London developers kick off record green office refurbishments

DEVELOPERS in London started work on a record number of office refurbishments in the six months through March, as they bet on rising demand for spaces with top environmental credentials.

During the period, about 37 new projects were started to overhaul existing office buildings spanning 3.2 million square feet, according to a survey conducted by Deloitte. That’s the most since the consultancy began collecting the data in 2005.

Demand for first-rate green premises is outstripping supply after years of anemic construction, aided by a push from large corporations seeking to meet environmental targets and lure staff back. That’s encouraging more developers to commence projects even as the overall demand for space is being crimped by hybrid working.

The makeover follows lobbying by activists against old buildings giving way to new construction, because that involves high carbon emissions linked to key materials including concrete and steel. Instead developers favour refurbishments where some materials can be re-used, reducing the so-called embodied carbon of building projects.

Rules dictating that office buildings must meet minimum efficiency standards are also being phased in, encouraging landlords to upgrade their buildings.

There’s a “race to avoid obsolescence” among developers who fear their properties will become stranded assets, Deloitte real assets advisory director Sophie Allan said.

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Commencement of new projects jumped 80 per cent from the previous six-month period, Deloitte’s data show. The total area of space currently being built now stands at 4.4 million square feet. BLOOMBERG