Smaller office landlords can lead the industry on reducing embodied carbon by retrofitting using high quality design, says Lateral
Research by investment manager Lateral indicates that up to 70 per cent of refurbishment carbon emissions could be saved by more environmentally conscious forms of fit out and design.
The company believes that, with much of London owned by smaller landlords, the responsibility for reducing embodied carbon cannot be left to big developers and that they may have the answer to drive change on behalf of the property industry.
Lateral is set to launch its flagship London scheme, 22 Shad Thames (the listed former Conran Building), early next year and it will be the only sizeable London office building that is exclusively designed and fitted out as Cat A+, an industry term for an even more fully-fitted interior than ‘flex-plus’ and ‘plug and play’.
Lateral only works with existing buildings and concentrates on retrofitting as part of its mantra to provide beautifully designed and modern workspaces in interesting buildings that are accessible to occupiers of all sizes on flexible terms. This means that start-ups and SMEs as well as larger occupiers can afford to tap into smart technology and sustainability as well as great design without having to spent a fortune up front in the fit-out (and then after, in the rip out) process.
The reality of the subsequent impact real estate and commercial construction has on the environment, has become all too evident for many, including supporters of the French Railways House in Piccadilly, London. The City of Westminster recently granted permission to tear down the historic building, with many designers and architects criticising the sustainability implications of the proposed demolition.
With the built environment responsible for 40 per cent of greenhouse gases, and 11 per cent of that consisting of embodied carbon, the environmental implications for this project could pose quite an alarming result. Make Architects said that the scheme, a single building of 5-8 storeys, will achieve an embodied carbon of 560 kgCO2e/m2 rated as ‘C’ in the LETI/RIBA embodied carbon targets.
As Make says: “…the most sustainable building is the one that already exists…” with many offering alternative solutions which aim to reduce the carbon footprint of the project. Retrofitting mitigates the emissions derived from the sourcing and assembling of new materials, as well as with demolishing the existing building and processing the waste generated in the process. The environmental cost of creating commercial properties can be greatly reduced in several ways but requires the right people, careful planning and effective design.
Established in 2020, Lateral is a commercially astute team of property, tech and design experts led by owners Rob Beacroft, Nick Beacroft and Robert Crawley, with an exciting number of assets already in their portfolio pipeline.
Lateral's unique property investment proposition is to incorporate sustainably redesigned office buildings with a view to saving upwards of 50 p[er cent embodied carbon in comparison to new schemes. Lateral aspires to deliver Cat A+ across all of its office schemes, a future-proof industry term which enables building fit-outs to last around 8-10 years, compared to a standard multi-tenanted building, where 2.5 years is the industry average. This means that you can expect a typical building to undergo 20-30 fit-outs in its 60-year lifecycle, whilst a Lateral building would undergo just 6-8, vastly reducing wastage and landfill.
Unlike many other landlords, Lateral takes on the cost of fitting out the office space, selecting products that have longevity and fitting whole floorplates with advanced technology to support operational sustainability. This design-led approach also enables greater flexibility for occupiers, meaning tenants can move in in weeks rather than months and space can be easily adapted for all size businesses. Lateral is therefore challenging the notion that to embed sustainability into the heart of a building it has to be new, or the landlord (or tenant) has to be big.
Rob Beacroft, Director of Lateral says: “Real Estate is sadly one of the most wasteful sectors, with construction consuming 40 per cent of the world’s natural extracted resources (around 35 billion tonnes) and sending circa 13 per cent of all new construction materials straight to landfill. Although the real estate industry is always looking at ways to reduce such environmental impact and climate change activity, there is still a huge lag in perception about to do this, particularly in terms of existing buildings and affordability.
“At Lateral, we believe there is a simple way to help solve this unnecessary wastage problem. Our ambition is to deliver developments with a greater focus on fit-out investment, to ensure floor plates are designed to last longer and support a building’s operational efficiency overall. This approach will also take a significant amount of the fit-out cost away from tenants and add value to assets with longer lasting product solutions."
It is usually the tenant who has to think about the cost of fit-out at the beginning of a lease and dilapidations at the end. However, if landlords can offer space that has already been well thought out in terms of design, tech and materials, then the tenant also benefits on cost, while the leases remain flexible. In turn Lateral says it saves 70 per cent-plus of energy that would otherwise be emitted on top of the operational efficiencies the buildings embed.
Beacroft continues: “We have also given great consideration to wellbeing, air quality and fluid multi-functional space, and even before the pandemic our workspaces were designed to a density of one person per 10m2 compared to the standard for most large well-known serviced office brands being around 1 person per 4m2. Similarly, the smart tech we are putting into these buildings is available for all tenants to use immediately and opens up innovative methods of working and efficiencies to those who would not normally be able to access it without great expense or know how. We want to change the game for both landlords and tenants and have a positive social impact at the same time.”
Lateral is the asset manager behind the refurbishment of 22 Shad Thames, more famously known as The Conran Building, which is being converted to offices in this very manner. Despite being relatively new, Lateral has an extensive track record in property and finance, alongside a strong set of values which are being embedded across their investment portfolio. Their core focus is to enhance returns by blending high quality design with the latest technology and flexibility, looking to a greener future and how people want to interact with property in a post-Covid world.
Lateral’s two core assets are due for completion in Q1 2022; 22 Shad Thames is a RIBA award-winning riverside property originally designed for David Mellor OBE by Hopkins Architects and now being repurposed by Squire & Partners to retain and enhance the high quality to stand the test of time; Trinity House in Oxford will be the second of Lateral’s buildings where the space will be fully fitted out but this time for labs and office space. Designed by Spratley & Partners this will create 26,000 sq ft of life science focussed space, which is currently in huge demand and short supply.