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The retrofit experience

• natwest markets • Season 1 • Episode 3

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0:00 | 17:47

The latest trends and sustainability innovations in the world of commercial real estate.

In this episode, our host Ashley Toy sits down with Laura Beaumont, Head of Sustainability at Helical PLC, a leading office developer in central London. Together, they dive into the challenges of retrofitting large commercial properties and the strategies shaping their approach – with a  particular focus on Helical’s 100 New Bridge Street, London development.

NB. This was recorded on 13 February 2025.

Get more tips, tools, and strategies to help navigate your sustainability journey today:

SPEAKER_00

And I guess that's the thing with sustainability is it's so rapidly evolving and the design process of a building can be even planning 18 months. You can build it through years. So you you have to have some sort of foresight into what's coming down the track to stay relevant and competitive and ensure that you're delivering a building that it still you know meets the demands of uh of you know the day that it's delivered.

SPEAKER_01

Hello and welcome to another episode of Property Perspectives. I'm your host, Ashley Toy. And today we're joined by Laura Beaumont from Helicorp. Laura, if you could maybe introduce yourself to the viewers.

SPEAKER_00

Sure. Uh my name is Laura Beaumont, as you said. Uh I'm head of sustainability at uh Helical PLC. We are a central London office developer and uh we partner with Nat West on lots of projects.

SPEAKER_01

Um and we'll be getting into all things sustainability and talking a little bit about your hundred new Bridge Street developments.

SPEAKER_00

Great. Thank you for having me on the podcast.

SPEAKER_01

Before getting into it, please remember to hit like and subscribe so you can see the latest episodes as they become available. So let's get into it. So Laura, it would be great to talk about how you think about sustainability at Helical.

SPEAKER_00

We are a Central London office developer. Um so my role um is I head up sustainability in the business. Um and we consider sustainability both a corporate level. Um we are a listed company, so there is a lot of kind of reporting, um, and maybe the less glamorous side of sustainability, but is equally important. Um and then we also think about sustainability very much at a property level. Um so we're thinking about what future occupiers are looking at for, um, what local stakeholders um are looking for from buildings and how perhaps they're going to be impacted by the building. Um and also making sure that we have building-specific targets that talk to our wider corporate sustainability. Um, each building is really unique, um, and because of that, we don't have a one-size-fits-all approach to sustainability. We really look at the assets on an individual basis and consider how best we're going to build that building, um, or rather, design, build, let, and uh, you know, and and sell that building in a way that um is truly sustainable.

SPEAKER_01

Do you have a process you follow when you think, okay, I'm going to pick this building up, we're going to do something to it, and we're going to either sell it or lease it. How how do you manage a building through that journey?

SPEAKER_00

Yeah, so it really depends on the type of building that we're acquiring. So we acquire both uh existing assets, which we um will consider for either a deep cut and carve, so that's which which is quite an umerous process where you take the uh the property all the way back to its frame and you build it back out again. Um we have a light touch refurb, which is where you keep the facade, you keep the structure, but you're really looking focusing internally. Um and then we also have our ground-up developments, so a hole in the ground or a bare piece of land. So depending on what our plans are for the building, we'll determine the type of sustainability strategy that we take. For example, at 100 New Bridge Street, that's what we call a cut and carve, a major refurbishment. Um we've also badged it as a carbon-friendly new build. Um, it is an existing building, um, but we are going to take what is a brown asset. Um, we are going to take it back to the frame, uh, build it back out again, replace the facade, um, and deliver what we hope is going to be a kind of an amenity-rich, low-intense, low energy intensity, carbon, low-carbon building that meets today's occupiers. Um, so that's a very different kind of sustainability journey. It's all around reuse, recycle, circular economy rather than a new build, which might be more focused on, you know, how can we implement the design of the structure to be able to design out materials.

SPEAKER_01

So my help for everybody listening, I guess, if you could just maybe give a brief overview of like what the building is and then maybe zero in on some of the main sustainable aspects of the building.

SPEAKER_00

Sure. So um we acquired the building um actually a couple of years ago. Um, we acquired it fully occupied by Baker McKenzie with a lease expiry in December 2023. Um the building is now obviously vacated, and we're in the process of taking the building back to um the frame. We are adding two floors, um, and by adding two floors, uh, we've actually been able to incorporate a very generous roof terrace. Um I'm perhaps a bit biased, but I think it's got one of the best views of St. Paul's um in the entire city. It's completely uninterrupted. Um, we get to take advantage of the St. Paul's viewing corridor. Um so it will be a very special, um, special space. Um in terms of sustainability, I've already mentioned that one of the, you know, the main focus on the project was around the reuse strategy because we have a a building there. We don't want to knock out what we can't use. Um so we've been able to retain uh around 90% of the steel structure. Um and actually, what you you saw on site today, um we've also been able to take advantage of um reusing steel and and doing a steel exchange.

SPEAKER_01

Yeah. So maybe we can get into that actually while uh whilst we're at. Of course.

SPEAKER_00

And it's it's a rapidly evolving market. There is a huge amount of refurbishment happening in London at the moment. Um it's actually really difficult, certainly, for new planning commissions to knock buildings down and to rebuild them because that is kind of I guess not not what the city is looking for. Um which means that there is a what we call it a bank of materials, and steel being um is expensive, it's very heavy, and it's very carbon intensive. It's now kind of seen as a a key material to be able to reuse within, you know, within the built-in, built environment. So at 100 New Bridge Street, um we're very keen to either reuse steel that was on site um and where we weren't able to reuse steel, we um we partnered with a a business to do a steel exchange. So we needed a eight-metre length, um, but we had a 10-meter length. You you guys come and pick up our 10-meter length, and we'll have your reused eight-metre length. Um, so it's a kind of a material exchange um that worked, and we were able to do it at kind of a minimal cost impact, which is very important. Um as I say, it's a it's a rapidly evolving market. I think we're going to see a lot more of it in the in the in the in the building industry. Um actually, one of our projects above um Bank Station at Ten King Williams Street, we've been able to um looked at using kind of 10% as as reused steel, which has been a really great outcome for the project and has really lowered the embodied carbon.

SPEAKER_01

That's great. And I guess when you think about buildings and the intensity of of carbon in those, yeah, making steel uh in a furnace is one of the most intense things you can kind of do. So anything you can do to recycle it, it's brilliant. Um so I guess turning back to New Bridge Street, um we were talking earlier about neighbours and Briam and well, and I think you're hitting all the high notes there, but maybe we could if think about neighbours for a second. It's just becoming more used in the UK. Um if you can maybe give an overview of neighbours and maybe some of the key points for 100 New Bridge Street and why it's coming out as a five-star neighbours.

SPEAKER_00

Sure. So um a brief introduction to neighbours. Neighbours very simply looks at the energy intensity of the building. Um you can't manipulate that. Um EPCs are a bit of a dark art. Um we know that they are done at the you know when a building completes and they don't need to be done for 20 more years. So you can do anything to that building in 20 years and you're not going to be checked. Yep. Neighbours is different. So the way that neighbours works is that you what's called, you do a design for performance. So you make a number of commitments for the design, so your metering strategy, um, how the building is going to be heated, cooled, what's the uh air strategy, um, and that goes into a document which is independently reviewed and along with very extensive modelling, which I won't pretend to be uh anywhere near an expert on. We very much lead that to our um to our consultant team. But we model the building in deference scenarios, so um how it might be used, what sort of tenants, what if the occupancy is at 100%, what if it's down at 40% to be able to um forecast what the energy consumption of the building is going to be. Um we talk about energy per meter squared, so take the total energy used for the building, divide it by number of meters squares, you get your energy intensity. And neighbours sets thresholds for the energy intensity that you have to meet to reach reach certain ratings. So um confusingly, uh neighbours is out of six stars. We're not sure why. Uh it's from Australia. Maybe, maybe that's something to do with it, who knows? Um, so it's out of six stars. Um we currently don't have any six star buildings in the in the UK. We don't even have any pipelines of six star buildings. It's incredibly challenging. Um, but at Hundred New Bridge Street, we are on track for a five-star performance. Um, so we have our kind of certified design for performance. So that means that we have provided enough evidence to the third-party um auditor to verify that our building has been built and designed to achieve a five-star energy rating. The next step is once that building is fully occupied, we will actually go and we monitor it.

SPEAKER_01

Which is where UPCs don't do.

SPEAKER_00

Exactly. And we um apply to neighbours on an annual basis. We provide our consumption data and we will be recertified every year for an energy rating. So it is it's much more onerous, it can't be manipulated, um, but the take-up has been really strong in the market. I think it's actually been the catalyst that uh has been needed for the market um to kind of take energy consumption seriously. Yeah. Um the hope is that the government perhaps might take note at some point rather than just hanging their hats on EPCs.

SPEAKER_01

But we're absolutely well, there's an EPC consultation on the moment, isn't there?

SPEAKER_00

So Yes, it's continually extending. Yes. We'll we'll see where we get to. But I think, you know, we know that EPCs don't really denote how sustainable a building is. Yeah.

SPEAKER_01

They I guess they work for the masses, but when you're getting down to something quite big and technical like this, you need something a bit more sophisticated, yeah.

SPEAKER_00

And I think their hope is that with neighbours, you know, energy prices are very volatile, um, usually in the wrong direction. Um being able to attract tenants with a building to say that no, this building is low energy. Here is the evidence it has been for certified, um, is an incentive for tenants to take our building over a lower performing asset.

SPEAKER_01

Absolutely. And I should say as well that you've uh uh your top well score and top BREAM score as well.

SPEAKER_00

So yes, yeah. Um yeah, we're on track for over 96% on BREAM, um pre-certified at design stage, um, which we're very we're very pleased with. Um and and likewise we're well we're on track to achieve platinum. Um the well certification, we only look at the shelling core because we won't be fitting the building out, um, but it will enable any future occupied to come and fit out their space to in accordance with well as well.

SPEAKER_01

Yeah, agree.

SPEAKER_00

There's a lot of wells in that sentence.

SPEAKER_01

There was, yeah. But there'll be work loads more before we get to the end, I'm sure. Um so it'd be good to just talk about, and I guess this is a smaller impact on carbon versus the recycled still, but still very important. Uh when we were there, we saw the the air treatment on floor rather than in the basement. And maybe if you could touch on how that kind of integrates into the sustainable.

SPEAKER_00

Yeah, so that that talks to again is the um operational energy and the operational carbon of the building. Um, and actually this is something that's kind of uh driven again by neighbours, is rather than having your air handling units down in the floor and it being pumped up to each of the floors, it's actually more sustainable to have smaller units on each of the floors. Uh means that you can zone floors very easily so that if an area is not being occupied, maybe it's Monday or Friday, you've got lower occupancy, you can just turn those units off. Whereas when you've got a central air handling unit, you know, it that's much more difficult to do. So we yeah, we're increasingly seeing that um more buildings are using that strategy versus kind of historically what would have been seen the new thing to do is now unfortunately seen as the more kind of energy-intensive, carbon-intensive thing to do.

SPEAKER_01

Hindsight's a wonderful thing, isn't it? Uh, indeed, yeah.

SPEAKER_00

And it's difficult when you're uh and I guess this is the thing with sustainability, it it's so rapidly evolving. And the design process of a building can be you can be in planning for 18 months, you can build it for three years. So you you have to have some sort foresight into what's coming down down the track to stay relevant and competitive and ensure that you're delivering a building that is still, you know, meets the demands of uh of you know the day that it's delivered.

SPEAKER_01

And makes costing them uh a bit of a nightmare as well, I'm sure.

SPEAKER_00

Yes, yes. Luckily I don't have to get involved too much with that, but yeah.

SPEAKER_01

We'll leave that to the finance, Scott.

SPEAKER_00

Exactly.

SPEAKER_01

So maybe if we could turn to the tenants or purchases. So when you are thinking about potential tenants and potential purchases, how much does sustainability feature in the conversation?

SPEAKER_00

Do you know what? We see a real mix of tenant appetite for sustainability. Um I'd love to sit here and say that every tenant is really engaged. That isn't the case yet. I suspect that is partly the landscape of London tenants. We have a massive variety of types of businesses, businesses from all over the world where sustainability isn't as high on the agenda. Europe is way ahead of America and even more so than Asia. Yeah. Um so we have some tenants that are incredibly motivated. Um, you know, we have RFPs come through where we have to provide sustainability information for them to even come to look at the building. Yeah. Okay. Um we have other tenants that it's kind of a corporate requirement, but actually when you get them into contract, funnily enough, their passion for sustainability dwindles somewhat. And then we have some that just don't want to engage whatsoever. Um, our hope with delivering sustainable buildings is that we get to attract all tenants. And ideally, the tenants that want to be able to they come to our building because they have a sustainable business model themselves. They want to drive their own energy emissions down. Um, and for them to be able to do that, they have to be in an environment that meets their needs as well.

SPEAKER_01

Yeah. And maybe for another episode of the pulpit, whether you can drive higher rents with uh higher sustainable standards.

SPEAKER_00

Yeah, we're starting we are starting to see it, it's been the question on the table for a long time. Um I've had countless discussions with our you know valuations teams um and consultants, and I think the the messaging is that it it is there. Um it's still difficult to price a green premium. Yep. I think it's easier to price a brown discount in some ways. Um but certainly, you know, we're seeing the rents for the top buildings which we we class ourselves among amongst at the you know the highest, certainly in the city, that we've seen in a long time.

SPEAKER_01

Yes, we need more evidence, don't we?

SPEAKER_00

I think basically and as again to backdrop of uh, you know, we haven't had a lot of evidence in you know in the capital market. We've not had a lot of we we're getting there with the leasing market, but off the back of, you know, a period that's been very stilted, it's been challenging. But I you know, I think as we see those transactions and volumes of transactions increase, the evidence is going to be. It's only gonna go in one direction, yeah.

SPEAKER_01

So I guess trying to wrap it up, uh, is there anything you would like to leave people with in in terms of sustainability um going forward?

SPEAKER_00

Sure. So um we don't have all the answers, but at Helical we are continuing to grow and to innovate. Um we take a lessons learned approach when it comes to sustainability. We look at what we did on a previous building and we look to improve what can we do better? Um it's challenging against you know current regulations and legislations. Um often what what legislation is saying goes against the kind of the principles of sustainability. We're finding um we're putting more into buildings to be able to meet part L, part O, part M where really we want to be taking stuff out. Yeah. Um so it it it's challenging, but I think the built environment is a really exciting place to work in sustainability. There's a lot of really interesting stuff happening in terms of availability of materials, the way we're designing buildings. Um we have incredibly engaged contractors, um, Mace on 100 New Bridge Street, uh, they're a tier one contractor. They are uh, you know, driving their own initiatives forward on the project, so we get to take advantage of those. Yep. Um, likewise working with the best architects, structural engineers, we're able to call on what we consider kind of best in class advice to ensure that we are, you know, at the forefront of sustainable design. Um I suppose the lasting message is that is at Helical, we want to be known for you know the leading London developer for, you know, beautiful offices that are great for the planet as well.

SPEAKER_01

I think that's all we've got time for today. Thank you very much, Lauren, for coming in. Please remember if you like the FA today, click like and subscribe.