Is Manchester Office Property Ready To Take A Baseball Bat To Sustainability Problems?

The property industry is trying hard to meet demanding environmental and social standards. Public authorities and the construction industry are not always helpful.

That was the message from Bisnow's Manchester Office Sustainability and Tech event, held at the city’s Principal Hotel, Oxford Road.

A panel including Bruntwood Development Director Aisling McNulty, Hermes Executive Director Ben Sanderson, FORE Partnership Managing Director Basil Demeroutis and Cundall Managing Partner Paul Kenyon argued that property was learning to embrace new social and sustainability targets. But in discussions led by Hillbreak Founding Director Jon Lovell, they pointed to a lack of support from other parts of the real estate business.

In particular, panellists criticised the Greater Manchester Spatial Framework for using imprecise language, contractors for their conservatism, and regulators for devising sustainability targets that did not measure energy consumption.

Hermes' Sanderson said developers were changing their approach.

“Increasingly the occupier view and the investor view have aligned, as everyone has acknowledged the simple premise that sustainable real estate delivers better long-term returns,” Sanderson said.

“We’re now seeing that attitude extend from environmental impacts into social impacts and governance aspects, all of which also has consequences for long-term value. There is now data that shows you simply have less capital expenditure on buildings with more sustainable characteristics.”

Bruntwood's McNulty agreed that developers and landlords now see the financial upsides to going green.

“Low carbon buildings will, at some point, have some kind of value adjustment upwards," she said. "Clearly these issues will have an impact on values. Higher returns today, and perhaps in the long-term they will be worth more.”

However, Cundall's Kenyon took a swipe at the cloudy language and targets sometimes set by the public sector and by regulators.

“Part of the problem is that occupiers don’t really know what sustainability in a building means. The industry responded with the BREEAM designation, but increasingly we’re hearing people say that is not what they want because it ignores issues of power origin, and talks about energy efficiency not energy use. I think we will have to embark on a massive step change over the next decade,” Kenyon said.

Pressed by moderator Jon Lovell if change would be “badges and fixes” rather than real solutions, Kenyon added: “We are starting to see organisations like RIBA and RICS set the new benchmarks we will need in the next decade, but we are not yet seeing a lot of changes to development projects.

“We need to design buildings differently. To insist on electrical power because it will adapt better than gas, to use less glazing, to find new materials, to fix the problem that offsetting can be cheaper than low energy solutions which is the kind of thing that is not going to promote good behaviours."

FORE's Demeroutis pointed to inflexibility among contractors.

“Supply chains are a mess," he said. "I can’t tell you how many times I’ve asked about recycling or materials and I get empty gazes across the table saying, we’ve never done it like that before. It’s just not acceptable. Sometimes I want to take a baseball bat to the industry, but a baseball bat may not be big enough.”

If office buildings are, slowly, getting more sustainable as energy consumers and carbon producers, are they also getting more sustainable as elements in the complex social mix?

Here, too, panellists were looking for a clearer steer from public authorities and regulators, but were nonetheless making progress.

The property industry is trying hard to meet demanding environmental and social standards. Public authorities and the construction industry are not always helpful.

Asked by moderator Jon Lovell if the Manchester office market was beginning to grasp the changing social needs of office development, Demeroutis said “We’re starting to.”

“There’s an increasing focus on the low carbon economy, but also on how what we do impacts on social equality, gender equality, homelessness, food poverty and I think there is a genuine effort by the property business to move these issues out of individual silos and see that they are all one-in-the-same issue,” he said.

At the 80K SF Windmill Green development in Central Manchester FORE had tried to provide amenities which were not just amenities for occupiers, but which can “shift outcomes” in other social registers.

Hermes is adopting a similar approach at the mighty NOMA development to the north of the city centre, Sanderson said.

“We’ve begun the process of benchmarking, of measuring the social indicators we want to shift by the development. This is the same as the process by which we got seriously involved in environmental standards by measuring things like carbon outputs. This is a slow-moving process but we’re looking at issues like education, training, opportunities for work which is hard, because sometimes we will fail, just like buildings sometimes produce negative returns.”

Bruntwood’s McNutly shared Demeroutis' fondness for improvised weaponry.

“For us it's very much for developers to use a stick," she said. "So we write into contracts that for every so-much spent we need to see so-many new apprenticeships. And we look at things like job yield and how we are bringing forward skills analyses and filling local skills gaps.”

A firmer lead from the public sector would not be unwelcome, the panel agreed. 

“There is a lot of confusion in documents like the Greater Manchester Spatial Framework," Kenyon said. "It uses lot of different expressions — carbon neutral, net zero carbon, zero carbon, it’s just very mixed up. It is important documents like this set out what they really mean, because we all need to adopt the same standards.”

Is the property industry about to endure a moment of sudden change on sustainability: the equivalent to the rapid turn against plastic straws and carrier bags? Sanderson thought the process may already have begun.

“The worldwide concern about office lights being left on overnight was maybe our plastic straw moment. It’s a ridiculous waste of energy and now everyone is conscious in a way they never were,” he said.