This year, at their annual Built Environment Forum, the Royal Institute of Chartered Surveyors (RICS) turned their focus towards decarbonisation across the development lifecycle… right up our street, so naturally, we wanted to be part of the discussion.
In this article, we share some of the findings on the challenges, industry-wide approaches and thoughts on the solution.
It was great to see such a diverse panel of experts from across the globe sharing insight on matters such as addressing transition risks, the macro-economic outlook for infrastructure and construction and tackling whole-life carbon assessments in complex supply chains.
ADDRESSING TRANSITION RISKS IN REAL ESTATE
Undoubtedly, the number of buildings requiring transition is huge. The post-pandemic shift to ‘work from home’, changing tenant demands in design, fit out and technology, combined with policy requirements, rules and regulations, poor sustainability performance of buildings and failure to meet the dreaded EPC rating all lead to ‘office obsolescence’.
Lenders and Landlords need to proactively plan for the future of their office assets, addressing issues either through retrofit or redevelopment.
The question is, how do you identify and quantify high-risk assets across property portfolios? The answer requires the following benchmarking assessment:
- Is the asset fit for purpose?
- Does it comply with legislation?
- Does it satisfy the occupier?
“High-quality, functional office space that promotes occupiers’ wellbeing and creates spaces to meet, connect and learn from each other. This is what we need to attract people back into the office,” - Anna Tsartsari, Head of ESG and Sustainability at Built Environment Design Partners.
Admittedly, being in an office in the heart of London, on the 12th floor, surrounded by windows, with incredible views of the city’s skyline, a wellness room, breakout spaces, and unlimited (free) coffees, certainly helps draw me into the Montagu Evans office.
LOOKING TO THE FUTURE
How can we work towards a more sustainable future and achieve net zero carbon by 2050? Some of the panel’s suggestions included:
- Retrofit first to make our existing buildings work better for us and reduce embedded carbon emissions from demolition processes.
- Take a multi-disciplinary approach, working with sustainability and energy consultants from the outset and investing early to save money in the long term.
- Use modelling tools to visualise energy performance materials, moving away from the use of steel and concrete, which are rich in embedded carbon.
- Conduct carbon management assessments at the early design stage, pre-procurement, and maintain low carbon throughout the supply chain.
“Retrofit is brilliant … however, in terms of energy saving, 10-20% is not enough, you will have to do it again, we need to be targeting 80%” - Jane Anderson, Expert in Lifecycle Assessment at Caistor.
“Taking real estate as an asset class, we are the custodians of these assets; we have the power to futureproof and make fit for purpose so future generations can enjoy the same assets in 50-100 years into the future” – Sylvie Sasaki, Net Zero and Climate Risk Director at Aviva Investors.
PROSPECTS FOR PLANNING
So, what are the positives?
For planning and development, transition risk in real estate presents an exciting opportunity to re-purpose and identify alternative uses for obsolete assets, a chance to turn brown assets green.
“Outdated mono structural building complexes can be re-invented into social infrastructure or mixed-use developments” – Andreas Trumpp, Head of Market Intelligence at Colliers.
Do you own office space? At Montagu Evans, we offer a unique service, RetroFix, which assesses the building’s existing use fundamentals, exploring alternative use opportunities and understanding sustainability credentials. Our expertise helps provide practical advice and develop business strategies that work. Join the conversation, come and chat.