EPIC Property Asset Management Wins Award For Sustainable Refurbishment Project
By Ed Gabbitas, Director, EVORA
In 2014, EPAM Ltd oversaw a comprehensive refurbishment of a 17-storey office building located in London, covering 101,000 square feet. The building had inherent inefficiencies as a consequence of the 1970’s design and fabric construction. These inefficiencies were clearly visible and the asset was performing poorly against industry energy benchmarks. Utility costs were also high; in 2013, electricity usage was 67% higher than good practice, as measured through the Better Buildings Partnership Real Estate Environmental Benchmark (REEB).
Summary of asset situation pre-refurbishment:
- A poor Energy Performance Certificate (EPC) rating of E, due to expire in 2018
- At serious risk of being unlettable post-2018 due to impending Minimum Energy Efficiency Standards (MEES)
- 94% of office leases due to terminate in 2014, leaving EPAM with an inefficient and unoccupied asset unless action was taken
In recognition of these risks, EPAM developed a forward-thinking mitigation strategy that delivered an attractive space for new tenants and delivered best practice sustainability solutions to improve environmental performance and reduce energy costs. A comprehensive sustainable refurbishment was completed throughout 2014.
Actions included the installation of the following technologies, among others:
- Modern efficient boilers
- LED lighting with intelligent sensor controls across all floors
- Intelligent lifts with regenerative (energy recovering) drives
- Retrofitting of modern variable speed fan coil units
- Installation of modern efficient air handling units
- Upgrades to Building Management System (BMS) controls and outstations
- Tenant and contractor engagement programme to agree and work towards common sustainability targets
- Detailed monitoring and targeting (M&T) programme to identify opportunities to deliver operational improvement
- Sharing of sustainability performance data (with tenants) on a monthly basis
- Active compliance management programme
The EMS was successfully deployed and certification to ISO14001 was achieved by EPAM in 2015.
The total project cost was £1.3 million and multiple benefits have been seen by both tenant and landlord.
The offices are now fully let (80% new leases by NLA) with an average rent uplift, compared to pre-refurbishment, of 30% with 14 floors let on 10-year leases within 12 months of refurbishment.
The projected 10-year energy cost saving (aligned to lease length of new tenants) is estimated at £2.2 million. These factors have resulted in a significant valuation increase.
The building is now using 35% less electricity and 16% less gas, equivalent to in excess of £85k annual saving, which is received in full by the tenants. The projected 10-year carbon saving (aligned to lease length of new tenants) is estimated at 14,000 tonnes CO2e.
A monitoring programme tracking targets and associated performance using EVORA’s proprietary sustainability software, SIERA, is supporting further reductions in energy consumption.
In addition, the EPC rating of a refurbished floor has improved from an E to a C. This improvement aligns the EPC rating with occupier expectations for efficient buildings, whilst also eliminating the risks posed by the upcoming MEES legislation.
Occupiers now have first class shower, changing, storage and drying facilities. This has helped encourage active transport to commute to work, delivering health benefits to tenants and easing congestion on roads.
Overall, this project has clearly demonstrated the value that sustainability can deliver to real estate assets. The project has delivered on all three core strands of sustainability; economic, environmental and social.
The lessons learnt have become a standard approach for EPAM to consider for future refurbishment projects.
"I have worked with EVORA for almost five years now, having initially appointed them following a review of providers. I firmly believe that EVORA are leaders in their field and they have opened my eyes to the value that a proactive approach to sustainability can bring."
Rob Hall, Managing Director, EPIC Property Asset Management