Retrofit: Repurpose, Refurbish, Reimagine
- Katie Wray
- Mar 17
- 6 min read
Key takeaways of retrofitting
The scale of the built environment’s contribution to addressing the climate crisis cannot be underestimated. There are almost 30 million buildings in the UK[1] and approximately 40% of the UK’s greenhouse gas emissions come from buildings and the construction industry[2].
As we in the industry know, buildings are not a choice; people need homes, companies need places to work, we need hospitals, schools, shops and so on. However, how we choose to use and occupy buildings is increasingly in the spotlight, particularly in how companies can reduce their carbon emissions, meet their net zero goals and address fuel poverty. Carbon emissions associated with buildings has therefore increasingly become a public and political issue and it is influencing investment decisions, project funding, and where people choose to live and work. In some ways, it is refreshing that those outside of the professional built environment sphere are seriously engaging with this, but it also brings additional technical challenges.
A shift in why we retrofit
The retention and reuse of buildings isn’t new. When done successfully buildings are not only occupied but transformed into something more desirable, helping to secure their long-term future. For example, the ongoing regeneration of Grade II* Park Hill, or the Vacant Commercial Units Fund set up by Wiltshire Council funded by the UK Government.
Historically buildings are retained either due to cost, risk, or a heritage designation e.g. a listed building. The retrofit and retention of these buildings often previously focused on cost saving and conserving heritage.
More recently, the focus is widening and the carbon emission benefit of retention is also being understood. Retrofit can improve running costs, occupier comfort and well-being, and be more resilient to changes in energy prices. All these features make existing buildings more appealing to potential occupiers or investors.
Navigating the Challenges
Reusing and retrofitting existing buildings is not without its challenges, which must be acknowledged and navigated through the life of any project.
Money Matters
Retrofitting can be an expensive process, and the costs can vary significantly depending on the scope and complexity of the retrofit. In some instances, the cost of retrofitting can outweigh the potential energy savings, making it difficult to achieve a positive return on investment. These challenges include:
Potentially higher labour costs with more specialist skills required.
VAT is currently charged at the standard rate of 20% on most retrofitting works – by contrast, new builds are zero-rated for VAT.
Cost variance associated with age and type of the building, especially for historic buildings, which may require a bespoke solution, e.g. repair or refurbishment of windows or where a greater contingency is required for unexpected discoveries during constructions. Detailed surveys and intrusive investigations can help to derisk this, if budget allows.
Upfront capital may be required which not everyone has access to. Traditional financing options (e.g. BTR investment funds) may also not be available or suitable for the project if it is delivering a more unique or bespoke product.
It can be challenging to understand what the most cost effective and beneficial measures are for the building, especially for historic commercial buildings, where they are often unique, not only in their form of architecture, but also in their form of constructions, making baseline assumptions and comparables harder.
These challenges can all be mitigated through undertaking an early and robust technical due diligence and seeking the advice of project managers, development managers and quantity surveyors that have experience of working with existing buildings, ideally of a similar typology.
It isn’t black and white
Measuring and understanding the carbon savings and sustainability credentials can be difficult to navigate. There are multiple tools and way of measuring buildings, each with different nuances or methods – be it EPCs[i], NABERS[ii], Building Regulations Part L[iii], ACEB[iv], BREEAM[v], Passivhaus[vi], or the WELL standard[vii]. This results in a confusing set of choices and a reduced ability to directly compare one building with another. However, as more literature is available and more schemes come forward it is likely that a preferred measuring system will emerge, likely dictated by investors preferences.
The industry is already coming together to try and set one standard – the UK Net Zero Carbon Buildings Standard. This is the result of extensive collaboration between many industry experts, but also key bodies such as the Institution of Structural Engineers; RIBA; RICS; and UKGBC to name a few.[viii] At the beginning of a retrofit project it is therefore important to obtain specialist technical and market advice to select the most appropriate tool / standard that is aligned to your project vision and KPIs, as well as what your existing or future investors or occupiers may require.
Embracing the Opportunities
In devising an approach to retrofit local authorities can consider various key opportunities to leverage.
Act as a Catalyst for Regeneration
Re-imagining characterful buildings either as meanwhile uses or permanently can act as a catalyst for regeneration. For example, the retention of an historic train depot and repurposing it for meanwhile cultural and food and beverage uses, at the Mayfield regeneration site in Manchester has successfully helped to create a destination and support the activity and animation of a new park ahead of further new build development coming forward.
New Build vs Retrofit
Retrofitting can bring homes and workspaces to market more quickly than new build, as well as offering a different and sometimes more characterful place and product. Additionally, there is a finite amount of brownfield land. In this regard, there is significant opportunity with existing buildings, and potentially lower barriers to entry to the market. Local authorities could have proactive guidance and initiatives to identify and support retrofit opportunities across their local authority area, potentially aligned with funding streams.
Data Talks
Tangible evidence to support decision making on a retrofit project is essential. Smart technology such as building energy management systems, thermal imaging, and portable data loggers can gather the necessary data. The information gathered can help to inform decisions to retrofit or where investment will be most impactful. These are of particular benefit in multi-tenanted buildings and identifying more localised opportunities for improvements. It is therefore useful to build this requirement into your brief when you start a project to enable long-term monitoring of the building post-completion.
Collaboration and Learning
Whilst retrofit may not be ‘new’, it certainly is becoming more prevalent. It is increasingly being undertaken for more modern buildings which no longer meets minimum energy efficiency standards or have high running costs. Therefore, it is a continuous learning process and with more best practice examples required to inspire, as well as troubleshoot issues.
Bodies such as Historic England have published guidance specifically to help address retrofit and common interventions to improve energy efficiency for listed buildings. Other recent guidance include Heritage Works for Housing which focuses on retrofitting historic buildings for new homes. This aim is to help guide local authorities and conservation officers, and therefore help provide more consistency in the decision-making process.
Flexible Funding Programmes
It is important for all those involved to understand what stipulations may be in place around funding programmes, and tailor the delivery programme accordingly. At the Science and Industry Museum in Manchester, the local authority agreed a flexible approach to the scope and programme for the listed building consents required that responded to the funding arrangements and delivery on site. This resulted in the project being broken down into a series of planning and listed building consents that allowed the contractor to get on site earlier and drawdown on the grant funding in accordance with the timescales set.
Key Takeaways
Retrofit is a critical opportunity to enhance and celebrate the character of a town, while supporting climate action. Retrofit projects can be complex, but a growing community of specialists are increasingly able to help navigate the process. Our top 3 takeaways are:
Projects should be frontloaded as far as possible through undertaking an early and robust technical due diligence and design period.
The delivery programme should be realistic and flexible and cognisant of the funding strategy.
Collaboration and partnership with key stakeholders across the public and private sector can make the difference between an underwhelming and difficult project and an outstanding one.
Katie Wray is a Director in Deloitte’s Real Estate team. She works on major urban regeneration projects and leads Deloitte’s heritage team working a range of scales and types of heritage. She is based in Manchester and sits on Historic England’s Historic Places Panel.
Frances Hampson is an Assistant Director in Deloitte’s Real Estate team. She works on a large-scale regeneration projects across the UK and advises clients on navigating the retrofitting process across their estates, including on listed buildings and non-designated heritage assets.
If you have any questions on this topic, or would like support, please contact your Delivery Associate, or email DeliveryAssociatesNetwork@Arup.com
Links to useful information:
[2] Net Zero: The UK's contribution to stopping global warming" published by the UK Committee on Climate Change (CCC) in May 2019
[iii] Conservation of fuel and power: Approved Document L - GOV.UK
[iv] The AECB is the home of low energy, sustainable building
