It is a perfect example of profound changes that are taking place in the UK’s property investment market: retrofitting.
Retrofitting is vital because, as you might know, some 40 per cent of the emissions that cause climate change come from the buildings we live, work, learn and shop in.
Retrofitting buildings is now a very significant component of the investment approach taken by a real estate fund manager.
Most of these buildings are still going to be around in 2050 – up to 80 per cent, according to some analysis.
Add these two realities together and there is a pressing need to upgrade the UK’s buildings to the required environmental standards.
Commercial property makes up around 13 per cent of the total in this country, and it is the sector our real estate fund members tend to specialise in.
If we focus on that 13 per cent for a moment, what you have got there are offices, logistics (such as those huge sheds you see from the motorway), and a wide variety of retail – from high streets to out-of-town centres.
Retrofitting these buildings, with an eye on net zero, is now a very significant component of the investment approach taken by a real estate fund manager.
They will focus on a wide range of tactics, from new cladding, heating, ventilation and air-conditioning to helping building facilities managers operate their buildings in the most effective and efficient manner.
Significant social and environmental gains are also there to be made.
Such work has been going on for well over a decade. Across the pond, the $13.2mn (£10.7mn) retrofit of the Empire State Building started as far back as 2008.
Closer to home, the old headquarters of former high street behemoth Woolworths is currently undergoing a vast refit, which includes best-in-class sustainability principles.
Currently, hundreds of buildings in the UK will be having legacy materials ripped out, recycled and replaced with modern systems, materials and processes.
Retrofitting is so vital to modern property investment, that part of any shares or units in a property fund held by your clients will almost certainly be used to fund such changes.
Moreover, and thanks to a whole-of-life approach by fund managers, your client’s investments will almost certainly already be reaping the benefits of lower energy expenditure.
But that is not all.
Such expensive changes are coming at a time when wage growth lags inflation badly.
The energy efficiency rating of any investable commercial building is now an essential part of the valuation process.