study supports the economic benefits when comparing CLT to concrete and steel construction. It is concluded that building with CLT may result in less development profit and margin, but an increased Equity IRR due to a reduced investment timeline. Keywords: CLT, Concrete, Steel, Financial model, Sustainability, Cross laminated timber. 1. INTRODUCTION 1.1 Background The world is in a current environmental crisis; the climate is changing due to human induced emissions of greenhouse gases [1] . Since pre-industrial times in the early 20th century global temperatures have risen 1.2°C [2] alarmingly close to the 1.5°C cap set by politicians in the 2016 Paris agreement [3] . This results in more frequent extreme weather conditions such as flooding, droughts and storms. This effects the livelihoods of all people, especially populations in developing countries that are arguably less resilient to extreme weather. Along with extreme weather phenomena, global warming melts the polar ice caps causing the sea level to rise [1] . Australia is a coastal country with 85% of people living in coastal regions, with a sea level rise of 50 cm, Australia will experience a 300-fold increase in flooding events; infrastructure that floods once every 100 years will be flooded several time per year [4] . Due to human induced climate change, there is a need to investigate developing the built environment in a more sustainable manner. The majority of apartments in Australia are constructed using a concrete and steel structure [5] . This is an issue as Kajaste and Hurme [6] state that 5-8% of global CO2 emissions derive from cement production. Cement is the substance that binds to aggregate that in turn creates concrete. In recent years, a product known as Cross-laminate Timber (CLT) arose in the 1990s from Europe. CLT panels are made from boards that are glued side by side to another and layered at 90 degree angles [7] . This then forms one rigid panel typically 5-7 layers thick. CLT panels can be used as an alternate to concrete and steel to create the structure of an apartment building. There is a consensus that when a forest is sustainably managed, wood is carbon neutral. Trees remove carbon from the atmosphere through carbon sequestration [8] . Furthermore, In Chen’s [9] life cycle assessment study of two 5 story buildings; one Dylan S. Cazemier made of concrete and steel, one of CLT, it was found that the CLT building consumed 15% less energy than the concrete building. Constructing with CLT can act as a part solution to reducing CO2 emissions from the construction sector and assists us moving toward creating net-zero carbon buildings. CLT buildings have become popular in Europe with Hundreds completed since the 1990s [10] . As at 2012 in North America, 4 manufacturers

FAQs

What comparison does the research focus on?

The study compares the performance of a Cross Laminated Timber (CLT) apartment building with a concrete-and-steel apartment building in Australia.

Which financial metrics are used in the analysis?

The paper calculates and analyzes Development Margin, Development Profit, Return on Equity (ROE), and Equity Internal Rate of Return (IRR) as development performance indicators.

What is the overall conclusion about CLT versus concrete and steel?

Building with CLT may yield lower development profit and margin, but it can increase Equity IRR due to a reduced investment timeline, supporting economic benefits.

Sep 15, 2026

Uploaded by Emma Wilson