Recently there has been a steady stream of articles in both the national and specialist press, both here and abroad, concerning the emergence of a two-tier office letting market. They suggest that older office buildings with poor energy ratings will become increasingly difficult to let. In addition it is argued that the “rental performance” of new office buildings is beginning to pull away and that the gap between new and older office stock is increasing. The impetus for this is stated as companies looking at their ESG (Environmental, Social, Governance) obligations and the related performance of their offices.
The narrative is puzzling. Firstly because older office buildings have always lagged new buildings and hence have been upgraded, usually against a 15-20-year rental cycle when they re-establish not only their rental but also their environmental credentials. Secondly there is an implication that older office buildings are somehow immutable, incapable of being brought up to modern energy standards or that it is not worth doing so. The facts are different. The upgrading of office buildings is simple using standard construction products and systems and there are many commercially successful examples around Dublin. There are of course headwinds here as elsewhere. These include the rising cost of materials, the scarcity of skilled labour and the increased cost of capital, but this is no worse a challenge than is being faced across all sectors.
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In the past few years, my own practice has undertaken deep retrofits of a number of late 1970s offices. Their locations varied from the Central Business District (CBD) to inner and outer suburban areas. All were upgraded on a cost-optimal basis. Most were brought to an A3 Ber rating with upgrade works including standard items such as wall insulation, new windows, and new mechanical and electrical systems. The buildings were let to tenants across a wide spectrum, including publicly listed companies, professional service firms and semi-State bodies. In all cases the renovation period was considerably shorter than for a new build. In all cases the payback on the deep retrofit was justified by the increased rent available.
Current examples reported on in the media include Iput’s refurbishment of a large part of its George’s Quay site where they will achieve an A3 Ber rating while on the other side of the Liffey, Irish Life has recently announced the refurbishment of the main block at its Abbey Street Campus, to be a nearly zero energy building (nZEB). In both of these cases, additional lettable space will be achieved, which will improve the development appraisal.
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Most older offices, if not all, were built with a relatively narrow 12-13.5m plan, which as well as providing great natural light also lends itself to sustainable naturally ventilated solutions
Older offices have a number of features that can potentially be exploited to the future occupant’s benefit. These buildings were originally designed with very small lobbies, toilets and receptions so that even doubling the size of these elements to match contemporary offices maintains the same relative level of lettable space as new builds. Older offices too tend to have large car parks with the possibility of repurposing to gyms, showers, lockers and the like and in some cases creating additional lettable area.
The form of these buildings can be an advantage too. Most, if not all, were built with a relatively narrow 12-13.5m plan, which as well as providing great natural light also lends itself to sustainable naturally ventilated solutions. And while in the past the lower floor-to-floor height of these buildings was an issue when raised floors were introduced, the omission of suspended ceilings in many new fitouts means this is no longer an insurmountable problem.
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Companies and their boards mindful of their EGS responsibilities should be careful of making decisions based only, for instance, on Building Energy Ratings (Ber). “Whole-life carbon” of a building, a more difficult metric to measure and indeed to find, is what needs to be considered. Incorporating not only the energy used in operating the building but also the carbon used in construction – embodied carbon – it is often not a sufficient part of the energy certifications offered. A newly built speculative office building in London is reckoned to have 35 per cent of its “whole-life carbon” in embodied carbon – in other words, on the day it opens. With these figures in mind, it is easy to make the case for retrofitted buildings. Suggesting, as one recent article did, that only new buildings are “ESG-compliant” is a nonsense.
The principal advantage of older offices is simple: they are already there. In the UK, the long-established Architects Journal is running a campaign to prioritise retrofit over demolition called RetroFirst. It’s strapline is “The greenest building is the one that already exists”.
In summary, older offices buildings can be upgraded in a cost-effective manner to modern environmental standards, offer significant advantages in relation to embodied carbon over new builds and can be designed to be first-class, light-filled, energy-efficient buildings promoting both occupant health and productivity.
John Mitchell is a founder of DMOD Architects and lead consultant of Office Metrics, consultants on the selection and use of office property assets
