On the face of it, the concept and the theory of retrofitting makes sense. We are facing a domestic housing crisis, an increase in vacant office space and an even larger environmental crisis.
Why wouldn’t we just repurpose our existing stock? With infrastructure in place, we could save time, money and our all-important national heritage by repurposing our existing buildings. But the question is, can it be viable?
The event focussed on these questions and what a new labour government could do to support and incentivise retrofitting and repurposing to make it a more appealing option to developers and investors.
Devil is in the detail
"Retrofit schemes are inherently risky; they are not simply a matter of following plans like a new build. The process is all about discovery and managing unforeseen challenges, requiring thorough surveys and flexible approaches to handle unexpected conditions".
Mark Swetman, LS Estates. "Retrofit projects require an unyielding focus on the 'bones' of a building" Swetman continues,
"not all structures are suitable, especially those with historical limitations or inadequate structural integrity. The key is to know what to avoid, ensuring future project viability isn't compromised".
Each potential retrofitting project requires a comprehensive analysis of a building to the identify potential risks and rewards. Surveys identify potential structural weaknesses or hazardous materials which can significantly impact project feasibility, but it is the collection of data that is vital to a retrofit project's success. Not only through the collection of current use metered data helping to build a picture on existing performance, but also in relation to carbon emissions, energy consumption, heritage requirements and the likely lifespan of existing M&E. Understanding a building is crucial to make an informed decision for the future.
Knowing your market
A deep understanding of occupier requirements at an early stage of the process is critical. It seems like an obvious statement, but the industry has not always been good at understanding its end user. Increasingly tenants dictate what they want and how they plan to use the space.
The need to look at offices differently accelerated post pandemic. Redesigning to respond to hybrid working, adding amenities for break out and social spaces, as well as a growing demand for outdoor space, there has been a pressure to adapt and modernise. And interestingly, office space has become an important part of the brand for office tenants, playing an integral role in maintaining and attracting new talent.
To avoid being left with obsolete and unlettable assets, developers and investors need to fully understand the nuances of the market and end-user. For example, the occupier of a retrofit office is likely to be quite different to one of a new build. Companies looking at retrofit tend to be smaller in size, often looking for something that meets more niche requirements in terms of location and floor plate vs a large corporate.
Accreditations – help or hindrance?
As with new builds, many lenders and planning authorities require developers to obtain exceptionally high accreditations on retrofits.
Encouragingly, this is not impossible to achieve as
Rob West of Clearbell commented,
"we used to think that it wasn’t possible to retrofit listed buildings to EPC A, but we have now done it twice in London and once in Manchester. The challenge to retrofit older stock is, as ever, to ensure that the day one valuation fully reflects the cost and risk of the process”.
However, there is a clear difference in requirements. Building from the ground-up, where the materials and infrastructure can be tailored specifically to meet those accreditation requirements, is one thing. A retrofit project using existing structures and materials starts at a different point in a building's lifecycle.
So, is it right to assess new builds and retrofits on a like for like building or should we be looking at other elements? Adopting a separate approach to sustainability over accreditation could encourage more retrofitting projects. Perhaps prioritising embodied carbon savings over accreditations for retrofit should be considered as this will realign focus to the project's true environmental impact and overall environmental footprint overall an arbitrary rating
Looking ahead
Futureproofing a retrofitting project is a complicated task. It encompasses a delicate balance of preserving the key features of a building while weighing up how and where it can be modernised to ensure it will last through at least a generation. It requires developers to anticipate changes in technology, energy, regulations, and user requirements. Designs and plans need to be flexible so buildings can adapt to evolving demands, thereby extending their useful life and maintaining their market value. Ultimately, a retrofit can't be optimism without thought.
What did stand out in this discussion is that retrofit and new build have to be looked at and measured separately. To compare two completely different scenarios is like comparing apples to pears. It will not encourage or incentivise the built environment to embrace the retrofit or repurposing of existing buildings. It was also clear that councils cannot simply apply a broad brush 'Retrofit Only' approach as not all buildings will qualify. However, a 'Retrofit First' approach encourages developers to review the retrofit options.
The Bisnow event was held on Thursday 4 July at Nuveen's BREAM Outstanding retrofit office building in Devonshire Square. The building was apt for discussing the topic of "Investing in The Future: Opportunities In Retrofit", with the first panel moderated by Rebecca Davison, Howard Kennedy. Rebecca was joined by industry experts Mark Swetman, LS Estates, Rob West, Clearbell Capital, Ami Kotecha, Amro Partners, Andrew Booth, Nuveen and Daryl Harris, Lockton.
A separate panel was held that included industry experts Ross Sayers, John Davies, Sophie Goddard, Andrew Davison and Daniel Hunt who represented LandSec, Derwent London, Canary Wharf, Studio PDP and Agilité.
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