Social Housing Retrofit Loan
We’ve partnered with NWF to give Social Housing businesses valuable funding to complete retrofit works, supporting in cutting carbon and energy bills.
Navigating Sustainable Retrofit in Real Estate
What are the challenges and opportunities for real estate businesses?
Sustainable retrofitting is not just a response to evolving regulations and the increasing demand for greener, more efficient spaces; it is a strategic imperative with both immediate and long-term benefits.
Head of UK Real Estate, Barclays Corporate Banking
Sustainable retrofitting can help drive value creation through reduced operating costs, enhanced asset value, and improved occupancy rates. This report provides timely and critical insights into how sustainable retrofitting can accelerate these efforts, help to mitigate stranded asset risk, and enhance long-term value.
Recognising the complexity of the real estate ecosystem, this report was commissioned by Barclays and undertaken by Baringa in collaboration with JLL, Travis Perkins and TrustMark. Together, we have combined expertise across finance, real estate advisory, consulting, supply chain, and certification to provide you with a holistic view of sustainable retrofitting challenges and strategies.
Our report features three main sections
The fundamentals of sustainable retrofitting
In 2019, the UK set a legally binding target to achieve net-zero carbon emissions by 20501, with an interim goal of a 78% reduction by 20352. To meet these targets, the built environment has been identified as a critical sector for decarbonisation, currently contributing 17% of the total GHG emissions across the UK3.
The real estate ecosystem is adapting to drive sustainability from multiple angles. Collaborative efforts across stakeholders are helping to overcome barriers and accelerate progress toward a more sustainable sector.
Here at Barclays Corporate Banking, alongside our other sustainable financing solutions we're offering a solution that specifically supports retrofitting for not-for-profit registered providers of social housing – find out more about our Social Housing Retrofit Loan below.
What are the challenges of retrofitting?
Sustainable retrofitting often encounters various challenges across both commercial and residential real estate sectors. The top five barriers across all sectors were identified by our survey respondents as:
Supply chain challenges
These are issues related to the management and execution of retrofit projects.
Funding availability
These are obstacles related to the cost of retrofitting and securing funding.
Business scale
Smaller businesses often face challenges to retrofitting e.g. securing funding.
Access to skills
There is a shortage of skilled workers and professionals for retrofitting.
Securing buy-in
Managing multiple stakeholders can be challenging and can introduce complexity.
Long term planning: enabling successful retrofits
One of the best ways to embark on a sustainable retrofit journey is to start with a plan. A strategic building plan (SBP) can offer a holistic view of a building's operations and management over an extended period. It integrates sustainability into the operational framework, helping to facilitate a smooth transition towards net-zero status. A well-constructed SBP should include several key elements to streamline the retrofit process:
Sustainability goals and targets
Clearly defined sustainability related goals, such as carbon emissions, energy use, and water consumption targets that align with your organisation's overall strategy.
Regulatory compliance
Identify current and anticipated regulations, building codes, and sustainability standards to ensure ongoing compliance.
Customised building needs
Tailor the plan to the specific requirements of each building, accounting for its type and unique operational needs.
Tenancy considerations
Schedule major upgrades and retrofits to coincide with lease expirations to minimise disruption and optimise vacancies.
Integrated maintenance
Align sustainability with regular maintenance schedules, such as opting for a heat pump when replacing a boiler.
Communication and reporting
Maintain transparency with stakeholders through regular updates on progress, savings, and lessons learned.
Key takeaways
Sustainable retrofitting is essential and urgent
Retrofitting existing buildings is critical to reducing carbon emissions in the built environment. Approximately 80% of today's buildings are expected to remain in use for decades, and retrofitting rates need to triple from 1% to 3% per year, underscoring the need for immediate action to upgrade these assets in line with net-zero targets.
Sustainable retrofitting makes strategic sense
Sustainable retrofitting is more than a compliance measure; it represents a strategic approach to enhancing the value and performance of assets. By proactively adopting retrofitting practices, building owners can reduce operating costs, increase asset value, and retain long-term competitiveness.
Effective practices for sustainable retrofitting
Embarking on a sustainable retrofit journey can be overwhelming due to the complexities, barriers, and challenges involved. However, this shouldn't prevent you from taking the first step. Some practical approaches to help navigate this path include simplicity and planning, specialist support and data driven decisions.
Collaboration is key to success
Collaboration among stakeholders can be key to the success of sustainable retrofitting projects. From landlords and tenants to financial institutions and local councils, fostering a collaborative environment is essential. Transparent communication, shared goals, and aligned incentives can help overcome challenges, drive innovation, and ensure projects are completed successfully.
Act now to secure future competitiveness
The time to act is now. While the path to sustainable retrofitting may present challenges, early action can help with future-proofing assets, reducing carbon footprints, and maintaining competitiveness. Embrace the opportunity to lead the transformation of the real estate sector into a force for positive, sustained, change.
Getting the right support
Starting a sustainable retrofit is a complex journey but navigating it should not have to be done in isolation. Expert guidance is never too far away, with support available from a range of industry bodies.
At Barclays Corporate Banking, we’re here to support your journey towards decarbonisation. By discussing your retrofit plans with us, you can explore a range of financial products designed to support your sustainability goals.
Contact us
Get in touch
To discuss your business requirements and how Barclays can support you, contact us today.
About the research
This report is enriched by data from a recent market survey of 250 UK professionals across sectors including offices, retail, institutional residential organisations, social housing, industrial operations, and data centres. The research provides key insights into the challenges, opportunities, and practical solutions being experienced by landlords and owners today.
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1 Department for Business, Energy & Industrial Strategy. (2019, June 27).
2 Climate Chge Committee. (2020, December 9).
3 Department for Levelling Up, Housing & Communities. (2023, July 13)
Success in action
A future proof strategy
Find out how Manchester International Office Centre have benefitted from the impact of sustainable retrofitting, future proofing their property whilst maintaining its value.
Your next steps
Social Housing Retrofit Loan
We’ve partnered with NWF to give Social Housing businesses valuable funding to complete retrofit works, supporting in cutting carbon and energy bills.
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