Office buildings with low energy ratings face obsolescence unless owners can find a way of viably improving their energy efficiency, the Society of Chartered Surveyors Ireland (SCSI) has said.
In The Real Cost of Retrofitting Offices Report 2025, published on Monday, the SCSI says that retrofitting older buildings can deliver substantial returns in terms of higher rents and valuations.
However, in four out of seven case studies of offices in the Dublin area carried out as part of the research, the cost of retrofitting was seen to be greater than any uplift in financial benefit.
The report, which the institute says is the first study on retrofitting office buildings, aims to improve understanding of the challenges associated with retrofitting commercial offices, “which is vital for understanding the path to decarbonise commercial building stock by 2050, in line with evolving EU legislation”.
A study last year by the Central Statistics Office (CSO) found that a majority (59 per cent) of the 18,000 office buildings examined had a building energy rating (BER) of D or lower.
Just 2 per cent were found to have a top A rating, with 10 per cent rated between B1 and B3, and the balance of 29 per cent classified as C.
[ BER: How many A-rated energy efficient homes are in your area?Opens in new window ]
“Unless owners of poor performing commercial buildings with low BER ratings can find a route to retrofitting, they face the risk of their assets becoming stranded and unoccupiable,” said co-author Sarah Garry, a chartered valuation surveyor.
“On the other hand, by retrofitting the property, they can improve income level from the asset – in some cases the increase in rental income ranged between 40 per cent to 66 per cent – increase its capital value and secure its future.”
She noted that upgrades to lighting, heating and ventilation often represented the most significant cost component in retrofit projects – from 21 per cent to 76 per cent in the projects examined in the research.
Retrofit costs in the seven case studies of buildings ranging in age from 20 to 60 years old ranged from €225 per square metre to €1,814 per square metre. Two of the four blocks failing to pass the viability assessment had cost per square metre below that of one of the successful projects.
The report makes a series of recommendations, most notably that grant funding should focus more on improving the fabric of buildings than on energy efficiency.
“The feedback from chartered building surveyors is that a more holistic approach to retrofitting is required so that the ‘fabric first’ principle is the priority. Many buildings, if appropriately thermally efficient in their retrofit, can enjoy decades of low energy demands compared to a 15-year lifespan of most heat pumps and other similar plant and equipment installations, for example,” it says.
Mary Whitelaw, chief strategy and sustainability officer at AIB, which supported the research, said it would facilitate a more proactive approach to retrofitting office buildings.
“The UN has estimated that nearly 40 per cent of global carbon dioxide emissions come from real estate. Retrofitting existing buildings reduces the whole life carbon of a structure by not adding to the carbon already embodied in them,” she said.
“Data-based analysis of the costs involved in undertaking retrofitting work is a critical enabler of action in this space.”
The study focuses on the direct, or hard, construction costs. These include items such as the partial demolition of existing structures, structural repairs, upgrades to the building’s walls and roofs, internal finishes, and the installation and upgrading of mechanical and electrical services such as lighting, heating and ventilation.
It measured viability or otherwise by subtracting the retrofit costs from the difference between the office blocks pre- and post-retrofit value and dividing that by the future estimated valuation.
The research ignored soft costs including site acquisition, contingency funds, professional fees, cost of finance, local authority fees and VAT. It also assumed vacant possession which would be seen a lowering valuations and ignored SEAI grants that might be available which would defray the cost.
As a result, and also given how the results of its case studies show how outcomes will be determined by the specific characteristics of a particular building, the SCSI report says each intending project would require specific assessment by specialists.
