Retrofit is essential if we are to meet the 2050 targets of the Climate Change Act, improve the living – and working - conditions for the majority, and create buildings which are appropriate for changing technology and needs in the 21st century. Retrofit is a response that brings order and a methodology to otherwise ad hoc refurbishment and upgrades to buildings, which often require previously installed improvements to be stripped out to take the “next improvement step”.

In very simple terms Retrofit (as opposed to more cosmetic refurbishment) is a series of planned interventions leading to a significantly better performing building, in energy & carbon terms. The ultimate aim is to achieve a Net-Zero Carbon Building (NZCB), either through a deep retrofit that implements significant changes at once or, through a more incremental series of planned and quantified step changes. This is the crux of the difference between retrofit and refurbishment – where the latter, which perhaps due to Consequential Improvement or BREEAM, might involve ad hoc improvement to elements of the building versus the longer term, planned and far-reaching objective of the former i.e. a NZCB.

Given the poor performance of much of the UK’s commercial building stock there is clearly a lot to be done to improve the situation. However, it is also important not to lose sight of the fact that any upgrade needs to be commercially viable, in simple terms, commercial buildings need to pay their own way.
So, one might ask, why not just carry on as we are? After all, the mandatory hurdles that must currently be satisfied for office buildings to be let, still only sit at EPC level E, and they are still being let.

There are a few considerations here:

• Stranded assets…and end user expectation
  Higher sustainability expectations from tenants (often driven by in-house Corporate ESG goals) will ultimately result in an increasing number of commercial properties not meeting the grade and as such, become un-lettable. There is a caveat here, after all as we have seen with corporate EDI objectives, these Corporate Goals can be subject to changing political winds and may, in a reactionary sense, be seen in some quarters as “Woke-ism” and a negative. Despite these influences, the common sense trajectory is towards higher performance buildings.

• National Statutory Environment
  Significantly, the UK is legally bound by the Climate Change Act of 2008 to achieve Net-Zero Greenhouse Gas emissions (GHG) by 2050, with buildings forming a substantial part of the current emission profile. We should expect – as we have already seen – ever tightening legislation on building emissions. Reflecting this the Minimum Energy Efficiency Standard (MEES) regulations will require an EPC of C by 2028, moving to EPC B by 2030. However, EPCs as we know them today are a long, long way off a NZCB, this said EPC’s and the SAP process underpinning them are evolving rapidly in the direction of becoming more onerous.

• Local Regulation
  We already see Westminster Council pioneering a “Retrofit First” policy, which requires any other approach than Retrofit to be extensively justified – and yes, this is Westminster, with its own unique commercial imperatives, however it is likely that other Councils will follow their lead. It is noteworthy that already we see, through the likes of London Property Alliance, influential groups making the case that heavy handed application of such policies could do more harm than good (see their Retrofit First, Not Retrofit Only” document) – clearly the debate is set to intensify.

With 80% of 2050’s building stock already in existence and around 74% of office buildings in Westminster and the City of London alone requiring upgrading before 2030 (See link to London Property Alliance below), one might argue that morally, a huge step change is essential now.  Of course, the counter argument will be - where is the incentive if developers lose all their tenants and make their properties unaffordable?

Mindful of this, it is clear that evolving legislative requirements are going to be the primary driver behind the uptake of Retrofit, and to date the principle of Retrofit has garnered sufficient cross-party support to gather momentum.  This may change however as the financial cost of higher standards impact landlords.

As such, we expect a more nuanced approach to Retrofit to come to the fore, i.e. the requirement for more modest incremental changes which, whilst not paradigm shifts in themselves, are part of a considered Retrofit Plan (rather than simply a refurbishment).  This will allow higher standards to be met as they are required in the future without defeating ourselves in the process  
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The key is to have the PLAN!
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Take aways:

• Retrofit = Zero-Carbon Plan in place,
• Putting a Retrofit plan in place, makes financial / commercial sense,
• It doesn’t all need to be done immediately, no magic wands required,
• Plan it… you don’t want to undo what you’ve just done to do the next step!

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Useful links to others:
UK commercial property retrofit rate needs to quadruple to meet proposed regulation
Retrofit First, Not Retrofit Only: A focus on the retrofit and redevelopment of 20th century buildings - London Property Alliance
New policy to make Westminster a 'retrofit first' city | Westminster City Council

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