Rebuild or retrofit:
the environmental case

HOW SHOULD THE PRINCIPALS OF CIRCULAR ECONOMY AND WHOLE LIFE CARBON INFLUENCE OUR DECISIONS ON HOW WE IMPROVE RETAIL ASSETS?

WHOLE LIFE CARBON – THE BASICS

Traditionally, the property industry has measured the performance of buildings using compliance tools, such as Energy Performance Certificates (EPCs), because they’ve been the most widely understood and accessible metric, and the industry standard for comparison. The industry has focussed on understanding and reducing the operational carbon and cost without looking at reducing material use at the same time. Moving towards a zero-carbon future has clarified our thinking on different metrics and methodologies. The industry now looks at how buildings are made, how they are operated, and how they can be re-used before their disposal.

This is where Whole Life-Cycle Carbon (WLC) emissions fall into place as WLC provides a true picture of a building’s carbon impact on the environment. WLC emissions are operational and embodied emissions over a building’s entire lifecycle. Embodied carbon is the amount of carbon emitted during the construction, use, and end of life stages of a building, e.g. the extraction of raw materials, the manufacturing and refinement of materials, transportation, installation, and the use of a building over its entire life, including its demolition and disposal. Operational carbon is the amount of carbon emitted once a building is in use. Real estate is responsible for 39% of annual carbon emissions – operational emissions account for 28% and the remaining 11% is attributed to embodied carbon of new construction; or to put it another way embodied carbon accounts for almost 30% of property emissions.

Although both the refurbishment of existing buildings and the construction of new ones have the potential to significantly improve the life cycle impact of buildings, it’s not always a clear-cut choice between the two options. And this is applicable to any type of use, i.e. office, retail etc.

THE BENEFITS OF REUSE

When is it better to reuse and when is it better to redevelop? A major refurbishment can reduce operational carbon emissions considerably by upgrading the fabric and providing equivalent building services to newly built standards. At the same time, it can cut embodied carbon emissions significantly because a big part of the embodied carbon emissions of a new build are associated with elements such as the sub structure, upper floors, roof, and frame, which should be retained at a major refurbishment.

On the other hand, new buildings have a better potential for improving operational efficiency as the result of better design and less constraints, i.e. form factor, window-to-wall ratio, passive design measures, energy efficiency measures etc., while new standards and tools can reduce the embodied carbon emissions.

Carrying out a WLC assessment can be used as a tool for assessing the carbon impacts of design options, alongside other factors such as cost, to select which one is more carbon efficient. For instance, measuring the upfront carbon at each stage of the construction will involve breaking a building down into its elemental parts and applying carbon emission factors to the quantities of each element. Take, for example, a building’s superstructure: a conventional frame would result in emissions of 500 kgCO2 e/m2, with a frame that includes timber would result in 350 kgCO2 e/m2, providing significant savings. Following such a methodology, one can assess whether a refurbishment or a replacement is the more environmentally and economically responsible option.

A WLC study for a new build 320,000 sqft shopping centre in Hampshire, produced by Sturgis compared three scenarios over a 60-year period:

A new build where at years 20, 40 & 60 there will be a major refurbishment where the main structural elements are retained.

A full new build at years 20, 40 & 60 with all new materials.

A full new build at years 20, 40 & 60 that includes for a substantial proportion of on-site recycling of structural members, cladding and other materials.

* Note that at years 10, 30 & 50 there will be a partial refurbishment for all scenarios.

Overall, the findings suggest that the first scenario is the most efficient in carbon terms.. The difference between the first and the second scenario, i.e. a refurbishment cycle over twenty years against the full demolition and rebuild is 59%, whereas the difference between the first and recycle and rebuild is only 23%. This clearly shows the carbon benefits of designing for and undertaking wholescale recycling.

For the last few years, the Greater London Authority (GLA) have been investigating how to best approach WLC. Today, they’re progressing WLC assessments as part of their planning policies for all developments. Several other local authorities in the UK are following GLA’s example and are also now implementing such policies. In addition, due to the significance of this issue, members of the property industry have written Part Z1 and its accompanying Approved Document Z as a proof of concept for the regulation that’s needed in the UK. This has now gained traction and has been introduced to Parliament. If enacted, Part Z would ensure that embodied carbon is assessed on all projects, as part of a comprehensive whole life carbon assessment.

CIRCULAR ECONOMY MATTERS

The evidence is clear: if we’re to stay on a net zero carbon trajectory for the for the lifecycle of buildings, we must change our approach to design, material selection, and use. We need to think of buildings as an evolving process, we need to change our attitude from ‘take-make-use-discard’ to ‘remake-reuse’, and we need to design for dismantling. In other words, we need to facilitate the transition towards a circular built environment.

Circular economy stands in contrast to our current linear system; where materials are mined, manufactured, used, and thrown away. It describes an economic system based on business models that replace the ‘end-of-life’ concept by reducing, reusing, recycling, and recovering materials in production, distribution, and consumption processes.

Retailers and their buildings are no exception to this. Whether during refurbishment or redevelopment we need to consider what materials can be recovered and reused. In the recently redeveloped St James Quarter in Edinburgh, Nuveen have diverted almost 99% of site materials from landfill, with a significant proportion of concrete being recycled and reused within the new scheme. Good design has also been adopted to optimise natural light and ventilation to reduce operational carbon. This has helped Nuveen achieve an Excellent BREEAM In Use Certification.

Circular economy principles can also be applied to retail products. By producing fewer goods that are more robust and last longer, and in turn renting or reselling these, the use of natural resources is reduced as products become the resources. Such principles will become more and more common when regulations that forbid the destruction of goods that haven’t been sold come in place – already legislated for in France on January 2022. Similarly, such principles can be applied to the components of retail buildings where fitout components like floor or ceiling tiles can be rented or re-sold at the expiry of the lease instead of ending in landfill.

Designing with future flexibility and adaptability in mind, and building in layers, is also key. Our designs should assess the ability of the development to accommodate change, the frequency of reconfiguration and remodelling, and how to avoid a premature end of life for all components. Designing a retail unit or a shopping centre to be easily adaptable to a different type of use in the future, such as a commercial office or residential space, from the outset is essential to ensure the carbon impacts of such alterations (fabric, services, layout etc.) are not significant.

INNOVATIVE THINKING

Our industry doesn’t have all the solutions readily available. Technology and innovation technology have a great role to play in this transformation, as they will help us to learn and develop. For example, 3D printing could be used to print a building’s components and, as such, reduce significantly material wastage. Meanwhile, printers could be deployed on or near to the site and consequently reduce transport emissions. Artificial Intelligence can improve efficiencies to drive energy consumption down; by inputting data on equipment energy usage, indoor and outdoor temperature it can precisely determine the ideal set points and schedules for heating, cooling, and lighting equipment, and provide great savings.

Of course, the argument for rebuilding can go the other way. Many retail schemes are unfit for either future retailing requirements, or the space requirements of alternative uses where repurposing projects are being considered. We know more about how properties should be designed for the next fifty years than we did fifty years ago and, some would argue, correcting the mistakes of the past and make more efficient places requires redevelopment. However, if we always take this approach we will be adding to the problem not solving it and who’s to say in half a century we’ll have got it right? Fortunately, many retail developers and investors are starting to think through the lens of circularity, but the adoption of whole life carbon principles are very much in their infancy and need to be more widely implemented.

Climate change has made us think about how we design, build, and operate our buildings in a different and more holistic way and emphasised the need to achieve net-zero emissions. As such, it’s raised the challenge and a considered and strategic approach is now required. Our response can’t be fragmented and we should follow whole life carbon and circular economy principles when designing our buildings to ensure their useful lifetime and resilience are extended.

1Part Z, Whole Life Carbon (https://part-z.uk/)

“Embodied carbon of new construction accounts for almost 30% of property emissions; as energy efficiency and grid decarbonisation drive down operational emissions the balance will shift even further to embodied impacts”

OVERVIEW OF CARBON EMISSION SOURCES ACROSS THE REAL ESTATE INVESTMENT LIFE CYCLE