Retrofit v rebuild

What do organisations need to know when considering whether they should retrofit or rebuild an existing asset? Chris Kerr looks at the issues.

Reducing greenhouse gas emissions, and carbon in particular, has become a huge issue for the planning system. Embodied carbon – the amount of carbon dioxide emitted during the lifecycle of a building – will, therefore, be an area of contention where any major demolition is proposed going forward.

M&S’s proposed demolition of their flagship Marble Arch store, and the Secretary of State for Levelling Up, Housing and Communities’ decision to refuse planning consent for it, was the first high-profile dispute on this issue, and although the decision was overturned, rather emphatically, by the High Court, it did raise a few key considerations for any organisation debating whether to retrofit or demolish and rebuild their existing asset.

The first thing to note is that, as it stands there is no presumption against demolition so the option remains on the table.

It is accepted that retention and refurbishment is typically a lower-carbon option than demolition and rebuilding, but this is not always the case.

A central issue in this particular case was what the National Planning Policy Framework (NPPF) says or does not say about prioritising retrofit over demolition. The provision at the centre of the debate was the then Paragraph 152 (now 157) of the NPPF, which says:

“The planning system should support the transition to a low carbon future in a changing climate, taking full account of flood risk and coastal change. It should help to: shape places in ways that contribute to radical reductions in greenhouse gas emissions, minimise vulnerability and improve resilience; encourage the reuse of existing resources, including the conversion of existing buildings; and support renewable and low carbon energy and associated infrastructure.”

The Secretary of State Michael Gove interpreted this to mean that “there should generally be a strong presumption in favour of repurposing and reusing buildings”, and in doing so, concluded that M&S failed to support the transition to a low carbon future, and would overall fail to encourage the reuse of existing resources (including the conversion of existing buildings).

Mrs Justice Lieven, the judge in this case, disagreed. She said Gove had “not applied the policy” but in fact “rewritten it”, and that this led him to place an unjustified “policy hurdle” on M&S’s proposals. She said that while the NPPF does provide “some encouragement for the reuse of buildings”, there is nothing in the wording “that comes close to a presumption” in favour of retaining and reusing buildings.

All of that being said, going forward organisations are going to have to justify why a demolition is a better option that retrofitting.

A number of local authorities are already introducing retrofit first policies as part of their local plan. For example, the City of London’s draft Local Plan is pursuing a net zero carbon City by 2040 and expressly states that it will take a retrofit first approach to development. The City of Westminster is consulting now on a similar policy.

Demolition could be justified if the rebuild has the potential to produce a building with greater performance and sustainability or because the building is no longer fit for purpose (or is financially unviable for refurbishment).

Demonstrating greater sustainability is going to be very challenging.

Any organisation considering whether to demolish an existing building will need to do greater due diligence on the carbon payback period (the point in which the carbon savings generated from greater building efficiency meets the level of emissions which were released during the construction phase), and whether it can be concluded that over the life of the building the rebuild would use less carbon than any refurbishment. That is a difficult calculation to make. If this can be demonstrated, there is more weight in the argument to allow for demolition/rebuild.

In the M&S case, the carbon payback period was estimated to be 11 years, a number that the Planning Inspector agreed with, although he acknowledged it was no surprise there was disagreement over the figure, given that the understanding of Whole Life Carbon (WLC) assessments is still developing. Various technical standards and methodologies have been developed to measure a building’s embodied carbon footprint however, such as the RICS Whole Life Carbon Assessment for the Built Environment and the RIBA Guidance on Embodied and Whole Life Carbon Assessment for Architects – both of which add some credibility to the calculations being made.

Another option is to demonstrate that the building is no longer fit for purpose and that refurbishments are not viable.

The case for demolition/rebuild will also be stronger if it can be demonstrated that a building is no longer fit for purpose and that, if they can be made at all, any refurbishments are not viable. In this case, M&S explored 16 different retrofit options. The planning inspector agreed with M&S, concluding that deep refurbishment was not viable for them and that if the planning application to rebuild was refused, it would lead to the store closing with adverse impacts on the vitality and viability of the area as a whole.

It should be noted that the Secretary of State disregarded M&S’s calculations around both whole life carbon savings and the lack of viability of the refurbishments, citing the fact that sufficient comparisons had not been made or alternative options explored. The Court held that whilst the Secretary of State was free to reach those conclusions, he had not provided a clear or full enough explanation behind his decision to do so. This is important as it provides some assurance to companies that go through the process of doing an objective analysis, that if they conclude the best course of action is demolition, then their reporting will go through the correct processes.

Chris Kerr is head of ESG at Davitt Jones Bould.