Time for a revamp

The commercial interior refurbishment and fit-out sector was worth around £7bn in 2009 – a drop of more than £1bn on 2008, according to AMA Research. AMA forecasts that, before witnessing a drop in 2010-2011, the sector will rise steadily over the next four years.

It could be argued that a return to growth will occur earlier than this. With crippling financial restraints still prevalent for many, staying put and refreshing those same four walls is the best option. Added to this, there is the pressing need to ensure buildings are energy efficient, with more regulation and – interestingly – more expectations imposed on property owners and occupiers alike.

Thus, one of the biggest challenges for property specialists is implementing sustainable features while staying within tight budgets. These are two objectives at odds with each other, not least in the refurbishment and fit-out sector.

Adrian Trent, associate director and project manager at Jones Lang LaSalle (JLL), argues there are ways around this: “Gone are the days when you’d get a client specifying rich woods from Borneo. But by using some good stains and treatments you can get some very good effects. For example, we’re working on an InterContinental hotel in Westminster. The client wanted solid walnut; we used MDF stained and treated to look like walnut. The client is pleased because it saved on cost.”

Reasons to be green
It is estimated that 70 percent of existing buildings will be in use by 2050. Considering the UK’s binding target of 80 percent below 1990s levels, this means it is crucial we get the energy efficiency and performance of our existing property stock right.

However, it seems that we are not nearly doing enough to achieve this aim, discouraged by, among other reasons, the lack of upfront cash and financial incentive to do so. The Better Buildings Partnership (BBP) is a collaboration of London’s largest commercial and public property owners. Last year, it produced a report entitled: ‘Low-Carbon Retrofit Toolkit: A Roadmap to Success’. It points out that, despite clear benefits for owners and occupiers, low-carbon retrofit is not being taken up widely enough to have a significant impact on reducing the carbon emissions of commercial buildings. The Toolkit identifies barriers to sustainable retrofit and finds ways to address them. “We can no longer afford to wait for the traditional cycle of refurbishment and new development,” says the BBP.

One of the key barriers is the difficulty in making a compelling business case for sustainable retrofit, to both owners and occupiers, particularly given the complexity of some of the issues within refurbishing a building. Another barrier is the lack of regulation and incentives to upgrade existing building stock to sustainable standards.

However, there is a tool on the market that could help overcome these obstacles. The Royal Institution of Chartered Surveyors (RICS) has developed the Ska Rating, an industry-led assessment method for interior fit-outs. While it is currently aimed at the office market, the RICS says there is no reason why it couldn’t be rolled out to other property sectors in the near future.

Ska is an online tool that rates the environmental performance of fit-out projects, which has already won awards since its official launch in November 2009. Essentially, it offers good-practice guidance to achieve the best environmental outcome, and can be used as a benchmarking tool to compare performance. Guidance is offered on more than 99 measures across: Energy & CO2, waste, water, pollution, transport, materials and wellbeing. For example, when wooden flooring is stripped out it should be sent for re-use to a salvage yard instead of to landfill. ‘Credits’ can be scored according to how successfully a project meets the criteria.

Tim Robinson, RICS director of information products group, explains: “Ska provides a good incentive – users can influence and be informed [of good practice]. Energy consumption of existing non-domestic buildings is around 18 percent of overall consumption. Although fit-out is a small part of the overall building, there is enormous scope for organisations to do better. Therefore, on the basis that this tool is widely used and organisations take the guidance on board, I think it will have a huge impact on energy consumption in the UK”.

Ska only assesses the scope of the fit-out, not the whole building, but it can be used in Cat A refurbishments alongside other assessment tools such as BREEAM and LEED. Although Ska is concerned with environmental impact, it could also be seen as helping to add value to a building in terms of its green credentials. What’s more, it’s free, unless you opt for professional certification, which bears a cost (of between £3,000 and £7,000).

In multi-tenanted buildings, the base building may not be particularly environmentally efficient, so tenants may find it difficult to achieve all the credits available, however it depends much on what within the building is being changed. In any case, Ska will soon introduce a third stage (the first two being design and delivery). A post-occupancy assessment will measure the performance of the fit-out in use − typically one year on.  A display certificate will be issued at this point to help inform and encourage continued good practice.

Maximising value
Jones Lang LaSalle (JLL) worked on the refurbishment of Le Meridien Piccadilly last year − a project tight on time with a fixed budget. The client, Starwood Capital Group Europe, wanted to maximise value in order to sell its share of the hotel. JLL actually managed to save the client money along the way, so Starwood expanded the scope of work mid-project.

Adrian Trent, who specialises in the hotel sector, worked on the project. He explains that having the expertise of a large company like JLL behind you helps: “Cost savings are very much down to how savvy [companies] are in the marketplace. The work we undertook without doubt increased the value of the asset and improved its saleability.” Le Meridien sold within weeks of the works being completed for £64m − an outcome the client was hugely pleased with.

And, although sustainability was not central to the client’s brief, JLL managed to squeeze in some subtle green features, by using LED light fittings, and improving the thermal performance of windows by simply fitting seals to them – measures that will reduce overall running costs.

Bridging economic and environmental concerns
Colliers International managed and implemented the refurbishment of the Creative Arts and Media Studios at Tower Hamlets College’s, with a big focus on both green efficiency and cost savings. The College, based in East London, had originally considered a larger-scale redevelopment of this part of the building and wanted to completely renovate its existing facilities. However due to pre-existing economic constraints, this was not possible.

Colliers’ Building Consultancy department evaluated the original development plan and established where economies could be made to bring it within the revised budget.

Bernice Maher, associate director at Colliers International, explains: “We are often brought into projects such as these to bring costs down by looking for smarter methods and materials, yet keeping the work to a high standard. For example, at Tower Hamlets College, we opted against installing air-conditioning units in the media studios. The studios have really impressive floor-to-ceiling heights and good-sized windows, so we overhauled the timber casement windows, thereby improving the building’s ventilation.

“Also in some areas of the building we chose to utilise and refurbish existing materials rather than replacing them – meaning further significant cost-cutting. For example, we restored the original parquet flooring in some places, as well as many of the light fittings. Refurbishing these features instead of ripping them out and starting again reduced costs substantially”.