Retrofit: The New Normal

75% of the buildings that will be standing in 2050 already exist”[1]

In 2025, experts widely recognise that retrofitting buildings plays a crucial role in decarbonising the built environment. Numerous successful retrofits now deliver high-quality spaces for people, while preserving the viability and relevance of existing structures. Given the scale and diversity of the current building stock, retrofit presents both challenges and opportunities across every sector and building type. Analysts also report that assets with strong sustainability credentials increasingly attract higher capital values and rental income.

Here are three reasons why building retrofit is increasingly seen as the new normal.

1. Compliance

New or proposed regulatory changes in different building sectors in the UK mean that retrofit is no longer optional for some buildings to retain value or to remain compliant.

Recent research [2] shows that 70% of commercial properties are rated EPC B or below, failing to meet proposed MEES standards for 2030. De-risking the potential non-compliance is a major driver for commercial buildings but it is also relevant to other sectors because MEES / EPC requirements apply to most buildings that are rented or sold.

Similarly, for existing higher-risk buildings, the new safety case regime is also driving owners to address shortcomings with their buildings in demonstrating they are safe to occupy.

These regulatory drivers provide an opportunity for owners, operators and developers to think about addressing wider issues with their buildings at the same time.

2. Cost and Time

In many cases, retrofitting buildings can be both cheaper and quicker. When substantial elements of the structure and building fabric can be safely retained, avoiding demolition and new construction can lead to significant savings in time, labour and materials. In our city centres, many existing buildings are already located near key transport nodes—an advantage that research shows has a notable impact on property valuation. By retrofitting and upgrading buildings in these prime locations, owners can reduce void periods while enhancing asset value.

While retrofits do carry risks due to inherent uncertainties, a well-managed and properly mitigated approach often makes the business case compelling.

 3. Decarbonisation and sustainability

As occupiers pursue net zero goals and investors align capital with sustainable real estate, retrofit is emerging as a beacon of growth in an otherwise cyclically sensitive industry. Environmental, social, and governance (ESG) pressures are reshaping how properties are valued. A recent investor report by KPMG [3] found that 71% of respondents had increased their consideration of ESG factors. Both investors and occupiers are increasingly selecting buildings with sustainability certifications, smart technologies, and strong energy performance.

Further evidence from Knight Frank [4] indicates that retrofitting secondary office buildings to achieve an EPC B rating can result in a 19 percentage point uplift in value compared to prime assets. Our own experience, working with a broad range of stakeholders, supports this finding: buildings with a strong sustainability narrative are increasingly in demand.

Recently, we’ve also observed growing interest from potential occupiers in retrofitted existing buildings. This is largely driven by the perception that well-executed retrofits often have a lower embodied carbon and whole-life carbon footprint than new-builds of comparable size. This is because much of the existing structure - and therefore its embodied carbon - is retained, whereas demolition and new construction typically creates additional emissions and carbon loss through demolition.

This demand is also driven by features that enhance well-being and support productivity—particularly those designed with people at their core. The Acre, a central London development by Arup, exemplifies this forward-looking trend. The project delivers a sensitive and sustainable retrofit around a Brutalist architectural core, including a new, publicly accessible central atrium that provides tangible community benefit.

Not so fast

The benefits of retrofit are already clear to many. The real opportunity now lies in scaling up delivery to unlock a wide range of positive outcomes. In this #retrofit series, we’ll explore the potential to create innovative, future-ready building design - and how earlier interventions can help de-risk projects to deliver what the industry truly needs: from increased rental yields and higher occupancy rates to future-proofed assets that not only stand the test of time, but also embody the low-carbon built environment we aspire to create.

To find out more about Arup’s retrofit expertise, get in touch with me directly.

References

1 | Retrofitted buildings are key to the energy transition | World Economic Forum

2 | UK commercial property retrofit rate needs to quadruple to meet proposed regulation

3 |ESG due diligence in the UK | KPMG UK

4 |Meeting the Commercial Property Retrofit Challenge - Part 3 | Knight Frank Research