Re:Generation Edition 03
Commercial property market in 2024
Cutting embodied carbon The urgency to reduce embodied carbon emissions in commercial offices is underscored by projections indicating a shift of emissions to embodied carbon by 2035. Standardised measurement tools, such as the RICS’ Whole Life Carbon Accounting Standard (WLCA), offer a transparent approach to measuring both embodied and operational carbon, facilitating compliance with regulatory and client demands. Early engagement and collaboration among stakeholders are essential to embed sustainability from the inception stage through construction to occupation. The Gleeds report found that developers are increasingly committed to constructing best-in-class offices with superior sustainability credentials. The Ev0 building at Didsbury Technology Park is a good example of this, aiming as it does to be the UK’s lowest carbon new build office development by extensively utilising sustainable timber and low carbon concrete. Ev0 not only meets but exceeds the Royal Institute of British Architects’ (RIBA) 2025 target for whole life carbon, setting a precedent for future sustainable developments.
Risks and opportunities
Inflation and interest rates pose challenges for investment volumes, yet lower valuations present opportunities for value-add investors seeking assets with growth potential. Prime offices, in particular, are experiencing a shortage in supply, driving rental growth and attracting a diverse range of investors. However, sound investment strategies are imperative to mitigate the risk of stranded assets and navigate potential lender interventions.
Amid the uncertainty of a flatlining UK economy, a recent Gleeds survey delves into the dynamics shaping the UK’s commercial property market, shedding light on its prospects, opportunities, and challenges.
Sustainability shaping investment decisions
As part of a sector-wide survey of the UK construction industry, leading consultancy Gleeds focussed on the prospects and challenges facing the commercial sector. Its findings revealed that strip-out and refurbishment emerges as a dominant trend, with over half of the respondents noting a preference for retrofitting existing spaces over new builds.
Planning approvals for commercial office projects have surged, indicating a promising pipeline of work for the upcoming year. Deloitte’s Winter London Office Crane Survey underscores this trend, with refurb projects underway across millions of square feet of office space. Sustainability considerations are increasingly driving investment decisions, with investors targeting properties with low environmental ratings for value creation through sustainability upgrades.
However, the looming Minimum Energy Efficiency Standard (MEES) Regulations pose a significant challenge, necessitating a holistic approach to environmental, social, and governance (ESG) strategies across a property’s lifecycle to avoid devaluation.
The findings of the Gleeds survey offer valuable insights into the evolving landscape of the UK’s commercial property market in 2024. Despite economic uncertainties, sustainability remains a driving force shaping investment decisions and property development. By embracing innovation, collaboration, and forward- thinking strategies, stakeholders can navigate the challenges and capitalise on the opportunities presented in this dynamic environment.
Dominant Trends in UK Construction Industry
05
www.General-Demoliton.co.uk
Editors note: To read the full report visit www.gleeds.com and search ‘UK construction market report.’
Made with FlippingBook - Online magazine maker