If Building For Sustainability Doesn’t Change, We Will Be Surrounded By Stranded Assets

Today, it is possible to design and build net-zero buildings that have minimal impact on the planet — but almost no one is doing it.

UK environmental regulations are not sufficient and those who create real estate still don’t realise the fundamental basis of building design needs to be revisited.

This is the message of a report created by WSP called ‘Fresh thinking for the office of the future’. As well as research on the current situation and engineering solutions, the report details how behaviour and design need to change. This is not only to save the planet, but to avoid the serious risk of stranded assets.

“To date, the real estate industry has done lots of work to try to define what sustainability means, but that’s not enough anymore,” WSP Head of Innovation for Building Services Peter Brickell said. “Companies have made lots of statements about their pledges to reach net-zero, but they don’t know how to get there. But now, environmental targets are getting much harder and buildings need to be designed differently from the very beginning.”

Stranded Assets

The call to move toward net-zero has got louder in the last 12 months, Brickell said, as more businesses commit to reducing emissions. This is already creating a wave of movement toward offices that are more sustainable. WSP’s report estimates that a net-zero building could be worth 5% to 12% more than a nonsustainable counterpart.

However, soon it won't be that a sustainable building is worth more. Instead, the question will be how much less a nonsustainable building is worth. Tenants will increasingly shun buildings that don’t meet the more stringent environmental regulations that are undoubtedly on the way.

“At the moment, some developers generate a premium on rent by creating a sustainable building, but this won’t be the case in the long term,” Brickell said. “It will become normal, but companies will be left behind. Effectively, buildings that aren’t sustainable will face a ‘brown discount’.”

WSP’s report estimates this potential brown discount could be as much as a 30% reduction in price. Taking this further, Brickell said that the risk of stranded assets could affect wider economics.

“A large proportion of pensions are invested in commercial property,” he said. “Suddenly, there will be all these unlettable assets that will devalue and cause economic problems across the country. If you want to spiral it, you can see it’s not only a developer/owner problem.”

The Performance Gap

At a first glance, it might seem logical to look at the fabric of a building to create a sustainable office. However, WSP’s report suggests that 45% of energy is consumed by tenant loads — the electricity to power computers, lighting and so on. All this is controlled by the behaviour of people in the building. Even more strikingly, the report details how as much as 40% of this tenant load use is consumed either out of hours on weekdays or over the weekend.

The problem, Brickell said, is that even if offices are designed with sustainability in mind, no one is measuring how they perform when operational. People leave lights and computers on, as well as heating and air conditioning. Building regulations’ standard calculation to determine an EPC rating is not representative of how buildings are operating.

“The reality is, it could be three or four times what the energy use was predicted to be,” he said. “Developers simply don’t do enough energy modelling to see how people will use it. You need to get to the nitty-gritty to get rid of the performance gap.”

Brickell said that Australian certification NABERS is growing in popularity in the UK and could become a uniform way to assess how a building operates. Its guidance is used to design, model and assess buildings using more realistic loads.

“It’s all in the detail,” he said. “NABERS’ design for performance calculation method goes far deeper than everything has looked in the UK before. It asks designers to use software models to model every pump, to input every pressure point and simulate it. Essentially it is trying to create a digital twin of a building to use as a basis for design.”

Embodied Carbon

All this modelling needs to define the correct criteria for buildings right from the start of the design process, the report said. If not, the predictive analysis of energy consumption will always be wrong and incorrect solutions will be installed.

The techniques detailed in the report are just as applicable to existing buildings, Brickell said. For example, the technique detailed in the report called ‘free cooling’, using the outside air temperature, can be installed in any building.

As well as addressing behaviour and technology, designing a building with net-zero in mind requires tackling one of the largest environmental challenges facing real estate: embodied carbon. This is all the carbon generated during the creation of a building, including manufacturing and bringing materials to the site. Often, installing cutting-edge sustainable technology and fabrics to reduce operational carbon might come at the cost of embodied carbon.

“You can implement the best free cooling system to reduce operational carbon, but if it requires a new facade or extended floor-to-ceiling height, then is that OK?” Brickell said. “Ultimately, upfront embodied carbon is the biggest carbon problem to solve, but you’re left with operational carbon over the full life of a building. You need to get the balance right.”

Overall, the report proposes taking a holistic approach to designing buildings that brings in all parties from the beginning, to ensure what is created will be used as expected. We all need to take a responsible approach to energy use, the report said, and the real estate sector needs to do as much as it can to encourage it. 

To find out more, download the full report from WSP's website. 

This article was produced in collaboration between WSP and Studio B. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.