Clearbell welcomes new dining experience to Coventry’s Belgrade Plaza.

Located in the heart of the city centre, the forthcoming Wing Kingz establishment will occupy 4,433 sq ft of retail space and is set to open its doors to patrons in Summer 2024.  

Belgrade Plaza, a cornerstone of Coventry since its establishment in 2008, spans 129,500 sq ft and offers a blend of residential, leisure and retail facilities, including residential apartments, a 120-bed hotel, restaurant units, a retail unit and gym. Current occupiers include renowned brands such as Premier Inn, Pizza Express, Café Rouge and JD Gyms. 

Beyond its commercial significance, Belgrade Plaza is a vital community hub, offering a range of amenities and events catering to locals, students and businesses. Notably, the recent ‘Easter Big Bunny Bake-Off Workshop’ held over Easter, provided children with an opportunity to showcase their baking talents during the holiday season. The event, which featured free workshops and a chance to win gift vouchers for Belgrade’s restaurants, received enthusiastic participation from the community.  

We are excited to welcome Wing Kingz to Belgrade Plaza, enriching our dining scene with even greater variety. This addition reflects our commitment to continuously enhancing the overall experience for everyone who walks through the doors. With Wing Kingz joining us, we take another step forward in our journey to solidify Belgrade Plaza’s position as a premier destination for dining and entertainment.”

Toby Saul, Associate Director at Clearbell Capital

We were pleased to act for Clearbell in attracting Wing Kingz to Belgrade Plaza. They are a welcome addition to the tenant line up and will offer something unique for the residents of Coventry. A sports bar with wings, seems to me, to be a winning combination!”

Richard Jones, Director at Avison Young

We are delighted to become a part of the Belgrade Plaza community. Our unique menu offers a wide range of flavourful, premium wings and other American-inspired dishes that we believe will resonate with the diverse tastes of Coventry’s residents and visitors. We can’t wait to open our doors and provide an exciting new dining experience for everyone to enjoy.” 

Josh Sandher, Director at Wing Kingz

Clearbell was advised by Richard Jones, Director at Avison Young, while Rupert Long, Partner at BKL Property acted for Wing Kingz. 

Durham’s Riverwalk welcomes a taste of Thailand with new letting.

The award-winning Thai street food chain is set to open its seventh branch this September, having agreed a 15-year lease at the Riverwalk, a mixed-use development at the heart of Durham city centre.

Overlooking the River Wear and with impressive views of Durham’s historic cathedral and castle, the Riverwalk is home to both retail and leisure occupiers, along with 253 units of student accommodation. Clearbell purchased the 250,000 sq ft centre in 2014.

Zaap Thai will occupy a 3,500 sq ft unit, and will join a number of well-known restaurants, including Cosy Club, El Pincho tapas bar, TGI Fridays and Turtle Bay.

The restaurant group currently has branches across locations in Leeds, Sheffield, Nottingham, Newcastle and York, and has plans to open two additional major locations in the next 12 months. Zaap’s menu boasts over 100 authentic dishes, offering eat-in and take-away options, and with colourful décor to transport its guests to the lively streets of Bangkok.

The newest Zaap branch will feature the group’s trademark open kitchen, tuk tuk seating booths, neon lighting and unique graffiti.

Zaap Thai will be a fantastic addition to the variety of great food, drink and leisure operators that already call the Riverwalk their home, with Zaap’s accessible but high-quality offering providing the perfect blend for the Riverwalk’s customers. Providing new and exciting retail and leisure options for our customers is part of our active management programme to ensure that we’re always evolving to their needs, but also supporting the long-term success of The Riverwalk. We’re looking forward to the venue opening in September and bringing an authentic Thai experience to Durham’s residents and visitors.”

Toby Saul, Associate Director at Clearbell Capital

It was a great experience working with associates at Clearbell, Francis & Co and Pudney Shuttleworth to secure this new location for Zaap at the Riverwalk. With its rich history and diverse population, Durham is an ideal fit for our newest location. The restaurant is now set to undergo significant renovations to prepare for the September opening. It’s likely that the extensive menu will mean a completely new and exciting dining experience for our guests.”

Christopher Hammond, Operations Director at Zaap Thai

Zaap Thai is part of the Sukho Group, founded by chef and restauranteur Yupha ‘Ban’ Kaewkraikhot in 2002. The group currently operates nine restaurants, including the Zaap Thai chain and fine-dining brand Sukhothai.

Clearbell expands industrial portfolio with Wolverhampton acquisition.

Clearbell Property Partners IV LP (Clearbell), managed by private equity real estate fund management and advisory business Clearbell Capital LLP, has completed the acquisition of a new industrial asset in Wolverhampton for £7.725 million, £79psf cap val. This purchase expands Clearbell’s logistics portfolio increasing the number of assets from six to seven.

Parkside, Wolverhampton consists of eleven units, let to 4 tenants and is 94% occupied. This acquisition aligns with Clearbell’s strategic focus on securing industrial assets below replacement cost as well as offering significant reversionary potential to enhance rental values.

As part of comprehensive upgrade plans for the Wolverhampton site, Clearbell will reroof some units, install photovoltaic (PV) panels, expand yard areas, upgrade signage and improve the general appearance of the estate. Sustainability will be a key focus throughout, with all EPCs improved to an EPC B or better enhancing the site’s environmental performance. The vacant unit will receive a minor refurbishment before being relet.

The Wolverhampton acquisition is an excellent addition to our logistics platform, aligning with our strategy of purchasing industrial properties with significant reversion and below replacement cost.

The compelling opportunity here is to enhance rental values, improve the EPCs to an institutional standard and upgrade the estate’s overall appearance and functionality. We are excited to add Wolverhampton and continue to search for new opportunities for the portfolio”

Rob Cole, Senior Investment Manager at Clearbell Capital

Clearbell was represented by MK2 on the acquisition.

The industrial property market is buoyant in the West Midlands, particularly for good quality multi let estates in Wolverhampton and the surrounding areas due to its central location and rich history in manufacturing and engineering. As such, it is attracting both occupiers and investors.

“Parkside Industrial Estate presented a strong case for investment, with potential rental growth and asset management opportunities.”

Mark Rooke, director in MK2 Real Estate’s investment team

Oliver Forster, senior director in CBRE’s investment properties team, advised the vendor. He said:

The sale of Parkside, following a competitive process, demonstrates the continued investor demand for multi-let industrial opportunities in established locations.”

Oliver Forster, senior director in CBRE’s investment properties team (advisory to the vendor)

Rental growth: Why waiting for interest rates to fall might be a mug’s game.

The recent 25% slump in capital values has been driven by the increased cost of capital, but the big story of this downturn is that rental growth has continued – in contrast to the steep falls of previous slowdowns. 

Limited supply has helped: tighter post-GFC regulations, Brexit, Covid, the growth of online shopping and inflation/monetary tightening have all contributed.   

The fallout from ‘Trussonomics’ meanwhile worked to prevent over-supply in the booming logistics sector, supporting rental growth.  Likewise for residential, with the acute under-supply of space generating double-digit rental increases last year. 

Even the beleaguered office sector has seen rental uplift, albeit at the very top end.  The market is responding to the glut of secondary offices, with net office space continuing to fall and an ‘over correction’ possible at some point.  

A new development boom is not imminent.  Energising the planning system is difficult, while higher costs and exit yield assumptions continue to challenge development viability.  

Demographics will continue to drive residential demand, with the population expected to soon reach 70 million.  Despite remote working, demand for amenity rich and sustainable offices is rising, while rebased retail rents mean that good locations are well-positioned for growth.  

While affordability issues may dampen rental growth in some sectors (e.g. beds), there is scope for rents to accelerate, after decades of below trend growth and efficiency gains from technology and improved sustainability.  

While the risk-free rate was the standard benchmark for property yields, there were sustained periods when strong rental growth forecasts created a ‘reverse yield gap’.  So, history shows it is possible to make solid real estate returns without ‘free’ money.  

There is now a major opportunity to invest into a re-priced market with strong rental growth prospects. As active real estate managers, we have more control over asset level rental performance than exit yield and, if we get this right, we can deliver good returns for our investors. 

Maidstone’s LOC8 phase one fully let as second phase pre-lets gather momentum.

Nivek Catering Supplies, an independent distributor of catering supplies across the South East, has now committed to joining LOC8 phase two, taking on 20,501 sq ft.

They will join Huws Gray, the UK’s largest independent builders’ merchant, and healthcare furniture supplier Ocura Healthcare. The two businesses signed agreement for leases this year, securing 24,951 sq ft and 31,216 sq ft units respectively.

Clearbell broke ground on the second phase of LOC8 earlier this year in what will be the next step towards realising the site’s full potential and generate up to 1,200 new jobs. LOC8’s phase 2 will see 185,200 sq ft of space developed across seven units, with completion scheduled for September 2024. The new units will take the development to more than 435,000 sq ft. Following the latest pre-lets, three units remain available, ranging in size from 25,601 – 36,398 sq ft.

Located in the heart of Kent, at Junction 8 of the M20 in Maidstone, LOC8 has been developed to a high sustainability specification, with extensive solar panels and EV charging points throughout. With phase one achieving a BREEAM “Very Good” rating and EPC ratings of A and A+, the second phase has taken the additional step of targeting a BREEAM “Excellent” rating. As part of this, all the new units have been designed to be gas-free, running only on electricity. Much of that electricity will also be provided by the solar panels installed on the units, providing cost savings of circa £135,000 per annum to occupiers.

The site also provides for a biodiversity net gain of 10% with 12 acres of new wildlife habitat, including nearly 12,000 new trees and four wildlife ponds.

We developed LOC8 to the highest standard with our prospective occupiers’ requirements as our priority. Fully letting LOC8’s first phase and securing 50% pre-lets at the second is testament to the sustained demand for sustainable industrial and logistics sites in the region. We’re excited to be working with our new tenants, Nivek Catering Supplies, Ocura Healthcare and Huws Gray, amongst many others, to provide them with great spaces to continue their growth in the region.”

Toby Saul, Associate Director at Clearbell Capital

We are really looking forward to opening our new facilities later this year. This marks a significant milestone for Ocura Healthcare Furniture, providing a modern and sustainable environment for our dedicated team. Our new building will enable us to increase our production capacity, improve our logistics, and enhance our ability to serve our valued customers with even greater efficiency.”

Murray Smith, Sales & Marketing Director at Ocura

After significant post-pandemic growth, we are excited to be relocating our business just 9 miles away to the modern, state-of-the-art facilities at LOC8.”

Richard Barrett, Managing Director at Nivek

This move secures our future growth plans, creates an improved environment for our staff, and enables us to continue to offer award winning customer service for years to come.”

Kevin Slater, Chairman at Nivek

Phase one of LOC8 comprises 245,000 sq ft of space across 11 warehouse units, ranging in size from 5,000 to 60,000 sq ft.

LOC8 benefits from links to the key trade hubs of the Thames and Channel Ports and Eurotunnel, as well as access to the South East’s large, skilled labour pool. The site is also connected to the nearby Maidstone town centre by a new electric bus service and cycle lane, created to reduce car usage in the area.

Clearbell purchased the site in 2019 as part of its existing portfolio of multi let industrial developments.

PBSA upgrades offer solid returns.

Recent research shows that while the student population has risen by 400,000 since 2019, the number of student houses has fallen by 19,000 in the same period, according to Sky News. For students going into their first year – and their parents – the problem is adding to an already stressful time.

The supply shortage has been compounded by a rapidly shifting demographic student mix. In the past few years, efforts to drive up the proportion of university students from lower socio-economic backgrounds have coincided with a high-inflation environment that has hit young people’s spending power more than most.

In the student housing market, the results have been predictable and well publicised, with providers struggling to deliver enough affordable beds for students whose only means to pay their rent is via maintenance loans. The market is struggling to solve this significant problem in a way that is sustainable for investors. Inflation is also responsible for the market’s inability to tackle the growing shortage of available beds for students.

In recent years, developing more purpose-built student accommodation (PBSA) has been seen as the solution. But higher land prices and building costs, and a congested planning system, make this an increasingly unattractive option for investors and developers.

In previous years, a steady stream of wealthy overseas students willing to pay a premium for newer, better-serviced schemes meant a focus on new build could be rationalised from an investment standpoint. But with uncertainty about Brexit’s long-term impact and changing rules for overseas students, investors will need to seek alternatives that cater to a wider segment of the market.

It’s not just the availability of beds but the quality that is causing a headache for university asset managers, with much stock failing to live up to student expectations – and to basic modern standards of safety and energy efficiency. Universities have an increasing number of assets no longer fit for purpose and in desperate need of investment in environmental, social and governance (ESG) upgrades and the resolution of cladding issues.

This is where a new opportunity for investors is emerging. Addressing issues with existing PBSA is crucial to improving student experiences and providing an inflation-hedged alternative to faltering new-build development. The shifts in students’ socio-economic demographics look to be with us for the long term, so focusing on improving existing affordable assets and investing in the needs of students from a wider range of backgrounds is a strong alternative to investing in new build for private capital.

This, and the mature nature of the sector, means refurbished PBSA stands to deliver robust occupancy rates, high yields and a strong return on investment.

As with any asset that has not been invested in for a long time, initial capex and proactive management are needed to ensure it is an attractive, Energy Performance Certificate-compliant and safe proposition for students. But even when improvements are costed in, financial outlays can come in at well under what new-build options would cost. In keeping costs down, rents can also be kept at a more affordable rate, which should promote a more enjoyable experience for what can be a daunting first move away from home.

PBSA is evidently in need of investment. Diminishing new-build PBSA returns must not put investors off deploying capital in the sector at a time when solutions are needed. It is the responsibility of developers and asset managers to put forward solutions that, primarily, deliver for investors, but also alleviate pressure on students and universities. These goals do not need to be mutually exclusive. The most pragmatic and cost-effective solution, and the means to achieve this, is to focus on improving existing stock.

Why ESG is everyone’s responsibility.

Yet, whilst the majority of real estate funds are firmly committed to making sure that their investments are delivering against ESG targets, many smaller firms, individual investors and family-led funds may not always be so keen, or able, to put environmental concerns and social value first.  

Away from the scrutiny of high-profile or institutional investors a clearly-defined ESG strategy might seem like an unnecessary luxury or difficult to achieve. From a regulatory perspective, there are several challenges associated with ESG best practice adoption, not least of which is simply the overwhelming number of guidelines, requirements, and their associated jargon to understand and adhere to.  Many are also put off by the way that some ESG data providers and reporting bodies assess progress, with some benchmarking smaller firms against some of the sector’s biggest players, who no doubt have significant sustainability teams and budget at their disposal.  

Evidently, there is a clear need for more education and more support. ESG can’t just be the preserve of those who are perceived to be able to afford it – we need everyone to be able to embrace it. For smaller funds and asset managers, that starts with work to embed clear ESG goals and guidance into their investment and asset management strategies, incentivising analysts and asset managers to consider investments’ environmental and social impacts, and not just occupancy rates or ROI.

It’s also vital to ensure that, in educating asset managers, you lean into the major upside benefits of adopting better ESG practices. Being overly focused on the punitive elements of relevant regulation and legislation can make ESG adoption seem like a chore. Chief amongst the benefits to champion are the green premiums associated with assets that have been developed or retrofitted to high sustainability standards. In the same way that underinvested assets can be marked down on price, struggle to attract tenants, or even become stranded, there is significant evidence to suggest that tenants and prospective buyers will pay higher rents and purchase prices, respectively, for future-proofed assets.

Developing a business culture which understands ESG as an essential bread and butter part of an asset manager’s job description, rather than a ‘nice to have’, is also imperative. The ESG agenda in property is being driven, at least in part, by the latest generation of property professionals entering the world of work. As a bottom-up priority, we need to both take advantage of their well-placed passion and help them to channel it into taking good ESG practices forward into future leadership roles. So as well as general training for colleagues, ESG-first practices should be drummed into new recruits from as early an opportunity as possible.  

With such training there can be a tendency to focus too heavily on the ‘E’ in ESG. Upskilling teams in ESG literacy must also take into consideration approaches to social responsibility and governance. At Clearbell, we take an occupier led approach, aiming to always punch above our weight when it comes to the amenities we offer relative to the size of the office. To achieve this in practical terms, what we’ve ensured is that our teams are implementing best practice processes around the measurement of tenant and local community satisfaction, as well as putting more emphasis on costs associated with placemaking when weighing up a prospective purchase. On the governance front, developing our proprietary Environmental Management System – a platform to provide all of our employees with the tools they need to embed ESG into their day-to-day – and delivery of our annual voluntary sustainability report has been strongly received by our investors and stakeholders.

For many of us, it’s clear that prioritising purpose in our investments needn’t come at the cost of profit and investor returns. However, not all investors, commentators and fund managers understand this. We need to do a better job of arguing the case for ESG and ensuring that detractors and those with knowledge blind spots understand that its purpose which increasingly drives profit and that failure to invest in ESG now will only yield more costs further down the line.

Clearbell welcomes global occupier to newly refurbished Nottingham city centre office.

Located in the heart of the city centre, the office, totalling over 14,600 sq ft across five floors, has seen its communal areas transformed with new feature walls, floor coverings, lighting and external works.

As part of the project, the c. 3,000 sq ft third floor suite was also completely refurbished to a CAT A standard and steps taken to improve energy efficiency, including the introduction of LED lighting and electric heating throughout resulting in an EPC B rating.

Dovetailing with the refurbishment, the floor has been let to Metric Search on a five-year agreement. The speciality search recruitment business, founded in New York in 2019, works across the life sciences, MedTech, infrastructure and engineering sectors from its offices across the US and UK.

Other occupiers at the property include wealth management platform, FNZ UK third-party capital advisors, and ALM.

Maid Marian Way is one of the main thoroughfares of Nottingham and is ideally located within walking distance of the central Market Square and close to all major transport routes, including the tram, bus and road access out of the city centre.

Our refurbishment project at Maid Marian Way has completely transformed the property and the experience of our customers there, which is the driving force behind our active asset management programme across our portfolio. And, it has supported us in welcoming Metric Search to the building’s community; a fast-growing and ambitious business who we have no doubt will thrive in this new space. We look forward to working with them over the coming months on this next phase of their journey.”

Rhys Jones, Asset Manager at Clearbell Capital

Although we have offices all over the world, Nottingham is our home, so we needed an office that reflected the importance of this location to us. Having the opportunity to move into a newly refurbished building, that is also in such close proximity to the city centre, meant that Maid Marian Way was an obvious choice for us. We are looking forward to moving in in the next few weeks and starting the next chapter of our journey in the city.”

Zac Flint, Finance Director at Metric Search

Clearbell Capital was supported on the refurbishment by Reynolds Associate and Interiora Projects, while FHP advised on the letting to Metric Search.

One month on: Key takeaways from our charity property conference with Withersworldwide.

Following a warm welcome from Jeremy Wakeham, CEO of Withersworldwide’s business division, we began several interesting panel discussions.

The first looked at the green agenda, where our Managing Partner Rob West featured as a panel speaker.

Currently, only a limited number of charities are required to report their environmental impact, however, as ESG regulations tighten across sectors, discussion centred around the data-driven and practical steps charities can take to get ahead of the curve.                         

A key takeaway from this discussion was that for charities with operational or investment properties, collecting and getting clued up on data about their carbon footprint is key to empowering them to make green choices.

Additionally, the panel discussed how climate risk is now increasingly becoming a financial risk which charities and endowments cannot afford to ignore. As Rob West put it, “you cannot manage what you cannot measure”. This reminder rang especially true as the panellists agreed that mandatory reporting is likely to be enforced across the sector in the near future.   

Aside from environmental responsibility, conversation also tackled the ‘S’ in ESG. As socially focused organisations with people at their core, social impact remains paramount to a charity’s work in the built environment. The panel emphasised that a harmonious relationship between a charity’s property and the people it serves remains key to its success.

The second panel of the afternoon looked at the opportunities within property investment for charities. Chaired by Clearbell’s Senior Partner Manish Chande, the discussions provided ample ground to explore, given the financial, identity and behaviour challenges that charities face in the real estate sector. 

A key point for consideration was the ethical responsibilities that charities face in property and our panellists agreed that charities should ensure the investments they make align with the purpose of the charity and interests of their beneficiaries.

This panel covered a broad range of topics, from investment in real estate, to government legislation, inflation and the communications challenges surrounding charity funding. Amongst a plethora of opinions and viewpoints, all agreed that endowments and charities can and will play a central role in the property sector going forward.  

As an experienced advisor, with a background in overseeing numerous outsourced portfolios from charities and endowments, Manish steered important discussion about the issues that can arise from these collaborations. In particular, the panel explored how these functions work to improve time and resource efficiency, while also evaluating the nuanced approach that this type of investment necessitates.

While all contended with the issues of tax rules and complex ethical considerations that arise in charity investment when compared with traditional investments, the panellists agreed that there is no one-size-fits-all approach. Each panellist’s attitude was moulded by their asset base, risk appetite and their charity’s unique priorities and circumstances.

Finally, we rounded out the day with a chat about flexible working and the future of the office. This session examined the changes to office culture in recent years, specifically how this has impacted the charity sector. By bringing together the expertise of property investors and managers, and figures from the charity sector, this conversation put charity work into the context of office property trends, pushing for more charities to undertake strategic reviews of their operational real estate. 

Manish Chande, Senior Partner at Clearbell said: “It was a privilege to take part in a day of engaging discussion, centred around charity investment and endowments in the built environment. With insight from the team at Withersworldwide and other expert industry voices, we were able to cut to the core of how we can best deliver charity development in a way that both champions sustainability whilst still ensuring strong returns.”

The future is retrofit.

Both approaches can result in the development of fantastic, design led and highly sustainable spaces, but I’ve always strongly believed that the greenest building is the one that already exists and that we’re often far too quick to go down the route of tear-down and rebuild. Upgrading older stock in most instances makes practical sense, makes business sense, and, most importantly, is the right thing to do to address the sector’s carbon footprint. However, it is important to acknowledge that there are also times when buildings are obsolete and should not be retained.  

Meeting targets depends on retrofit projects  

Retrofit is also an unavoidable necessity. Most stock that will stand in 2050 already exists today (UBS, Dec 2023), and concerningly, much of it is on track to fall well short of compliance with incoming MEES regulation changes in 2027. Indeed, over half on non-domestic real estate in London alone currently risks non-compliance (BNP Paribas, 2023). Tearing down all non-compliant stock and rebuilding is neither a practical, or cost effective option, which is why retrofit rates will have to quadruple in order to meet 2030 targets, according to Knight Frank analysis (Knight Frank, 2023 & UBS, Dec 2023). 

New buildings, evidently, cannot solve the sector’s carbon issues alone, and so failure to upgrade what we have will damage the overall sustainability performance of the commercial property space. 

We also mustn’t fail to acknowledge the reality of the current landscape. Planning authorities are increasingly coming down on the side of retrofit and are becoming more hesitant to approve the demolition of old commercial buildings. They understand that retrofit is inherently more sustainable and that repurposing the existing substructure, superstructure and façade of a building can be more cost effective.  

Though many fund managers will be put off by the high capital expenditures involved, what must be considered is the large discounts investors can demand on older, less energy efficient stock. Ultimately, we’re also seeing more and more evidence of the ‘green premium’ for assets that perform at the top end of the scale when it comes to sustainability. In London, that can be as much as a 19% boost to sale prices (UBS 2023). While capital expenditure on retrofitting projects can be significant, less efficient ‘brown’ stock trades at a discount. This can off-set much of the cost and make for an attractive yield play when compared to the outlays required for new builds. There are also other returns to be considered such as rental premiums, reduced voids, longer lease lengths and a higher chance of retaining tenants at future lease events.  

For prospective tenants, the levels of embodied carbon in a building is likely to become ever more relevant with future carbon taxation and disclosure models for businesses looking set to give more weight to embodied carbon levels. This will increase the appeal of retrofitted assets. With that, we’re expecting to see businesses being prepared to pay a rental premium for buildings that use less embodied carbon. 

Championing sustainable refurbishment 

The urge to champion exciting, statement new builds is understandable. New builds can be more marketable, and many prospective occupiers will be drawn to newness, as well as an opportunity to truly put their own stamp on a space that no one else has let before.  They also may benefit from reduced ongoing carbon consumption in operation due to optimal design efficiencies.  

In not challenging this – sometimes – blind preference for newness, however, we risk underplaying the potential of retrofitted assets. This is why it’s so important for us to upsell the, arguably, more worthy achievements of retrofitted buildings to those who may be less familiar with their benefits – including our clients, investors, planners and policymakers.  

I accept that this can be difficult when new build assets are just as likely to include all the latest sustainability features that a retrofitted asset would. Although, where retrofitted assets will always outperform new ones though is when it comes down to embodied carbon. When a building is constructed, carbon is embodied in its structure and façade. Retrofits work to keep as much of an existing structure as possible and so ensure that the developer can preserve significant levels of embodied carbon within the building. 

Take, for instance, what we have been able to achieve with the recent refurbishment of Grade II listed Kodak Building in Holborn. Once the historic European HQ of Kodak, the building now boasts 70,000 sq ft of contemporary office space with abundant tenant amenity. Knowing that many new tenants tend to alter or entirely rip out newly installed M&E, we only finished five of eight floors to shell & floor, without M&E installation. This approach also cuts down on wastage, cost, time and embodied carbon from use of unnecessary services.   

The upfront embodied carbon used in the Kodak retrofit was equivalent to the LETI 2030 Design Target which is relatively low even from a retrofit perspective. It also used considerably less embodied carbon compared to the Greater London Authority and RIBA benchmarks.  

Ensuring measurable progress 

In making a compelling case to both prospective occupiers and fellow industry stakeholders that retrofitted space can deliver the sustainability credentials that they’re looking for, we can’t rely solely on their favourable embodied carbon performance. We also have to demonstrate that such projects deliver what new buildings now deliver as standard.  

Assessing the environmental and social impacts of operations is a vital element of doing business in 2024. Alongside other factors like their employer brand or business need, a building’s green credentials are an important factor in a business’ decision to take on new office space. On this front, the adage that newer means better is often deep-rooted within prospective clients. But the fact remains that – from a sustainability monitoring perspective – there is very little that can be achieved with a new build that can’t be in a retrofitted space.  

It’s on asset managers to educate tenants about this, and to actively demonstrate how retrofitted buildings can be brought in-line with their expectations of newer buildings. This means asset managers should be working to develop spaces that come with smart technologies such as remote energy usage monitoring and power usage reduction as standard. These inclusions in a development can go a long way to helping prospective tenants to understand how their new office will support their own ESG goals. 

Ultimately the number of companies whose customers, shareholders and employees demand robust net-zero commitments of is increasing at a faster rate than the supply of green buildings (JLL). Building new is just one avenue that we can pursue, and it surely won’t fill the deficit on its own. So, it’s becoming more important than ever to first consider how existing stock can be upgraded before tearing down and starting afresh. Underutilising a retrofit-first approach, or not considering it as a vital part of a more holistic strategy to reach net zero, will result in a major failing on the part of the sector to deliver more sustainable options for clients and investors.