In this series of interviews with our Management Board, Workman’s leaders share their plans and vision for the future within the UK’s rapidly evolving property industry.
Here, Richard Taylor, Partner, and the firm’s Head of Building Consultancy, outlines the challenges and opportunities presented by today’s commercial real estate market.
What are your priorities for Workman’s Building Consultancy?
Ensuring our clients’ assets remain effective in a changing world is the overarching priority. To meet this, we are constantly reviewing the capability and specialisms within our team to stay ahead of the rapidly evolving market.
We have recruited a new head of Technical Due Diligence (TDD), Mark Fazal, who has been instrumental in refining our approach to investor-focused TDD. We have grown our Fire Advisory Group under the leadership of Steven Rodd in response to welcome post-Grenfell legislation and associated emerging best practice. Our project division, Venture, has a new lead in Ben Kearns who brings highly efficient practices and rigour to the service.
We consistently drive efficiency to streamline and improve every service across our four core sectors of retail, office, retail, industrial and residential and our core four service lines: project management, building surveying, technical due diligence, and development support.
In line with this, we continue to benefit from the property management and building consultancy interface that Workman offers, which is fairly unique and allows us to deliver that marriage-value to our clients. A day-to-day knowledge of the service charge code, lease terms and tenant requirements, saves time and increases output.
What commercial value does Workman Building Consultancy add for investors?
Technical standards are increasingly important to our institutional investor clients. Today’s institutional red lines are driving up standards quicker than statutory requirements. Fund managers are more conscious than ever that market confidence in a building’s standards is directly linked to its future liquidity. Therefore, they are keener than ever to ensure that standards are exceeded wherever possible.
Our overriding priority is understanding our clients’ business plans. Understanding and delivering against increasingly bespoke appraisal structures is becoming an increasingly important part of our role in the often-complex development monitoring and funding agreements where we are assisting our clients.
How is Workman developing the skills within its Building Consultancy team to stay ahead of investor requirements?
Annually Workman consistently recruits and trains more than 60 graduates and apprentices across the business. Our training schemes are well-renowned and successful – not only in terms of delivering the best new talent for Workman and its clients – it’s also our responsibility within the industry to train top talent and prepare them for not just the world of surveying but life in the commercial property industry.
Beyond the technical training delivered through the APC, we have developed our training around specific commercial topics. Agreement for lease management, differing funding structures, and enhanced technical expertise, are areas of focus. Partnering with clients, external professionals, contractors, and suppliers is the best way to provide the depth and breadth of training the industry now needs. The emerging backdrop of issues such as increasing interest rates, changing technical standards required for funding, and hardening ESG aspirations.
What are the market factors driving investor priorities, and how is Workman helping clients achieve their goals?
From my perspective there are four main market factors which lead our investor clients to our door…
ESG: Within this, environmental opportunities are often a priority for building consultancy work. Our clients know that we work hand-in-hand with our expert Workman ESG team to ensure that each project is delivered to according to stringent embodied and operational carbon modelling processes. Through our ESG Project Advisor service, we ensure that we achieve the best outcome for each project, according to its individual needs, be it Whole Life Carbon Assessments, energy in use, NABERS, BREEAM or Passivhaus.
Diversification: all our institutional investor clients have diversified their portfolios, and where they have entered markets that are newer to them, we have proven well-placed to deliver advice and be the bridge between institutional requirements and what may be a relatively unfamiliar or niche sector.
Occupier requirements: Occupiers are operating within highly competitive employment markets where attracting the best talent is the overriding priority. This has driven the need to deliver innovative, amenity rich, sustainability leading space. Keeping close to agents, clients and occupiers has given us the foresight needed to give the right advice at the right time to balance strategy with return.
Fire safety: Prior to the Building Safety Act, we had developed what is now a mature and experienced specialist fire safety advisory team. While safety is the priority; liquidity is the lever to push the improvements needed to bring assets to the right standard.
What impact will the new Building Safety Act rules have on the industry as a whole?
The Act is intended to improve both safety for residential buildings and ongoing resident communication, with rules set out by the Building Safety Regulator. The Regulations, outlined here by Steven Rodd, Partner and Workman’s Head of Fire Safety Group, apply to all new or existing occupied residential buildings in England over 18 metres high or seven storeys or more, which contain at least two residential units. According to government estimates, there are 12,500 such buildings which require registering.
While the new regulations relate to residential buildings, we predict that these new requirements are also likely to push up standards within commercial property. Although hotels remain out scope of the BSA, we have seen these brought into the definition of “relevant buildings” under the amendments to Approved Document of the Building Regulations in December 2022; this means that new build hotels over 18m in height will have to be constructed with external walls materials attaining A2s1d0 or better, i.e., non-combustible materials.
There is certainly pressure from institutional investors to make sure standards are as high as they can possibly be. So these kinds of changes could get pushed into reality, which why we have our Technical Due Diligence lead, Mark Fazal, and our Fire Safety Advisory Team, with specialists like Steven Rodd, on hand for client advisory needs.
How will the shift towards retrofit move the property industry to a greener and more profitable future?
Respecting our built heritage and our built environment is something that we should all be doing. If there is a solid building, why dispose of serviceable components? Most buildings are made to last, and the architects who originally designed them had pride in what they created.
The first thing we should ask is what we can learn from the past? Something we have learnt over many years of delivering retrofit projects is that buildings are inherently flexible; if you have the right team who have a can-do attitude and collaborative mindset.
Indeed, retrofit may be a current buzzword for the industry, but it’s not new to Workman. We’ve been running retrofit projects for 40 years and our skills have been built on this kind of work, although in the past it has not always been viewed as a route to achieve environmental gains.
But now, finally commerciality and ESG responsibilities are becoming aligned, and there is great appetite among investors for retrofitting buildings to meet ESG goals, while also delivering financial gains.
Looking to the future, what are the most important developments in building technology and how are they changing the capability of the Building Consultancy team at Workman?
Technology has changed everything; twenty years ago, making an old building energy efficient would have been a challenge. Today, with technology such as our own intelligent Building Operating System (IBOS), achieving major savings in energy costs and delivering ESG goals have become achievable with the right expertise. IBOS typically takes around two days to install, with data accessible within two weeks and energy savings of at least 15% usually identified within the first three months. Across the 4m sq. ft of property where IBOS has been installed so far, average reductions in energy consumption of 20%-40% have been recorded within the first 12 months.
Of course, IBOS is just one example of Workman’s investment in building technology, both for our clients and in terms of our own operational efficiency. AI is already part of this strategy, with the use of digital twins to model and project how a retrofit will run, as well as making a huge impact on day-to-day building automation. We continue to embrace AI and building technology across the business to make us more efficient, like any tool.
We exist to create sustainable value for our clients and our people, in a way which has a positive impact on our community and the environment. To do this we must continue to invest in our people, embrace innovation, bring greater efficiency, and adapt to market change.
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