Managed space leads green revolution
Copyright: David Lawson
Published in Property Week October 2008
The perfect storm of converging environmental and economic forces will leave a trail of destruction that could take years to repair. Managed space faces an immediate problem absorbing energy costs into all-in fees at a time when beleaguered tenants are pressing for cuts.
Yet a modest office development on the outskirts of Leeds already caught by the first winds of international financial crisis is proving that survival is possible. The Icon Business Centre was designed from the outset for a future when energy bills would rate almost as highly as rents, and opened last year to fanfares over the highest score ever awarded by the Building Research Establishment rating scheme [BREEAM].
Awards have continued, including one from the British Council for Offices earlier this month as the best corporate development in the North for 2008. But while environmental demands were anticipated, no-one could have foreseen economic storms whipping up even further north. Developer Innovate Office was part of a distribution firm bought by Icelandic group Eimskip and was among the first to suffer when the company faced problems. Innovate went into administration in the summer but the business centre remains open under a new name, along with its twin centre in Nottingham, and held up as a model for sustainable development.
Two key factors should not be overlooked, however. The BCO award was not for the scheme’s green credentials but its qualities as a pleasant and efficient workplace. Environmental issues are still not top of tenants’ priorities: in fact, they are slipping as economic troubles worsen, and green development is pointless if it does not attract occupiers.
The other important element is that the project was designed to institutional standards. Green designs are still in the minority because investors are not convinced that the extra development cost make them economic. The project team, including Mirus Management Services and Rio Architects, claim this is the UK’s first commercially developed sustainable building.
The 46,000 sq ft scheme avoided what the designers dismiss as ‘green bling’ – bolt-ons such as photo-voltaics and wind turbines which are often used to ‘badge’ so-called sustainable buildings but are inefficient and expensive. Some ground-breaking techniques were included such as rainwater harvesting for flush toilets linked to vacuum drainage, which is expected to cut sewage generation by 75%. Other innovations include natural ventilation powered by a combined heat and power generator which blows air through hollow floors.
But the soul of the scheme is a concrete frame which stores heat in winter and cools occupants in summer. That might seem mundane but it took two years of computer simulation and testing in the US to create a building that reduced running costs without compromising efficiency. The end result is two elegant blocks connected via a glazed ‘street’ which cost only 25% of the amount to run a similar conventional building and create 21% of the CO2. Savings of £1.30 a sq ft are predicted on space valued at rents of £12-15 a sq ft.
The expense of a prototype was bound to prevent creation of institutional standards at a cost acceptable to investors but development agency Yorkshire Forward covered the difference in costs. Now the techniques are proven, the project team believes future projects should meet market scrutiny.
Power costs have traditionally been used to bait tenants, as managed space operators buy cheaply in bulk and pass on savings. But as contracts expire they face a dilemma over absorbing higher costs or raising rents just when the economy is faltering. Many are working with occupiers to cut bills, bringing in experts to improve energy efficiency, but simple changes can often bring big savings.
Evans Easyspace: Building to high BREEAM standards and improving the carbon footprint on existing centres. MD Tom Stokes has warned the sector in his role as chairman of the Business Centres Association that introduction of energy performance certificates could see centres with low scores face lower rents and values.
Business Environment Group: Saved £45,000/year on its free tea and coffee service by switching from paper cups to washable ones. Altering computer controls on air-conditioning to switch off half an hour earlier cut costs by 5%.
MWBEX: Saved £100,000 in the first year of a campaign persuading tenants and cleaners to turn off lights.
Avanta: Inspecting all its property after seeing power costs double to £2.50/sq ft since the Nineties.
Bizspace: Switching from gas to night storage heaters and educating tenants to turn off lights.