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A catalyst for change – our 2020 year in review

Post by

Jim Connolly

Strategic Development Director

A catalyst for change – our 2020 year in review

2020 was tough and the industry definitely went through its share of hardships. But once the dust had settled, it was clear the damage wasn’t as profound as first thought. If anything, the pandemic was the catalyst the industry needed to accelerate change and opportunity in the market.

For instance, developers were already thinking about their carbon footprint and ESG responsibilities pre-Covid. But the conditions of the pandemic have just forced companies into bringing their commitments forwards and building for a greener future much sooner.

Both JLL and Landsec have announced programs to achieve net zero emissions across their entire portfolio by 2030 and many more businesses are following in their footsteps.

The public’s general relationship with property has completely changed. We’re much more demanding of our working and living environments – they need to have cleaner air, be greener, bigger, and more energy efficient.

Our changing attitudes have left developers and landlords with more stranded assets in their portfolio than ever before. They’re either below the appropriate EPC grade appropriate for rental, or the use of the building just isn’t what the community needs anymore.

But the industry is responding, and we’re already starting to see an exciting future for property development unfold.

Derwent finished their first net zero project in June. Designed by Make architects, it’s an example of an outdated property finding fresh life as a mixed-use development.

The build blends residential (including affordable living), retail and office space. It comes with a large roof terrace of 17,000 square feet with communal area and event space, and public pocket park on the ground floor.

It’s their first all-electric building. Meaning the heating and cooling comes from air source heat pumps powered by renewable electricity.

Derwent have also just agreed a five-year £300 million green finance facility with HSBC UK, Barclays and NatWest, which is to be exclusively set aside for sustainable projects.

Landsec are now moving ahead with Timber Square in Southwark – one of the first large-scale net zero carbon developments in the UK. They’re keeping one of the existing buildings to save on emissions and using recycled or natural materials throughout.

They’re then extending upwards with a brand new lightweight timber structure. Like Derwent, it’s designed with people’s health and wellbeing front of mind and virtually every floor has access to outdoor space.

For many of these schemes to take flight it will need insurance, regulatory and planning support to ensure the materials used are acceptable and I do foresee that this could be a barrier to progress in 2021 and developers will need to consider the risk of delay as they commission these schemes.

And with reports of many more developments of all stripes waiting in the wings, delays are a real potential problem. Sarah Chilcot, Managing Director of Planning Portal says planning applications are up 50 percent, with many housebuilders trying to push through proposals while the stamp duty holiday still remains.

However, it seems many may be left disappointed as the resource available in our planning authorities around the country is struggling to keep pace with the growing level of demand.

If we are to see the property sector make the contribution it should to the economic recovery, we’ll need to see improvements in the planning system and a good understanding by planners, regulators and investors of new building techniques that prioritise the environment.

After the positive way that the property market has responded to the pandemic, I’m cautiously optimistic that we’ll make big leaps forward on this in 2021.

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