Flexibility in building design

Flexibility in building design

When it comes to listed real estate companies, we in responsible investment are not keen on new construction projects in developed real estate markets from an embodied carbon perspective. Embodied carbon comprises up to 11% of global emissions, making renovation of existing space the preferred option. The International Energy Agency (IEA) estimates that 80% of the 2050 real estate stock already exists. We believe we should maximise this percentage. Meanwhile, for the remaining 20%, it is important to make sure optionality of use is incorporated from the start; it will prevent economic obsolescence by providing for flexibility in use when use-requirements change.


Demand for different types of real estate space changes over time and might not always move to the same degree or in the same direction. Office space tends to follow a cyclical rise and fall in demand linked to economic growth, while residential markets might follow different drivers (such as urbanisation or immigration) at a certain time. This results in unwelcome vacancies in certain assets while shortages continue to exist in other asset classes.


To get the maximum - and thus most efficient - use of existing space over the technical lifetime of buildings we should be designing them with maximum flexibility-of-use in mind. Such considerations need to be incorporated right from the planning and design stage. Ideally, any change of use would be achieved with minimal changes to the building’s interior. The main construction would not need to change, limiting the need for additional construction and thereby less embodied carbon would be released.  


An example of how uses are unintentionally ‘locked-in’ at the design stage are the choice of elevators. For instance, in a tower with separate floors for retail, office, and residential, currently there could be three separate banks of elevators to service each set of floors separately. An increase in the demand of residential space could normally be solved by converting some of the office floors but would involve substantial elevator restructuring. In this case a solution from the start could be an innovative elevator system that allows for a single group of elevators to serve multiple portions of a building with the flexibility to change use types, floor by floor.


It obviously does not stop there. Often, office to residential conversion is hampered by the large floorplates of office space enabled through the invention of modern HVAC systems. The large floorplates mean the inner parts of office buildings are too far from windows and natural light to be suitable for residential use – both in terms of occupant preference and building codes and regulations.


There are many further examples to improve flexibility of use, which regrettably have not been prioritised in the past. The US, in particular, is experiencing a hangover of the historic failure to design for flexibility. Office occupancy markets tend to be more cyclical in the US. As a result, the conversion of office to residential space has been a popular topic increasingly in the last 12-18 months, but often not feasible.


As my colleague has previously written, the greenest building is the one never built. We favour retrofitting or refurbishment over new developments. However, this needs to be possible, or at least facilitated for the future, if we do decide to build new. By maximising the use of these new buildings over their entire lives we get the most ‘bang for our buck’ with each tonne of embodied carbon from construction.


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Robin Honeyman Responsible Investment Associate

Robin Honeyman is a responsible investment associate in the responsible investment team.

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