An alignment of tenant and landlord ambitions around ESG is driving the business world to seek out corporate space which offers a ‘holistic approach’ to sustainability, according to Jon Cochrane, head of asset management at real estate investment manager Feldberg Capital.
Feldberg’s workplace focused strategies have attracted a range of tenants who increasingly see the need to occupy the ‘greenest’ offices – even if their motivation for pursuing ESG credentials is often quite different.
Cora, Feldberg’s recently launched £500 mln (€603 mln) brown-to-green workplace impact fund, is targeting offices ripe for redevelopment in London’s West End in vibrant locations such as Soho, Marylebone and Fitzrovia. Focusing on energy-inefficient ‘brown’ offices, Feldberg is using its ESG framework to transform older office assets into modern energy-efficient green workplaces.
The fund has already acquired two buildings - 21-25 Bedford Street, a prominent building less than 100 metres from Covent Garden Piazza; and 8 Bloomsbury Street, a 33,500 ft2 (3,100 m2) asset a stone’s throw from Tottenham Court Road Station. Both properties are now being transformed into modern ESG-led workplaces, and Cora is continuing to target well-located assets with the potential to be upgraded to best-in-class workspaces.
‘With Cora, we are seeing occupiers engage with the impact strategy much more than they might have done in the past,’ Cochrane notes. ‘At the start of my career, there was just a bit of interest in EPCs from tenants, more as a tick-box exercise.’ Today, in contrast, he cites the presence of ‘international clients and firms with their own ESG strategies – in which their office plays a big part’.
Now, EPCs are just one small factor, with occupiers wanting to see a ‘net zero trajectory for decarbonisation, and evidence of the resilience of the asset in the face of freak weather events, for reasons of business continuity’, he notes. ‘IT and comms teams will come along to inspect assets and ask a lot more questions about whether buildings are equipped to handle overheating, flood risks or power outages.’
Climate risk
In 2024, Feldberg undertook a climate risk analysis of all its assets with Zurich to demonstrate that it is thinking about real world issues before they happen. Cochrane says that with insurability an increasing headache for owners and occupiers, retrofit techniques that boost resilience are increasingly under the spotlight. He notes that the firm recently addressed the risk of freak rain showers on a listed building by expanding the diameter of its downpipes and increasing the frequency of gutter cleaning. ‘It might sound quite mundane, but such solutions can stop water from entering a building,’ he notes.
Social factors also come in as part of a ‘holistic set of requirements that include employee retention’, he notes. ‘Tenants tend to leave a building due to location factors – they might want more amenities nearby – or due to the quality of the fit-out. So aspects like lockers, showers, kitchens are all factored in.’
Each Cora asset has a local charity partnership that it supports, for example providing space for charity events, scaling local food bank initiatives or the sponsorship of local employment fairs. Feldberg notes that many SMEs want to add more social value to their communities and be more sustainable in their operations, but often lack the resource or expertise to make an impact. The aim is for Cora’s investments to have a positive effect on the communities close to where it is invested.
Akoya strategy
Feldberg’s Akoya portfolio is a £550 mln London neighbourhood workplace strategy in partnership with a global sovereign wealth fund, delivering green workspace assets for London’s SMEs. With a 750,000 ft2 portfolio and 160 tenants, Akoya is targeting net zero across the portfolio for scope 1, 2 & 3 emissions by 2040. Why does Feldberg seek to exceed current legislative requirements? ‘We can see that from an international perspective, taking EU taxonomy into account, you do need to push yourself above and beyond current legislation,’ Cochrane notes.
Around 95% of Akoya’s businesses are micro businesses, many of which lack the resources or knowledge to implement sustainable operation strategies. Cochrane says that Feldberg’s approach includes offering a ‘pret a porter’ sustainability strategy for occupiers if they need it. ‘One tenant was working with a huge client that wanted details of its ESG approach. We helped them by providing our blueprint for our sustainable workplace strategy,’ he says.
Lonsdale Road is another project spearheaded by Feldberg Capital. Located in London’s Queen’s Park, the aim is for the road to be London’s first ever net zero carbon street; Feldberg Capital has regenerated this 160,000 ft2 mixed-use estate into an ESG-led area with innovative energy efficient solutions that directly benefit SME tenants and the local community, by helping them be more sustainable.
Lonsdale Road stands out as a standing asset which is being fully retrofitted. Cochrane believes it could act as a blueprint for further urban transformation, also thanks to the digital twin which the team created for the project.
A wholly owned mews street, Lonsdale Road is now a creative community for SMEs, with workspaces and restaurant units alongside a yoga studio, micro-brewery, vet, and dentist – a village within a street. The street’s rolling refurbishment programme is committed to offset 100% of upfront embodied carbon. Feldberg has committed to making all refurbished tenant spaces net zero by 2030 and is on the way to achieving this.
