‘Healthy pipeline’ of green retrofits expected as London catches up
The number of new developments may be falling, but the need for sustainable workplaces will help fill the gap, new research has predicted.
Alongside the recent Deloitte Crane Survey, which showed a fall in new builds but a rise in radical refurbishments, the latest government figures show that the number of new office development projects in England fell by 15% between 2021 and 2022, from 434 to 367.
But according to research by international law firm RPC, this will not mean a fall in the amount of construction.
The number of new developments may be falling, but the need for sustainable workplaces will help fill the gap, new research has predicted.
Alongside the recent Deloitte Crane Survey, which showed a fall in new builds but a rise in radical refurbishments, the latest government figures show that the number of new office development projects in England fell by 15% between 2021 and 2022, from 434 to 367.
But according to research by international law firm RPC, this will not mean a fall in the amount of construction.
Jon Ely, partner in the real estate and construction team at RPC, said: “For some time the office market has been working at two speeds, with the capital value of green office space, their rents and demand performing far better than the rest of the market.”
It said a significant shortfall in “green office” stock in the UK will prompt a fresh wave of retrofitting as developers race to meet demand.
“Despite the slowdown in new developments, there is high demand for green office space, especially from larger organisations who will have ESG obligations to meet the 2050 net zero target,” Ely said.
In London alone, less than 15% of the 109,770 offices are certified as green, meaning that around 93,305 offices in the capital are awaiting renovation or redevelopment to become more sustainable.
Across the UK, 87% of office stock has an EPC rating of C or below, and more than 1bn sq ft of UK office space is below the B rating, which is the proposed minimum standard by 2030.
London pales in comparison to other major international cities. In New York and San Francisco, 40% of offices are classed as green. The average of 20 global cities examined in a recent Savills report was higher than London’s percentage, at 22%.
Ely said: “London is behind the curve compared to other major global cities, so we expect to see a healthy pipeline of new developments over the next two decades.”
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