Is Real Estate's Obsession With Wellness Elitist And Killing The Planet?
That’s the received wisdom. Is it right? The answer is: No, that’s nothing like the full story.
A debate is now emerging about exactly how high the real costs of wellness could be.
In conversation with Bisnow the workplace wellness agenda has been likened to elitism and cited as a prime example of the kind of human-centred wrong-thinking that created our various sustainability crises.
How could such a well-meaning agenda attract such criticism? Bisnow has spoken to workplace consultants, wellness and ESG practitioners, developers and architects in the commercial and residential sectors on both sides of the Atlantic. This is what they told us.
The Haves And Have Nots
Orchard Street Investment Management decided to make wellness the focus of its refurbishment of the 51K SF Bauhaus office block at Quay Street, which has become the UK’s first refurbished building to be awarded WELL Gold status.
The mathematics of the development, as reported by Place North West, are revealing. Whilst achieving the WELL certification directly added a tiny 2% to the roughly £5M refurbishment cost, wellness requirements relied on the much more extensive (and expensive) replacement of the building's mechanical and electrical systems to deliver the improved air quality, lighting and water systems certification requires.
This heavy cost burden is bearable in a market with rapidly rising rents: Orchard Street expect to see rents at Bauhaus rocket from £25/SF to £35/SF. A quick back-of-the-envelope calculation of £10/SF rental uplift on a 51K SF building shows that the £5M budget was tight. The building probably rose in value from about £25M to north of £30M.
The trouble is that without that kind of rocket-powered rental growth it is hard to see how such a thorough-going refurbishment could be viable, and if it wasn’t, the wellness certification would probably be unviable, too.
So whilst a wellness-themed refurbishment can work in Manchester, down the road in Liverpool, it probably can't. In Liverpool the best rent recorded is £28/SF and with demand slender the prospect of pushing £33/SF is slight. On the face of it, a Bauhaus-type refurbishment stands little chance of viability.
This shows that wellness standards serve well the markets that already enjoy the largest stock of new, grade-A office buildings — like London and Manchester — and neglect, because it is not viable, all those millions of square feet of ordinary floorspace everywhere else. In short, it’s a plaything for the top-most tier of wealthy occupiers and the landlords that cater to them. An extra treat for those who already enjoy the best office workspace human ingenuity can devise.
“Most people don’t want to say this out loud, but we need to target the money for wellbeing to the underserved properties, because the gap between the haves and have-nots is widening," Sargent said. "Most of the buildings we’re talking about for wellness are already in good shape, but we are ignoring the buildings that will never qualify [for extensive refurbishment], where cost would be a problem. They are the properties that need wellness more, and acutely.
“We have to think about ways of serving people who do not have the luxury of already occupying grade-A offices, the offices wellness is trying to make even better. And nobody says this because nobody wants to admit that what’s happening here is elitist.”
The suspicion that wellness in the workplace might only be a hot button topic in the handful of places that can easily afford it, is given a boost by a quick check of Google trends data for “workplace wellness” over the past 12 months. Today search frequencies are close to their peak, and they have been strong all year, but in the U.S. the only measurable provenances are in New York State and California.
Because You Deserve It
London-based Assael Architecture director Félicie Krikler is no enemy to wellness. “I’m all for creating good and healthy places, and that’s what architects ought to be doing anyway,” she told Bisnow.
Much of her new-build residential work is in heavily constrained locations close to major roads and railways, not least her work on a partnership between Transport for London and build-to-rent developer Grainger.
“We obviously need to think hard about things like environmental standards of schemes like the 500-unit development at Bromley-by-Bow, which is near rail and tube stations, because if you want this to be a nice place to live you have to work on the place, and greening the space, and landscape.”
But the focus on the needs of a small minority of householders at the upper end of the market has her seeing red. “I’ve been asked so often since Covid about how we design healthier homes, and I’m glad awareness has been raised, but should I really think about the one-sixth of the population that is working from home, and their little work zones and home offices, or should we design for the other five-sixths who cannot work from home or cannot afford the luxury of a home office?” Krikler said.
“I’m all for more natural light and views of nature and everyone feeling good, but I feel quite strongly that one of the things the pandemic has brought to the fore is that a lot of people are not living in good quality accommodation, and they will suffer most.”
For those who think like Krikler and Sargent, the problem isn’t that wellness is a bad idea — on the contrary, they are convinced it’s a very good idea — but that it is not available to everyone, and is not badged as the luxury product that it probably is. And this misunderstanding means the gap between the best and the rest gets ever wider.
Out Of Balance
An atmosphere of privilege is not the end of the problem, because many of the people Bisnow spoke to worry that the workplace wellness agenda runs contrary to wider sustainability aims. They fear that by pursuing the very visible appeals of wellness, they are damaging the less visible but also urgent needs of a climate-challenged environment.
MAPP manages around £13.2B of commercial property and 8,500 occupiers throughout the UK. Head of Sustainability Rowan Packer is — like Krikler and Sargent — convinced of the value of improved light, air, proximity to nature, and the kinds of mental and physical spaces encouraged by wellness programs.
But he also worries that wellness standards can have an adverse effect on ESG because, for instance, carbon emission and usage go up and more materials are added to offices to satisfy human needs. Problems with meeting air quality standards are the most often cited example.
“What people don’t get about wellness is that this is all about humans, and it’s a product of the same way of thinking as caused climate change,” Packer told Bisnow. “The focus on wellbeing is the same psychological behaviour, which centres everything on the human context. So when wellness people come along with certification and other jazzy things, humans have to explain afterwards how this impacts on the world, and you cannot avoid the effects.”
Packer would prefer wellness to play a balanced part alongside biodiversity and sustainability objectives: His fear is that currently it is overwhelming these other objectives, and he shares the concern that it is in danger of becoming a narrow luxury product.
“Wellness and sustainability have been fighting since day one, and wellness is winning. So what you get is naïve clients assuming wellness is part of their ESG goals but in fact missing the balance,” he said.
The emphasis on wellness is helpful if it reminds people to build thoughtfully. But if they pursue this objective without correcting for sustainability and biodiversity, it’s going to end in tears.
Worse, too many assume that acquiring the right kind of wellness certification is an end in itself. “A rating for a building means nothing, because it all depends on how you use the building, which depends on the psychology of management. There are many buildings without certification doing much better than those with.”
Packer is no enemy to wellness, but he has serious concerns about the way the property industry and its clients are responding.
Wellness And Wellbeing
Those heavily invested in the wellness agenda admit that there are genuine conflicts with sustainability, as Packer asserts.
Laura Wardrope is senior project manager at JLL and sat her WELL exams last year.
“There are issues like air quality that are a big consideration,” she said. “Mechanical systems with fine particulate matter filters have an impact on energy consumption. And alternative options for openable windows have their own challenges, so there is no doubt there can be conflict.”
However, Wardrope has no time for the wider concerns. “Employers have to provide an environment that supports human health. What are they arguing we should do instead?” she asked.
Wardrope also insisted there is nothing privileged about wellness. “Occupiers and landlords can pick and choose the aspects that work well for them, you don’t have to do everything, and much of it is about policy and support and not a fancy office fit-out. It doesn’t have to come with a big cost.”
Roots in the Sky will be London’s first office building to deliver an urban forest rooftop with extensive access for the local community and the public, with community gardens and collaborative neighbourhood uses, a rooftop restaurant, bar and swimming pool, and private terraces for the office space below. The venture takes 1,300 tonnes of soil and a lot of work, and will not be cheap, although Fabrix investment manager Matt Weaver declined to discuss the cost.
Weaver insisted there was no conflict with sustainability. “The swimming pool is being heated by the building’s waste energy, and we’ve decided it will be cold when there isn’t enough waste to heat it. So you can put wellness and sustainability together, though it involves some sacrifices to achieve it,” he said. “You can’t have wellness without sustainability.”
He also briskly dismissed the idea that there is something privileged about adding yet more facilities to already top-class office floorspace. “You can have the same principles of green space, natural light, airflow, in small offices as well as big, and it doesn’t have to cost,” he said.
Ben Channon is design director for wellbeing consultancy Ekkist, and one of the evangelists of the wellbeing cause.
Wellbeing — he prefers the expression to ‘wellness’ — “definitely isn’t just for the already indulged” he said. “It actually makes financial sense to take this approach, rather than viewing it as an expense or a luxury.”
Issues like improving indoor air quality for buildings located in heavily polluted areas is, he conceded, a challenge to sustainability concerns because the right kind of air filters are potentially big energy consumers. “That said, there are certainly more overlaps than conflicts, with many points in LEED and BREEAM counting towards a WELL score too. More daylight can mean a reduced need for electric lighting, for example, while providing better facilities for cyclists not only encourages people to stay fit and healthy, but also nudges them away from polluting modes of transport,” he said.
For one side there is something about wellness that feels a tiny bit privileged, a shade unbalanced. For the other it is about self-definition.
“It is really about cultivating a philosophy of caring for the people who use your buildings," Channon said. "At a base level this can be about wanting to create a building that does no harm, whether this is through harmful chemicals being released by paints and furniture, or through designing cramped, dark spaces that have a negative impact on occupants’ mental health.”
Fortunately, landlords and developers may not have to choose. ‘Wellness centrism’ is an option, and it is one many have taken by default. Cushman & Wakefield Head of Occupier Business Performance Despina Katsikakis is its champion.
“Inevitably the pandemic has led us to look at public health through the lens of the buildings we spend most of our time in," Katsikakis said. "Wellness won’t end in private sector high-end buildings. Pre-pandemic I could see the strength of the elitist argument, because wellness was only being considered by high-end developers. But post-pandemic we can see that the agenda affects everyone. This is now a public health agenda.”
She, too, concedes the conflicts with sustainability (“There are tensions,” she said), but they can be resolved if the right interventions are chosen. In the meantime wellness pays back for occupiers, who reap improved performance, and it doesn’t need to cost a fortune. If a roof garden is out of your price range, how about asking staff to bring in some seeds and plant a simple allotment on the roof?
Done properly, wellness is the enemy of privilege, not its friend, Katsikakis said. “It extends to being able to pick up the kids from school, and do the grocery shopping at a convenient time, because health in buildings is about equity — a healthy building benefits everyone, young or old —and it is about equity rather than privilege.”
Katsikakis is co-chair of a committee set up by the International Well Building Institute that has looked into these issues and reports in mid-August.
Developers have also opted for pragmatic wellness centrism. First Base is developing 120K SF workspace and 100 build-to-rent homes at Cambridge’s Devonshire Gardens in a joint venture with RPMI Railpen. There will be art and fresh air, lots of trees, hundreds of plant species and a community food garden, as part of a menu of wellness extras.
First Base Chief Executive Barry Jessup said he is not very motivated to seek wellness certification. “We’re more interested in the realities,” he said.
Jessup is also comfortable with the commercial reality that wellness is at the luxury end of the market. “We’re creating a premium product, and that’s why we are doing it. This is better than what was there before, and it is what occupiers want and will pay for,” he said.
“Wellness probably came out of the marketing brochures originally, but by now it should be embedded in development if you want to be successful. Today it can’t just be marketing, because people would see straight through it.”
This disillusioned realism is probably the future for the wellness agenda. Wellness loses its sense of yoga-mat indulgence to become just a sensible pragmatic response to a world in which paying for improved public and personal health feels more vital than ever.