Developers Need to Adapt Post-coronavirus

Office Market

Sustainability accreditation from an independent, third-party organization such as the U.K.-based BREEAM, the U.S.-based LEED and, increasingly, WELL, is now the norm for development in the Hungarian and Central European office markets and, increasingly, in other market sectors such as logistics.

Nordic Light Trio

This brings in issues regarding the requirements of staff and the working environment and usage of space, the use of energy and CO2 emissions, construction materials and relationship to the wider urban environment and community.  

These issues are integrated into the design and concept of a project in reaction to environmental concerns, market pressures and now the need for preventing the spread of viruses and the necessity of adapting to changing working practices and use of space. Despite questions over the financial viability of development, office and logistics projects are going ahead.

With developers striving to deliver ever more highly specified and sustainable office complexes, interior and exterior design has essentially become part of the same process and property management concerns are also now part of building design.

“Developments without sustainable solutions are not competitive on the market, as the tenants always consider this issue when they move into a new building. Our company is responsible for the PM and FM of our own developments. Sustainability is an inevitable part of the PM and FM teams’ work,” says Edina Hornok, head of sustainability at the Hungarian architects, interior designers and construction consultants, DVM group.

Regional developer Skanska, active across the Central Europe, has sustainable design and office management policies across its portfolio that are aimed at reacting to the post-coronavirus environment. The company is working with its own architects and an epidemiologist.

Rethinking Design

According to Andrei Ivan, sustainability and innovations director at Skanska, the aim is to identify areas that will balance safety, sustainability and feasibility to rethink the design of offices spaces with regard to possible future pandemic risks; cooperation between the owner, property managers and tenants is crucial, he says.

Regional industrial developers and park operators are now developing sustainability accredited and more highly specified projects in reaction to changing tenant demands.  

Prologis, for example, has five BREEAM accredited buildings in Hungary. Four buildings at Prologis Park Budapest-Sziget have been awarded BREEAM “Good” accreditation.

Prologis Park Budapest-Harbor provides a 30% reduction in heating costs, LED lighting and large skylights cut electricity consumption by 45% and it also has electric car charging facilities and direct public transport links.  

“The unfavorable ratio of cost to potential benefits of space usage discouraged short-term occupiers, while developers, due to the intense market competition, were clearly more focused on price rivalry,” comments Cushman & Wakefield in its survey “How Sustainability has Made its way into Industrial Spaces.”  

“Environmentally-friendly facilities with above-market specifications were not popular for many years. Fortunately, such solutions have gradually gained in importance, largely on account of real savings to tenants and developers, and far lower operational costs of such buildings. Sustainable solutions are simply cost effective,” the survey continues.

The entire CTP portfolio, consisting of almost 300 buildings in six CEE countries including Hungary, have received BREEAM “In-Use” certification, and four buildings have been awarded an “Excellent” rating.   

Prologis Park Budapest-Harbor.

Science-based

“Last year, CTP was the first in the industry to enter into a collaboration agreement for the implementation of the BREEAM “In-Use” international certification for its entire industrial portfolio. This is a science-based sustainability certificate that allows quick comparison of the performance of assets across territories,” said CTP.

Further sustainability issues bring in the concept of “circularity” and the use of recyclable materials in development and construction and the need to cut CO2 emissions.  

“To achieve our goal of a climate-neutral building, besides other highly efficient and sustainable solutions, we are going to replace structural elements from concrete to timber. Wood has amazing qualities,” says Alexandra Tomášková, executive vice-president of operations for Hungary and the Czech Republic at Skanska Commercial Development Europe.  

“One of the best, especially in the current context of accelerating climate change, is the fact that the material has a very low carbon footprint. Wood not only stores CO2, it can also be re-used when the lifecycle of the building is over. The use of wood is a part of an ongoing natural lifecycle,” she adds.

Skanska has made a global commitment to a climate target of net-zero carbon emissions by 2045, with a 50% reduction by 2030. Together, building and construction are responsible for 39% of all carbon emissions in the world, with operational emissions (from energy used to heat, cool and light buildings) accounting for 28%, according to Skanska.

The BREEAM “Very Good” accredited, EUR 31 million Balance Hall office development was completed at the turn of the year and forms part of the 35,000 sqm Balance Office Park with a 95% occupancy according to CPI.

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