Debate over achieving EPC rating B by 2030 might be heating up quicker than the global temperatures the law is supposed to tackle, but that’s not the only challenge facing the office market.
According to a recent TravelPerk survey, 40% of UK employers now offer hybrid working as a result of the COVID pandemic, meaning demand for large scale office space has reduced.
In fact, the Financial Times recently reported that UK office leases have fallen to their lowest level on record while vacancy rates have soared to a near decade high in the aftermath of the global outbreak.
Average leases dropped to two years and 10 months in the first quarter of 2023, the paper reports, the lowest level since data was first collected in 2018.
Whilst the office market has become challenging within many regional cities, Trident are seeing that there is still demand for refurbished space that achieves a high quality specification that is driven by sustainability goals.
Business Facing Dilemmas
Of course, the businesses that occupy these buildings are also facing dilemmas of their own. The economic slowdown combined with energy inflation is taking a serious toll on many, whereas others struggle with supply chain issues resulting from global political turbulence and keeping pace with the rate of digital transformation.
And then there is recruitment. Sourcing, attracting, and retaining talent is one of the biggest challenges facing companies today, with many listing it as their top priority. The situation shows no signs of improving. Many predict the war for talent will only intensify as we move closer to the 4th industrial revolution, with companies needing to radically re-skill or upskill to meet future talent requirements.
Sustainability And Talent Acquisition – Unlikely Bedfellows?
Perhaps, however, striving to achieve EPC B rating by 2030 could help to alleviate some of the recruitment issues companies are facing. Not just achieving the EPC B rating but creating sustainable workplaces that are genuinely energy efficient and support the health & wellbeing of employees.
It is no secret that to achieve an EPC B rating, many office buildings will need to undergo significant renovation works. Indeed, a report issued in July this year by Carter Jonas – Offices: Past, Present, Future; the Sustainability of Office Stock – predicted that just 8.3% of office space in the UK will attain the required EPC B rating by the time it comes into force in 2030. This illustrates the scale of the challenge.
It also revealed that just 11% of current office floorspace across 12 UK cities – London, Birmingham, Liverpool, Newcastle, Edinburgh, Glasgow, Leeds, Manchester, Bristol, Cardiff, Cambridge, and Oxford – would meet the proposed new minimum energy efficiency standards (MEES).
Given this information, it is hardly a surprise that the Deloitte Crane survey reported office refurbishments across the capital had this year reached an all-time high.
A total of 37 refurbishments, coverage 3.2m sqft of space, got underway in London in the six months to March 2023 as landlords clambered to hit the 2030 target.
With the race to meet the looming deadline well and truly underway, it is here hope might emerge for companies desperately seeking those all-important hires.
Dream Big
But those hopes won’t be realised unless landlords, surveyors, architects, and everyone with a role in these huge refurbishments fail to dream big.
Top talent demand a lot from their employers and a comfortable, air-conditioned office has long since fallen short of the mark. They want to know that not only does the company they work for align with their personal values, but the building they work from does as well.
For many, high up among those values is sustainability, and focusing on that – as landlords must if they are to meet the regulations – as well as modern, innovative design and flexibility will help those occupiers strike an effective blow in the war for talent. The workspace also needs to support wellbeing in order to encourage employees to spend more time working from the office than simply opting for the work from home option.
Market Re-Set
Of course, in line with Carter Jones’s predictions, some older office stock simply won’t be able to be brought in line with the regulations. It won’t be cost effective for many of those older “secondary” buildings and they may need to be repurposed, potentially via a “change of use”. Most planning policies and investors recognise that demolition is an absolute last resort given the embodied carbon in the existing structure and the “new” embodied carbon created via the replacement building.
But COVID has changed the way we work and the demand for office space in a post-COVID world has also diminished, marking what could be a re-setting of the market place.
One thing is for certain though; to ensure the office space that remains, remains viable, the refurbishment works that take place over the next six-and-a-half-years must be as people-centred as they are environmentally virtuous.
After all, sustainability isn’t just about the environment, it is about people. Creating an environment where people want to be is one of the biggest ways of creating create business in which people want to work.
If you would like further information on the services we can provide in relation to sustainability, then please contact Daniel at daniel.brooksdowsett@tridentbc.com .
