Takeaways from PlaceTech – ESG: The Retrofit Playbook
Last week I spent an interesting morning at the retrofitting workshop hosted by PlaceTech. Here are my key takeaways:
Retrofit first
Currently only 3% of existing buildings are re-used. However, many buildings earmarked for demolition are capable of being retrofitted to a high standard capable of competing with new builds. Tastes are changing and not everyone is looking for that white and grey box that seems to have been fashionable for far too long. Retrofitting allows you to retain some of the original character of an older building and a sense of history.
And the talk isn’t just about re-using existing foundations and structure. It goes right down to the ceiling and carpet tiles. It is a case of cataloguing what is there and working out the best ongoing use for those items. The target is to reuse 70% of existing buildings, however, Linda Thiel of White Arkitekter believes we should be targeting more like 95%.
We also need to be thinking to the future when carrying out current retrofits and new builds. We need to be using materials that will stand the test of time and cataloguing those materials so that they too can be reused when the time comes.
There is a tipping point, however, where a new build will give more benefits in saving operational carbon than the embodied carbon that can be saved by retrofitting. It highlights that every building needs to be considered on its own merits.
Cost savings
It is not as straightforward as saying either retrofit or new build is more cost effective. Currently, rents receivable are generally higher from a new build. Different tenants still have different priorities. Whilst the market has moved towards a requirement for higher standards in terms of energy efficiency, it is difficult to say whether this goes so far as a consideration of embodied carbon. The aim is, therefore, to retrofit to a standard that can compete with new builds and close that rental gap.
When retrofitting, the material costs are cheaper because a lot of the materials are already on site. And build times are often reduced by around 6 months, again resulting in a cost saving. However, retrofitting is often more complicated than building from scratch and requires specialist skills. It is impossible to know exactly what you are working with until you start peeling back the layers of the existing building. You therefore need to build greater margins into your pricing in case unexpected issues arise.
The general consensus was that, either way, creating buildings that cost less for people to run and also cost the environment less is the right thing to do.
Who pays? (And other tensions between owners and occupiers)
It is much easier to upgrade an empty building and then claw back the cost on rental value. However, it is not always possible to wait for that opportunity. In the case of works to tenanted buildings, it is important to engage with the occupiers throughout the whole process.
A tenant’s attitude to works will often depend on how long they have left on their lease and what the payback period is for the works. Payback periods are getting shorter, which makes these conversations easier. Costs largely still lie with the landlord and need to be seen as an investment to attract the best tenants. However, there has been much more engagement from tenants in recent years, especially since energy prices have soared. It seems the incentive is still largely financial rather than environmental, but it may be enough to start seeing tenants become more willing to chip in for environmental improvements.
Another issue is the handover. A landlord can find themselves spending time and money making environmental improvements, just for those improvements to be wiped out by a tenant fit out or inefficient use of the space. The key here is (a) engaging with tenants as early as possible to make sure the build suits their intended fit out and (b) having tighter control over fit out plans and the end result. In addition, smart meters can help landlords collect data on usage and then work with tenants to make sure buildings are being used in the most efficient way.
Lastly, green clauses in leases. These have become much easier to include, although tenants do still try to water them down. They are generally landlord driven (it is rare for a tenant to try adding their own environmental requirements) but they are also largely seen as a safety net. Landlords would much prefer to work with tenants and keep conversations flowing throughout the life of a lease, rather than pointing to a clause in the lease to force action.
Skills gap
As mentioned above, retrofitting is more complicated than building from scratch and a specialist workforce is required. However, there is a serious skills gap in this area. We need more investment in training if we are going to prioritise retrofitting from now on.
Evolving tech
It was highlighted recently that a New York skyscraper (One Vanderbil), which opened in 2020, is already considered out of date as tech and approaches to environmental issues continually evolve (you can read about this here).
The presenters at the PlaceTech meet believe that the answer to this lies in simplicity. Making sure the bones of a building are of a high standard and that the space is flexible so that it can be adapted to different needs. It is the smart aspect of a building that evolves most rapidly, so you need to be able to upgrade the building’s tech in an efficient way. This means limiting aspects that only a small number of contractors can work on or, for example, special cabling. Instead, you need to prioritise a central system where small parts can easily be upgraded as and when required.
Planning
There is a general consensus that the current planning system favours new builds. That is because it is impossible to know exactly what a retrofit will ultimately look like from the outset. With all the will in the world, when cataloguing the materials for reuse it will not be possible to ascertain exactly what can be reused (and how) until those materials are stripped back/out. As such, there are calls for a more trust based approach, that the end product will fit the intended theme, rather than looking exactly like the plans.
EPCs
It has long been recognised that EPCs have serious limitations. They measure the environmental impact of the building spec, with no consideration of how the building is actually used. However, the panel believe that EPCs remain an important metric for reporting and that they won’t be going away any time soon.
It was also recognised that this can create an issue for retro-fitting. The example given was that stripping a gas heating system from a building and replacing it with electric will increase the EPC rating. However, if there is nothing wrong with the gas system, the embodied carbon spent by replacing it could exceed the operational carbon from running it. So it becomes a balance between doing the right thing and being able to report the environmental attributes of the building.
Collaboration is key
There was a call from the panel and the audience for greater collaboration in the industry. It was recognised that there are lots of people out there making the same mistakes. The industry needs to be transparent and share experiences so that they can learn from each other’s mistakes and improve as a whole.
Subcribe to news and views