If you want a new building but don’t want to contend with planning permission and delays, consider refurbishment. It’s quick, low risk, cheaper and loads greener
After a decade or more of starchitects producing wibbly wobbly icon towers for a hot market, is refurbishment the way forward as we emerge from recession?
Refurb certainly has a lot going for it, particularly in London where there’s a supply gap looming. The credit crunch crunched so fast that developers did an emergency stop, canning their schemes overnight. Yet unlike 1990, when there were 3.1 million m2 of
empty stock on the London market creating a six-year over-supply, this time there was only about 400,000m2 of empty stock with a modest completion pipeline. This has been eaten up as the banks have bounced back.
So there is a gap in the London market that new build cannot fill, unless it is “shovel ready”. Old schemes with planning permission are being dusted off all over town. But a lot of these schemes are for towers with small floor plates that big businesses don’t want. Towers need big rents and strong tenant covenants to support their costs and there are only so many small companies that fit that profile. Most of them, typically branches of US law firms, are already in the Gherkin. Even for sensible schemes, building costs make big
new-build schemes difficult in this market.
Refurbishment is quick to market, can meet a realistic price point and is also low risk. If you were a landlord with a tenanted building coming to the end of a lease, you would die rather than lose the tenant and would bend over backward to find a way to keep them and refurbish their building. But can it provide the right type of space? After all, the reason people build new buildings is because the old ones don’t work any more. That was certainly true 25 years ago. The option of refurbishing an office building to try to get grade-A space just did not exist. Offices coming to the end of their 25-year leases were designed in the sixties and had poor floor plates and inadequate floor-to-floor heights for the sort of gas-guzzling air conditioning systems that we needed to accommodate power-hungry PCs. That’s not true now. A typical office coming to the end of its first major lease period will have been designed in the eighties with perfectly good floor plates, floor-to-floor heights and service voids. It will just have clapped out services and may need a new skin. Often incremental improvements will be possible - like altering atriums or improving entrance arrangements - like at the old NatWest Tower in the City. With our green hats on, too, refurbishing buildings has a lot going for it because of their embedded carbon, and envelopes and M&E systems can be radically improved.
As ever, there are exceptions. Make has applied for permission at Broadgate, in the City, to demolish what might look like two perfectly good eighties groundscrapers to replace them with a new building for the Swiss banking giant UBS. Well, this is the exception that might just prove the rule. It’s a mega groundscraper, which found itself in the uncomfortable situation of occupying an air-rights building over a railway station from which they would be evacuated every time there was a bomb scare. They simply needed a sensible building to work in. But it’s not without huge controversy, despite the fact that the demolished buildings are neither in a conservation area nor listed - yet. Big guns like Stuart Lipton, who built the original buildings, are hopping mad and would stop the scheme if they could.
Derwent’s new building in Islington is a great example of a good refurb. Designed by AHMM, its smart new Miesian skin and its total internal makeover give it grade-A kerb appeal and it has a decent floor plate to match. My own office’s client, Linklaters, has chosen to go down the refurb-in-situ route - it likes its location, it likes its building, and the landlord (I’m sure) gave it a great deal to stay. We’ve just finished the first tranche of work, programming avoided the pain and it is very happy with its decision.
So, dust off your survey skills: refurbishment is the new new build.
Jack Pringle is a partner in Pringle Brandon