While the need to avoid demolition is more urgent than ever, there are many challenges to overcome before a building can be retained. The new government could do much to improve the current system, writes Avison Young’s Laura Jenkinson
What makes a good building that is worthy of retention? And to what extent should a building be retained given the potential commercial drawbacks of doing so?
These are questions that we must ask ourselves as planners, architects, and property professionals. While once the issues mostly focused on heritage impacts, the climate crisis now sharpens the emphasis on the carbon cost of development.
Priorities vary when it comes to retrofit. Full retention and minimal intervention are a priority for many lobby groups. For asset managers, the priority is at the very least meeting an EPC rating of B by 2030 and delivering a lettable and viable building.
For office agents and tenants, it’s all about functionality, location, and accessibility. And in some cases – for the most challenging buildings – only a change of use may safeguard a building from becoming a stranded asset; otherwise, it might face full demolition.
Stranded assets are of no benefit to any of us. A recent Business London paper notes that 85% of office stock in central London has an EPC rating of C+ and risks becoming stranded – with the cost of upgrading stock to an EPC lower than B estimated to exceed £5bn in central London alone.
With 30% of London’s carbon emissions arising from industrial and commercial spaces, there’s an urgent need to substantially upgrade our building stock. But how can we do this?
The answer lies in speed and pragmatism – not in “retention puritanism”. The planning system is slowing down due to an increasing number of spot-listing requests. Recently, one of our projects in Westminster, designed to be one of London’s first PassivHaus office buildings and targeting a LETI A rating, faced delays; it is just about to become vacant and requires urgent attention.
We submitted a certificate of immunity (COIL) as part of the pre-application process, yet despite the need for intervention, it took eight months to receive a decision on the COIL.
Following the recent general election, there’s an opportunity for renewed focus and innovation in addressing London’s urban development needs
Heritage buildings are even more complex. There are notable examples of adaptations of some of the most challenging buildings – for example, the American embassy, purpose-built in the 1950s and now converted to a hotel, and Millbank Tower, which is proposed for extension and re-cladding to ensure its continued use.
A pipeline of successfully adapted buildings exists in the City of London – 1 Appold Street, the Ned, Angel Court, and more. However, pragmatism can often be lacking.
The City of London is commendably leading the charge with its “heritage buildings retrofit toolkit”, a resource aiding decision-makers in assessing the balance, along with its “carbon options guidance” and “retrofit fast track” approach within the draft City Plan.
Much hype surrounds retention, and with the race for quality in the office market – coupled with office attendance in London at only 59% of its January 2020 level in January 2024 – urgent action is necessary.
As my client, Oliver Hunt at Landsec, said at our Hill House planning committee in the City of London earlier this year, “our offices nowadays have to be more than just a place to work – they need to draw people in and earn the commute”.
For Hill House, we retained nearly 60% of the existing structure; while there were more sustainable options in embodied carbon terms, the public benefits associated with the proposals were considered to outweigh those impacts – particularly a new and better-functioning public library.
Our planners play a crucial role in this process – it is up to them to assess whether public benefits may outweigh both heritage and carbon impacts and to find balanced solutions. It is also essential for members to heed professional advice and make informed, balanced decisions.
Ultimately, better direction is needed from central government and the London mayor on how to balance these priorities, with more flexibility for case-by-case assessments at the local level. With a new government in place, and its research survey ending on 31 October, there is the potential for a national retrofit policy. What should this policy look like? How can we ensure it doesn’t stymie development or result in a substantial number of stranded assets? What wider issues need addressing?
Here are my six key recommendations.
Key recommendations
1. A national position on retrofits focused on repurposing stranded assets
The policy must primarily support the repurposing of buildings and, secondly, redevelopment if vacancy risks arise.
To avoid slowing down development, the policy should use supportive language for retrofits, clearly defined as substantial retention and refurbishment comprising at least half of the existing building’s above-ground structure by cubic metre. Substructure retention should be prioritised where viable, considering deliverability and viability implications, including potential densification in accessible locations (which may require more demolition to strengthen a building for greater height or density).
Where disputes arise on demolition versus retrofit or substructure retention, expert advice should be obtained regarding commercial, structural, and technical factors, such as fire safety, and embodied and operational carbon impacts over at least 60 years. This guidance should be proportional to the scale of the development, with expert advice required primarily for applications with over 1,000 m² of new or changed space.
An application should only be refused on carbon grounds if expert advice justifies this approach, taking commercial factors and obsolescence into account.
2. A flexible approach to a mix of uses
London boroughs often mandate mixed-use requirements with little consideration for efficiency or viability, which can deter optimal land use. Where it can be demonstrated that a mix of uses is unviable or undeliverable, 100% office schemes should be prioritised.
3. Flexibility on changes of use
Changes of use may be the only way to ensure the longevity of a building, particularly heritage assets. These should be considered case by case, with the London Plan proactively promoting changes of use where long-term viability is demonstrated.
4. Immediate intervention when required
Some buildings are so clearly stranded that immediate intervention is essential. Local authorities should act to prevent further asset degradation, with flexibility provided through the London Plan, informed by evidence-based peer reviews where relevant.
5. Tax breaks for retrofits
Tax incentives, such as materials passporting, need urgent prioritisation. The planning system can assist with CIL and s106 breaks where retrofits are challenging to achieve. The London Plan could ensure affordable workspace policies do not hinder development by allowing exceptions for specific tenant pre-lets and considering viability where policies render developments unfeasible. Like affordable housing, CIL relief should apply to affordable workspaces.
6. A stronger emphasis on following recommendations and fewer committee decisions
A stricter code of conduct should ensure an evidence-based approach to planning decisions. A minimum threshold for applications requiring committee approval – set nationally with standard exceptions – could help reduce adverse decisions and prioritise planning officers’ time.
Following the recent general election, there’s an opportunity for renewed focus and innovation in addressing London’s urban development needs. With a new government, we look forward to a fresh, pro-development stance that could stimulate the industry and facilitate collaboration with the mayor of London in delivering necessary development.
As stakeholders await the budget and further policy announcements, there is hope for a cohesive vision that aligns with the objectives outlined here, ultimately benefiting the city and its residents.
Postscript
Laura Jenkinson is a principal in Avison Young’s planning team
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