Julia Cahill asks developers and architects how they see the future for London development. Do we need to build any new buildings? Should we? Is retrofit and refurb the only option because the carbon cost of new-build is too high? The following interviews offer a snapshot of how real estate is responding to the changing landscape.
Mike Hussey, chief executive, Almacantar
We are staring down the barrel of a gun
Having completed Marble Arch Place, its landmark scheme overlooking Hyde Park, Almacantar is already working on plans for its next big project, this time in the City.
It will involve refurbishing and extending existing buildings, some new development, and key changes to the road layout to reinvent a hostile, dilapidated and decaying corner of the City. And it will be very green.
The transformation would be on a par with that of the Southbank Place estate, where Almacantar owns the fully let One and Two Southbank Place office blocks – the first to Shell and the second to WeWork.
But as the proposals navigate the City of London planning system, their journey illustrates the layers of risk developers must grapple with – from onerous planning conditions to timescale uncertainty. ESG requirements and the rising tide pushing against new development due to its carbon impact are simply extra pieces in the Jenga stack.
Almacantar chief executive Mike Hussey, who has developed more than 20m sq ft of space in the capital in the last 25 years, is well placed to talk about the challenges in today’s market.
“We are staring down the barrel of a gun,” he says. “It doesn’t look very good for development, but I’m hopeful circumstances will adjust.”
Planning problems
Adjust it might, but it’s unlikely to go back to the unwritten rule of thumb of ‘a third, a third, a third’ – by which developers could expect the cost of a site, the build cost, and the profit to be roughly equal.
“One of the things that enabled developers to feel more comfortable about taking the risk was that they were normally able to take an inefficient building, knock it down and build something that’s bigger. If you’ve got capital and debt in place and you know where your end market is going to be, 50% of your returns are going to be driven by the fact you can do something that’s bigger,” Hussey says.
But now that “planning authorities are much less keen on significant uplift in built area”, that equation no longer stacks up. Or when an increase in area is approved, it’s at a cost – affordable housing or some other form of development tax. Perhaps more impactful among the factors throwing viability into doubt is the length of time it takes to get a major planning consent through – and the lack of a predictable outcome.
Where the planning process used to take 12 months in the City and 18 months in Westminster, now two to three years is not unusual and bigger regeneration projects can take four to five.
This is too long for the investment periods demanded by private equity, a key funder, thus changing (and probably shrinking) available sources of funding.
The availability of debt is also more difficult because of the extended timeframes and lack of predictable outcomes. The sector has also been grappling with massive inflation in labour costs and build costs.
“If you combine all of that, ignoring the whole ESG debate, projects are taking longer to get on site, take longer on site, you can’t build as big and they’re costing 50% more than they used to cost – the vast majority of development projects are simply unviable,” Hussey says.
Hoping for pragmatism
This is one of the reasons Almacantar has not been able to buy in recent years: the margins just aren’t reflecting the risk.
The irony, of course, is that if developers sit on their hands, the lack of supply could lead to “massive inflation in the existing stock” with no new product to dampen down rents.
He hopes pragmatism will prevail because if planning authorities “get too dictatorial about it,” none of the urban regeneration projects will happen.
“The City Corporation may push some big developments through. But they’ll have to be very green, and we’ll have to give other benefits like infrastructure changes,” he says.
Meanwhile, developers like Almacantar are waiting for the secondary office market to correct to unlock further development opportunities.
Secondary office market
Take a hypothetical 1970s office building in a decent location. The owner paid £100m for it 10-15 years ago and they have collected income off it. But their occupier is moving out and they must decide what to do next. Hussey says: “Do you invest large sums in the existing building and call on your own capital to create an asset that isn’t worth any more than you paid for it? Or do you sell it? And if you sell it, who are you going to sell it to and for how much?”
A developer might offer £120m if they know they can redevelop; £50m if they cannot; perhaps £75m if they really like it and believe they will be able to create an attractive product with the “good bones” of the building.
“These owners may be forced to go back to the planning authorities and say, I need to build two more floors on top, or I need to knock it down. And the whole debate is going to go back into that risk question again,” Hussey says.
Planning policy is unlikely to shift in favour of redevelopment, he says, particularly given Labour’s dominance of central London boroughs (with the exception of the City) and going to appeal looks too expensive for small assets. Refinancing is also out of reach without a commitment to turn the asset into a green building.
“The thing that’s going to give has to be the land or the building asset value,” he says. “The bottom line is there has to be a correction in secondary assets.”
Where does all this leave the future of development?
“There has undoubtedly been too much redevelopment of buildings that could have been repositioned, but I also think there’s a little bit of overreach in the way that people are looking at this subject,” Hussey says.
Not least because many existing buildings cannot be retrofitted to suit today’s sought-after occupiers in sectors such as life sciences, medical and hi-tech.
“The central London boroughs are going to be very driven by sustainability and environmental considerations. And I think that they will be resisting redevelopment where they feel there is a viable alternative. But at the same time, they won’t want to lose occupiers or the ability to attract certain sectors,” he says. That means they will need to find a way to support demolition and rebuild in some form on some sites.
“I don’t think development is dead, but it’s going to be more difficult to do it and impossible without a shift in policy direction.”
Gerald Kaye, chief executive, Helical
The winning formula
When Helical chief executive Gerald Kaye wrote the business plan for the Bower development next to Old Street Roundabout, EC1, he gave it the title “Less is more”.
The “grandiose” redevelopment scheme proposed by the previous owner was dropped. “I just thought, this is bonkers because you have got some perfectly convertible 1960s buildings,” says Kaye.
The structure and foundations of the two buildings were used in Helical’s 320,000 sq ft AHMM-designed scheme, completed in 2018.
Reducing carbon
It saved 12,493 tonnes of carbon by adopting a refurbishment and remodelling strategy rather than demolishing and rebuilding. Floors were added to both buildings as well as space on the sides. “The structural engineers did a good job,” says Kaye, who started out as a graduate surveyor in 1979.
“One can take just as much pride and enjoyment from a refurbishment as from a new building – perhaps more because the challenges are greater.”
Refurbishment and remodelling have proven to be a winning formula here and at other Helical projects, driven by business sense before embodied carbon was on the agenda. When Helical bought Rex House on Regent Street in the late 1990s, it dropped the proposed redevelopment scheme in favour of a refurb. “It is a perfectly good building,” says Kaye.
However, at the company’s latest project, 100 New Bridge Street, EC4, Helical again proposes to carry out a refurbishment which will have less impact on the environment than a new-build scheme.
Sustainability
A comparison with its new-build JJ Mack Building, EC1 – Helical’s most sustainable office to-date, with BREEAM Outstanding and NABERS five-star ratings, built on a site where a poor-quality post-war building was demolished for Crossrail – neatly illustrates the difference in carbon terms.
The embodied carbon for the 200,000 sq ft JJ Mack Building was clawed back to 816kg CO2E per sq m from an initial projection of 1,036kg through several steps, including using UK steel, Earth-friendly concrete and minimising construction waste.
At 100 New Bridge Street, where Helical will add a 40,000 sq ft 10th floor to the 170,000 sq ft building, and reuse 85% of the existing structure, Kaye says the embodied carbon figure is going to be below 500kg CO2E per sq m. It may edge closer to 400kg through recycling materials.
“That’s quite a good yardstick of what one is saving. If you can keep a significant amount of the existing building, you are going to save about half the carbon,” he says. “You are about 50% ahead of the game by reusing the foundations.”
Future of the market
He expects the market will increasingly be refurbishing and remodelling buildings which were put up in the 1980s onwards as “bones are good enough and a lot of them more or less maxed-out what they could put on the site”. Stanhope’s newly started refurbishment of Woolgate Exchange, EC2, developed by MEPC in 2000, is another example.
For Kaye, it is all about striking a balance. If you can refurbish and reuse, then you should, but it cannot be the only answer.
“We cannot move forward as an economy if everything has to be refurbished, because we would not be able to increase the amount of floorspace that is available,” he says.
Putting environmental considerations to one side, it is the numbers that must stack up. “If the building is adaptable, then to justify knocking it down you have to at least double it to make the numbers work, because of the extra time and cost involved in demolishing it, digging out the foundations, putting in new foundations and rebuilding it. It takes a lot longer to do that than if you are just doing a refurb.
“The bones of the building at 100 New Bridge Street are good, so there is absolutely no need to knock it down. The amount of extra space we are adding is not huge and therefore the structure takes it. But if you were going to put double the amount of space on the building then the existing structure would not take it and you would have to demolish it. For all the big towers in the city, you have to begin again. And those towers are needed,” he says.
Trans-Pacific Partnership
He cites the recent news that the UK will join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – a free-trade agreement between 11 countries around the Pacific Rim – as a positive headwind for the London office market.
“That’s going to be great for the economy going forward and one of the main things we are going to be selling into that group is services – which are going to be done from offices,” he says.
“London is a growing city, and the hub of the business community is still central London.”
When it comes to the Marks & Spencer site on Oxford Street, W1, Kaye has no qualms about saying that demolition and rebuild is the right answer for the Edwardian block. Walking past the site recently, he stopped to look at it.
“My thought was this: if M&S and the other landowners are prepared to provide a high-quality new building, which will have quite a large element of offices, then stopping them from doing that to keep the appalling collection of buildings that is there now would be taking it too far.
“If somebody is prepared to invest that much money in Oxford Street, they should be welcomed with open arms. Multi-floor retailing and department stores are not doing very well – there are not many of them left – and Oxford Street is going to be quite a big office location as these big stores get turned into offices.”
Some can be kept and remodelled, but others can’t due to columns and floor to ceiling heights.
“You can’t preserve everything in aspic,” Kaye says. “We are not going to decarbonise the world unless we have a strong economy. The only way we are going to improve things is if there is enough investment around to support new technologies and new infrastructure. Real estate has a role to play in that and we are doing some very good things by creating buildings which are much more efficient and higher quality.”
Karen Cook, co-founder, PLP Architecture
Refurbishment and innovation will lead office construction into the future
As she grows her new business, architect Karen Cook is basing herself at the Convene meeting and event space at 22 Bishopsgate, EC2 – the landmark office tower she designed for Lipton Rogers Developments and AXA, which completed in 2020.
She is launching her new business, Spice Design, into a rapidly changing market: some 75% of her conversations with potential UK clients are about the aggressive refurbishment of existing buildings, rather than building new ones.
“[In London] the pressure for that comes partly from planning and development restrictions in relation to St Paul’s Cathedral. But it’s also about carbon requirements,” Cook says. “People are having to be more strategic about what they do. In our pre-carbon-concerned society, they would simply have said ‘let’s drop a building’.”
Solving problems
In the face of multiple crises spanning climate change (and the associated need to reduce both embodied and operational carbon), health and cost inflation, she expects money in the future to go increasingly into solving problems and not into building icons.
“Development as we knew it is dead for commercial office buildings. But it’s very much a case of ‘development is dead, long live development’,” Cook says. “There will always be development. It will be more complex, and the question is: what rules do we need to satisfy? Government needs to impose the rules. There are market pressures too for innovation, for more sustainable buildings, and there is public pressure.
“It’s human nature to want to try to live better, so we need to be training good engineers and scientists and funding research to help us achieve the lifestyle we want and not use any fossil fuels. As an architect I feel excited.”
New typologies
Part of the solution, she believes, lies in more and more prefabrication, as opposed to bespoke construction on site. At 22 Bishopsgate (pictured), a prefabricated curtain wall was installed, for example. The possibilities are vast and open greater potential for retaining and repurposing buildings over time, as well as making the construction process more efficient and sustainable.
“You won’t be able to use any material you want, because you will need to satisfy climate change requirements,” she says. “There will be new typologies of buildings. If you need to be able to dismantle buildings, then you need to standardise more of the components. At the same time, buildings still need to feel unique so that occupiers feel happy with their identity.”
She also suggests that more materials could be manufactured in the UK to reduce the carbon cost of transporting them to site. “Everything you see on a building is coming from somewhere. There needs to be more done here,” she says.
Tour de force
Cook relishes the challenge. She used to regard refurbishment work as boring, she admits, but the 2003 competition for a major transformation of the 1974 Tour AXA – now Tour First – in the heart of the Paris business district turned that perception on its head.
The tower’s then owners, AXA Real Estate and Beacon Capital Partners, wanted to enliven the skyline and revive the area with a soaring new skyscraper, but without demolishing the existing building.
“I thought, ‘I will do this, and I will be bold.’ In the end, it was more challenging than anything I had ever done,” Cook says. Then at KPF, Cook led the competition-winning design. Floor plates were widened and 12 floors were added to take the tower to 52 storeys and 225m (231m including its spire), making it France’s tallest building. Concrete fire staircases were relocated to meet current regulations, six triple-height sky gardens were created to bring light into the workplace, a new high-performance facade was added and the tower was topped with three spiralling volumes of space.
“There were some very time-consuming steps, but it was faster in terms of planning,” Cook recalls. When the four-year project completed in 2011, the sustainability benefits of a refurbishment versus a new development were starting to be appreciated by the market.
That experience looks set to become increasingly relevant here in the UK. But Cook doesn’t expect the City of London to turn its back on new development. “The lifeblood of the City is its status as one of the leading financial centres of the world. I’m not sure it’s right to jeopardise that just yet,” she says. “In 2009, everyone was asking: why not put housing in the City? By 2018, people weren’t asking that anymore. We need to give it time to see what is needed.”
22 Bishopsgate
- 591 kgCO2e/m2 – total embodied carbon
- 41% lower than LETI’s business-as-usual benchmark
- 2% lower than LETI’s 2020 target
- Rated BREEAM Excellent
- Reuse of existing foundations and basement
Source: NLA
22 Bishopsgate was built on the abandoned construction site for the Pinnacle. When construction of the Pinnacle was halted in 2009, it left behind a three-storey basement with nine floors of concrete core and piles embedded more than 50m into the ground. Rather than excavating this basement and starting again, the team reused 100% of the existing foundations and 50% of the basement.
The project achieved the 2020 target for embodied carbon reduction recommended by the London Energy Transformation Initiative in its roadmap to net zero – placing it more than 40% below LETI’s business-as-usual benchmark.
Peter Fisher, director, Bennetts Associates
We need a meaningful starting point on embodied carbon
his is carbon that goes into the atmosphere now – not spread over the next 25 years,” says architect Peter Fisher, a director at Bennetts Associates and a key driver behind its sustainable projects.
“We need to have a dispassionate analysis of whole-life carbon and, particularly, upfront carbon. Because upfront carbon hugely outstrips ongoing operational carbon. I can state that as a fact. There are people who will say, ‘Ah, but you could knock it down and build a more efficient, modern building’. The arithmetic simply doesn’t work. It’s a disingenuous argument.”
If you take 2050 as the target date for net zero, Fisher explains, the upfront carbon of constructing a new building would probably be five to 10 times what its operational emissions would be between now and then.
Fisher is part of a seismic shift among architects, encapsulated and, to some extent, led by the Architects’ Journal campaign RetroFirst. Given the significant role of the built environment in the climate emergency, Fisher says architects increasingly feel a “genuine sense of purpose” – perhaps in a way they haven’t since the post-Second World War era of reconstruction. “That is definitely coming through in younger architects and students, more so than it has in the rest of my career,” he says.
Early adoption
Bennetts Associates’ first major refurbishment was the transformation of a dilapidated and inefficient 1960s building to provide offices for Hampshire County Council. The remodelling of Elizabeth II Court completed in 2009. “We did look at some very early embodied carbon analysis and it looks very rudimentary from today’s perspective,” Fisher says.
He is project lead for Timber Square in Southwark, SE1, where Landsec is creating 370,000 sq ft in two office buildings with public realm between them.
This is a net-zero carbon scheme, achieved in large part by keeping 85% of one of the existing offices on the former printworks site to create the Print Building with an upfront carbon intensity of 450 kgCO₂e/sq m. Alongside it, the new build Ink Building uses modern methods of construction to help drive its embodied carbon down to 650 CO₂e/sq m. Hybrid steel and cross-laminated timber mean the scheme is around 20-25% lighter than if built using regular materials. The overall development is 550 kgCO₂e/sq m.
Bennetts started work on the project in 2019. “I’m guessing if we had started five years earlier, it would probably have been a case of clear the site and start afresh,” Fisher says. This was the plan for the site’s previous owner, Gaterule.
By this point, Landsec’s agenda was different. In 2016, it became the world’s first commercial property company to have its carbon reduction target approved by the Science Based Targets initiative, linking its targets with the science of climate change. Bennetts Associates had its own science-based targets – covering energy use and travel emissions – approved in 2018, making it the first architectural practice to achieve this globally.
“The brief very clearly said we should prioritise timber construction for new-build and the retention of existing buildings. That retention was for carbon reasons,” Fisher says. The existing structure means Landsec can add several storeys.
Retaining character
Happily, there is another upside to retention over demolition: raw industrial character. Fisher sees the retention of existing buildings as an antidote to the bland steel and glass architecture that has come to dominate commercial office buildings. The language used around repurposing has changed, reflecting an important shift in sentiment, he says. “I think a few years ago, reuse or repurposing would have been called compromise. Now, it is referred to as character,” he says.
He sees corporate occupiers with net zero, science-based targets driving further action – and fast. Often their biggest carbon impact is the building they occupy and their business travel emissions. “People are moving out of buildings into much better ones. For now, many of those are new-build. But then you also get the buildings they have moved out of. What do you do with them? So quite a lot of work we are doing now is looking at those. Even refurbishing buildings we designed ourselves,” Fisher says.
Set a starting point
Fisher isn’t calling for a universal ban on new buildings but when he talks about analysing whether the case for demolition/new-build stacks up, he means environmentally. Where it doesn’t stack up, there may be other justifications. “I think there’s got to be this starting point on embodied carbon,” he says.
“We should have an initial presumption in favour of retaining. That must be a meaningful starting point, not the start of an exercise to justify what you decided you were going to do anyway.”
He believes there will be embodied carbon targets for new buildings. “Most other European countries have got those now. There will probably be some form of taxation placed on carbon,” he says. “And it will probably be quite high: And that changes a lot.” The current value for carbon pollution set in HM Treasury’s Green Book is £252/tCO2 and the UK Green Building Council recommends following this as an internal “shadow price”. “It would add up to big sums of money for the big developments,” Fisher says. “I hope that comes through in some legislative form. I’ve no hope it will under this government, but maybe under a subsequent one.”
Is that what is needed to really make a difference? “Yes. I think once you get a genuine price for carbon that reflects the damage being done and the cost of mitigating it, which is what the Treasury Green Book is intended to do, then that begins to make a big difference.”
He also sees the commercial property sector moving quickly off its own bat.
“Even agents aren’t the enemy anymore,” he jokes. “In fact, they are asking for stuff that’s undeliverable now. There’s no greater zealot than a convert. Agents understand the language and they know what is feasible – and they ask for a bit more than what is feasible.”
Zac Goodman, founder, TSP
Sustainability has become the latest battleground
You might expect someone who makes a living out of refurbishing old buildings to see limited need – or justification – for building new ones.
Not so Zac Goodman, owner of office investor and developer TSP.
He can be as effusive about retaining the Victorian windows of a former biscuit-factory-turned-office in London as he is about the new energy-efficient developments going up in the Middle East.
He is fascinated by the “footprints” left by the industrial machinery on the newly polished concrete floors of a 100-year-old warehouse in King’s Cross, N1, now the Thirty Lighterman office building (pictured below) – a project which diverted 100% of waste from landfill (EPC B, BREEAM Excellent, carbon-neutral). But he is also fascinated by innovations in low-carbon concrete to construct the buildings of the future.
He calls his approach to old buildings “rethroning great dames” and he does it because he spotted – earlier than many – that sustainability was a “decision vector” for a growing number of SME customers. Customers who at the same time were becoming more empowered in the landlord-tenant relationship because lease lengths were shortening.
“We have made sustainability our own rules of the game and our customers love it. It really sells to them. We have noticed that more and more people who are coming into our portfolio will say to us, ‘This is great because we have a sustainability policy and a commitment. It’s part of our business now and this complies with that’. And I can only see more businesses doing that in the future.”
‘Complicated and nuanced question’
His focus has been on pre-war buildings but he recently bought a 2003 London office with a plan to improve its EPC rating from B to A, and possibly A+. “Part of the reason we bought it is because it’s so well built and so well designed,” he says.
Yet despite the growth in opportunities like this – as prices adjust further for unloved 20,000-40,000 sq ft offices, hastened by the spectre of incoming MEES regulations and 2030 carbon net zero goals – Goodman is categorically in favour of building new buildings.
“We should always build new buildings. We should keep doing it,” Goodman says. He sees the global appeal of London as inseparable from its architectural diversity, the new rubbing up against the old.
Whether the environmental impact of knocking down the old to replace with the new means we should stop doing it is a “complicated and nuanced question”, he says. It doesn’t help that real estate has come “relatively late to the sustainability party”.
“There are areas where we are probably trying to over-compensate. There are areas where decisions are probably being made far too quickly,” he says.
Part of the problem is that sustainability is such a politically loaded issue. It has become a battleground between those who are trying to take an “altruistic, moral approach” versus the commercial landlords, he says.
“But actually, given the chance, most commercial owners want to make an impact,” Goodman believes. “They know that sustainability is good not only for business, but good for the city. They have a vested interest in communities thriving.”
He is concerned that progress is being stalled because the debate is mired in these tribal positions, when a more sophisticated approach is needed to address the problems together.
The debate is also missing a proper understanding of the time horizon we are judging planning decisions by, he says.
In other words, we know that when we put our minds to it, we can build incredible buildings that will last hundreds of years. It follows that pulling down old ones that are full of asbestos, no longer fit for purpose and of no benefit to the community to replace them with buildings that can be repurposed and adaptively reused over the next 200 years is the right thing to do.
It is also a crucial way for the market to foster innovation, he says.
Industry rule book
“If you stop allowing people to build new buildings, then you rob the private sector of the opportunity to innovate its way out of the problem of how carbon-intensive it is to build new buildings,” Goodman argues. “We are going to have to allow the free market to help find the solutions to some of these pressing problems.”
But to do that, more leadership is needed from government, he says. The new EPC regulations are the clearest indication yet of the direction of travel, but the industry is lacking a “rule book” when it comes to sustainability in development.
“A lot of local authorities say that sustainability must be the golden thread that runs through every application but what does that mean? It is very difficult to satisfy something that is so vague.
“Developers want the rules, and the rules right now are like trains moving across the track.”
Elsie Owusu OBE, architect
How to change the conversation around new-build versus retrofit
For Ghana-born British architect Elsie Owusu OBE, the impact of the climate crisis on Africa feels personal.
The daughter of a diplomat posted to London in the early 1960s, Owusu trained at the Architectural Association and went on to become a partner at Fielden+Mawson before setting up her own practice.
She now splits her time between continents: one with a disproportionate influence over architecture and development around the world; the other disproportionately vulnerable to the impacts of climate change.
In Ghana itself, around 45,000 people are affected by flooding every year, according to the World Bank. Half of the coastline is vulnerable to erosion and flooding because of sea-level rise. Yet Ghana’s carbon emissions on a per capita basis are just 24% of the global average.
“The effects are very pronounced” says Owusu. “And if we say, ‘let’s pull the M&S building down because we feel like it’, the effects are manifold.”
Part of the problem
It is not just the carbon costs of demolition and new build but the influence that has on how the rest of the world develops the built environment.
Indeed, UK architecture is a global success story worth more than £4bn a year, according to RIBA.
Owusu sees her own profession as part of the problem – but also sees a “real opportunity” for architects to lead a multidisciplinary approach to doing things differently.
She recently explored the growth of retrofit for an episode of BBC Radio 4’s Costing the Earth series entitled Rip it up and start again?.
“I don’t think there can ever be one solution in architecture,” she says. “I don’t think we’ll get to a point where people aren’t allowed to build new buildings, but I don’t think we should be tearing down old buildings for the sake of it either.”
Her own work has encompassed both: she was lead architect for arts and interiors on the renovation of Middlesex Guildhall to create the Supreme Court and was also responsible for the masterplan for Green Park station.
Once a candidate for the RIBA presidency, she is passionate about contemporary architecture and also completely unafraid of pointing the finger at male ego to help explain the profession’s bias towards building new.
“There’s a macho pride in building new buildings and making them as tall or as fat as possible, particularly in London,” she says. “Being seen on the London skyline makes your status and reputation – particularly if you can challenge views of St Paul’s.”
That macho culture “echoes down through the architectural profession,” she says, adding: “Developers have the same issue.”
By contrast, those who specialised in refurbishment were seen as second- or third-rate and those who called for change dismissed as eco-warriors.
“If you are doing big new buildings, your status tends to rise. You can look at the London skyline and say, there’s Renzo Piano – tick, there’s Norman Foster – tick, there’s Rafael Viñoly – tick. It’s almost like a game, but it’s not a game,” she says. “The culture of ‘tear it down and start again’ has real impact.”
Has that impact been wilfully ignored by the architectural profession?
“I think the carbon impact of development has been understood for a long time. Architects have said, ‘we must do something about this – but only after we’ve put up our own buildings’. It has only recently become an issue of international significance – largely thanks to the COP conferences,” she says.
And with it, retrofit has been propelled into the mainstream.
“There is an intense link between the historic conservation of buildings and the conservation of the earth and that is seen as important to the future of the planet,” Owusu says. “Retrofit used to be people toiling in the wilderness. Now it’s upgraded and it’s become fashionable, with a new King who has been going on about building conservation – what we now call retrofit – for years and who was dismissed. Now it’s being taken seriously.”
Diversity and transparency
She sees policy and legislation as crucial, but ineffective without a cultural shift. “That comes from diversity,” Owusu says. “There are different voices saying, ‘we do want to do things differently’. Covid has amplified that. People have been forced to hang fire and think. There’s no point in building huge numbers of offices if no one wants to work in them.”
The whole process of making towns and cities must change, she argues, and we must involve everyone – from children up – through education, social media and other channels.
“You might still build new, but you must go through a process. Where I would like to end up is that before people start tearing things down, you have a very easy carbon emissions review. There should be an easy-to-use tool.
“You don’t have to drag people through appeals and huge campaigns. It should be transparent – it should be easy even for school children to ask why a building is coming down.”
John Davies, head of sustainability, Derwent London
Rebuild or retrofit? We need to be pragmatic
Should we be building new buildings?
“It is a hard question that we should be putting to ourselves as an industry,” says John Davies, head of sustainability at Derwent London.
“But I feel that we need to take a pragmatic look at this issue – rather than a polarisation. It has become clouded with a lot of emotion around the climate emergency. That is understandable, but when you start looking at the nuts and bolts, you realise things are far more nuanced,” Davies says.
So decisions must be taken on a case-by-case basis.
Industry criticism
He sees the proposed demolition of the Marks & Spencer store on Oxford Street, W1, as a “lightning rod” for criticism of the industry, a story that landed at the right time. In retrospect, a better job could have been made of setting out the options for the site, he suggests, but stops short of revealing whether he backs its demolition and rebuild.
What he does say is that London’s “collage” of architecture sometimes makes retrofit an impossible task – even for a master like Derwent. Jumping straight to demolition to gain maximum space is not the right approach, but neither is trying to preserve everything.
“Sometimes a building is almost locked in its own time capsule,” says Davies. “So what do we do? How do we get this space to be utilisable, attractive, efficient – everything a potential occupier might want?”
At Derwent’s new-build BREEAM Outstanding Featherstone Building in Old Street, EC1, demolition of the existing buildings on the site was supported by Historic England. This was because the proposed scheme would “replace buildings of very poor quality that detract from the setting of Bunhill Fields [burial ground and conservation area] with buildings of much higher quality, which in terms of design and materials are much more appropriate”.
The 127,300 sq ft office-led scheme delivered an 81% uplift on the previous floor area. Crucially, Davies says it incorporates many of the innovative ‘long-life, loose-fit, low-carbon’ features of Derwent’s adjacent 2013 retrofit scheme, the White Collar Factory.
The aim is to get as many “rotations” out of the building as possible. “We are trying to build in a level of future proofing, flexibility and recyclability into the building,” Davies says. That means Featherstone is designed for today’s office occupants and for the next generation of occupants.
New-build vs Retrofit
Davies worries that the polarisation of the debate on new-build vs retrofit masks the range of options within the latter. The Angel Building, EC1, for example, was a deep retrofit, which took the building back to its concrete frame and reused this to save 7,400 tons of CO2. The Tea Building, E1, on the other hand, was a retrofit of the existing industrial building to create commercial office space.
“With the Tea Building, we were looking at ‘how can we stop this thing leaking? How can we get the heating and the cooling to be efficient in such a heavy structure, such a leaky structure’. Whereas at the Angel, we were taking it back to its frame and adding some new bits to it, so we were asking ‘how can we do that sensitively and in a low-carbon manner?’” Davies explains.
The two projects needed “different, deft touches, different ways of coming at the issue to achieve the same outcome, which is a low-carbon, efficient building”.
“If you start saying that we can only utilise the existing building and we cannot not utilise the existing with new development, that is not going to take us to that pragmatic spot,” he says.
It also misses the point that a retrofit project can be “pretty darn awful and fail to address the energy efficiency issues,” Davies says. “We have seen several examples of well-meaning interventions which have just actually made the carbon footprint of the building worse as a result.”
That will not satisfy stakeholders. From shareholders through to occupiers, expectations are “sky-high” and carbon is “front and centre” in all discussions. Local authorities, Davies says, are “very much asking those pertinent questions and beginning to start laying down prerequisites”.
He expects this will be followed by a standardisation across the central London boroughs of how they approach carbon for most significant applications.
Guidance
Major developers are already used to taking planners through the various levels of intervention that could be taken for an asset and comparing the carbon impact from an embodied and operational perspective.
“We need to help them do that so they can work out whether a scheme fits with policy and whether it is the right approach for their borough,” Davies says.
As with other initiatives, such as the adoption of NABERS from Australia to measure the energy efficiency of buildings, the industry is taking matters into its own hands rather than waiting for government to deliver on the detail.
In May 2022, a cross-industry steering group joined to develop a standard for verifying UK buildings as net-zero carbon. The project, chaired by David Partridge, brings together bodies including, Better Buildings Partnership, UKGBC, BRE, the RICS, Carbon Trust and RIBA to work on a single, defined methodology.
Publication of the UK Net Zero Carbon Buildings Standard is expected this year and will cover everything from embodied carbon profiling to operational energy profiling. It will be “the mothership,” says Davies, effectively showing the characteristics a net-zero carbon building should display.
“I think it might help give that level of consistency, as opposed to the inconsistency we have at the moment between the opinion of one borough and its advisers and another borough and its advisers.”
The industry must get “a heck of a lot more discerning” about its new-build projects. “We will only get there if everybody is looking at it from a pragmatic basis and consistently applying it. Inconsistency again kills it,” he says.
Whatever decision Michael Gove, the secretary of state for levelling up, housing and communities, comes back with on the M&S scheme this summer, Davies believes it won’t stop what the industry is trying to do to get to net zero.
“I think as an industry we are far more collaborative than we have ever been. Property is probably perceived as a bit old, a bit dusty and not particularly fleet of foot. But in my 24 years in sustainability, I have never seen a sector accelerate as quickly as this one has in the past two to three years. The speed has been breakneck,” he says.
Jacob Loftus, chief executive, General Projects
A number of buildings will qualify for exemption from retrofitting
“The number one starting point should be the assumption that existing buildings should be retained and retrofitted,” says Jacob Loftus.
“And then we need to design the quantitative and qualitative criteria to determine whether a building should have an exemption from this default position.”
As chief executive of General Projects, the boutique development company he founded in 2016, Loftus is making his mark as a reinventor of existing building stock.
Current projects include the Richard Seifert-designed former Woolworths HQ in Marylebone, NW1, (pictured below) where General Projects and partner Henderson Park briefly weighed up the options of retrofit and extension versus knock-down and rebuild before embarking on the former. With architect AHMM, Loftus says they are creating space equal to what could have been achieved through a rebuild, less the carbon impact. The character of the original architecture will be retained and new space added using a hybrid of steel and timber; 27,000 sq ft of green spaces will be added to a one-acre site which previously boasted no green spaces at all.
He is realistic that not everything can be given such star treatment.
“I think it’s important to go on record and say I would expect that a significant number of buildings would qualify for the exemption, because not every building is going to be appropriate for full retrofit. But hopefully the vast majority should be,” he says.
A growing number of local authorities in central London agree with him and are honing in on the importance of retrofit and retention projects and pushing that narrative onto developers. But, says Loftus, when a local authority asks a developer why they are going for demolition rather than retrofit, there is no framework through which to evaluate the developer’s response.
“It is a bit of a one-sided battle. The criteria haven’t been set and the regulatory framework hasn’t been established, so it is a harder battle for the council to fight,” he says. “There are no set rules for the referee to determine how to keep score and weigh up the balance,” Loftus says. “I think we are missing a referee too.”
Some of this can be addressed through the planning system, he says, by requiring developers to publish the kilograms of carbon that are going to be associated with a project based on different scenarios (covering rebuild and refurbishment) and looking at this alongside the projected annual carbon emissions from the completed building over the next 50 years – again, based on different development scenarios.
“It might be that demolition and rebuild actually looks better over the long term in some cases,” Loftus says. The point is to get the information into the public domain so a judgment can be made, and so the public is better informed about the consequences of the decisions being taken.
But there are many more layers of complexity to any major planning application and decision, Loftus points out. Indeed, the debate around retrofit versus rebuild is such a tangled one because carbon cannot be the only criteria. You might be able to reduce the carbon footprint by retrofitting an existing office but if that building is not going to be best in class or can’t deliver the quality of product end users want or isn’t future-proofed, then saving it from demolition might not be worthwhile.
“You might make the sustainable choice today in retrofitting that building, but find it is unlettable in five or 10 years’ time – and you have produced a huge amount of carbon in retrofitting it,” Loftus says. “If it then needs to be redeveloped or comprehensively changed again in the future, that might not have been the right choice.”
Against this backdrop, Loftus says he would welcome the use of financial incentives to really move the dial.
“If you say there are externalities to society of demolishing a huge building and building something new – carbon, traffic, pollution, etc – one would assume there would be a tax or a disincentive towards that approach as much as there might be an incentive towards the other approach. That would also help push the market towards the more sustainable option. But again, that doesn’t yet seem to be something that is in the wider discourse around the topic.”
Nevertheless, he’s encouraged things are moving in the right direction and sees the furore over M&S’s plans to demolish its flagship Oxford Street store as a welcome sign that embodied carbon has gone from being a “niche” element of sustainability to entering mainstream consciousness.
“Embodied carbon and the re-use of existing buildings has been an inconvenient side to sustainability – it’s not something a lot of people want to put a spotlight onto because it doesn’t chime with the ESG agenda of many of our leading real estate companies.
“Yes, they are building these huge new BREAM outstanding buildings, but they are also demolishing hundreds of thousands of tonnes of existing buildings to get there. The two don’t really chime up, so this has been the bit that hasn’t been focused on,” he says. Not any more.
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