How real estate is retrofitting historic buildings

Historic buildings are central to daily life in many cities but behind even the best-maintained facades, many are falling short on increasingly stringent sustainability targets.

It makes them a crucial part of real estate’s wider efforts to decarbonize. Retrofitting could improve the carbon footprint of historic buildings by over 60%, yet regulations to preserve heritage can complicate sustainability interventions.

As incoming legislation stipulates carbon emissions limits for buildings, today’s retrofitting efforts are walking the line between improving energy efficiency while remaining on the right side of heritage laws.

“Retrofitting is the only way to achieve net zero, help owners comply with ESG requirements and protect liquidity,” says Paula Albaladejo, EMEA Head of Sustainability Project & Development Services at JLL. “While there are significant limitations on what works can be carried out on historic buildings, there are also unique opportunities to improve the sustainability of assets with cultural and architectural significance.”

Buildings built before 1945 represent 30% of European stock. The UK has some of the oldest building stock in Europe with around 5.9 million buildings, including about 600,000 commercial properties dating from before 1919. In New York City, around half of office space was constructed before 1945 – well before energy efficiency became a concern.

Today, many older buildings have restrictions on altering elements such as materials, façade, or structures. Others are located in conservation areas, and may preclude external additions such as rooftop solar panels.

“With historic buildings, it can be harder to get approval for deeper interventions such as onsite renewables, heat pumps, and changes to the building’s fabric,” says Kirsty Draper, Head of Sustainability for UK Agency at JLL.

Historic materials and construction methods also influence retrofit works. While initial interventions like adopting LED lighting and installing motion sensors can improve energy efficiency, these have a limited effect when the building’s core systems and infrastructure underperform.

“It’s essential to address not only the superficial issues but also to tackle the root causes of energy inefficiency and high carbon emissions within the building's structure and overall systems,” says Albaladejo. “This requires a specialized and holistic approach to strike a balance between investing smartly while implementing effective energy-saving measures.”

Using improper techniques and materials to enhance energy efficiency can have adverse effects on the structural integrity of older buildings. For example, blocking the ventilation features that allow air to flow to prevent moisture build-up can cause long-term damage. Traditionally solid walls can equally create difficulties in installing insulation without compromising on their aesthetic appeal.

With less standardized approaches to construction and less available data to draw on, historic buildings also call for more tailored retrofit assessments.

“There’s more need to analyze what the asset offers, what the building fabric is capable of and what building regulations allow,” says Draper.

Depending on the building’s structural integrity or scale of the project, interventions may need to be phased.

New York’s Empire State building undertook eight energy efficiency projects to cut its carbon footprint. This included retrofitting all 6,514 windows along with installing 67 elevators that generate electricity instead of heat when braking. It consequently surpassed its original target to reduce energy use by 38% and delivered annual energy savings of $4.4 million.

Specialist skills can also be required. Fit-out teams experienced with historic buildings can streamline many construction complexities yet finding the right skilled workforce can be an issue. About 100,000 people work on historical buildings in the UK, according to Capital Economics – around half of what’s needed.

Policy and guidance are helping evolve retrofit solutions for historical buildings. The EU-funded RIBuild project aims to make it easier to fit internal insulation by developing comprehensive decision guidelines, which could help save up to 15-20% in energy consumption.

It’s not just commercial buildings in focus; schemes are underway to understand how to sensitively retrofit residential heritage buildings and add social value. UK social landlord Peabody, for example is implementing ‘fabric first’ upgrade measures which target heat loss from buildings across a variety of housing types, from Victorian cottages to 1960s developments.

In Barcelona, the ShowPass residence was an early 20^th century, uninsulated building affected by condensation and mold. Phased retrofit works cut energy demand by 80% while preserving the traditional façade through interior insulation and airtight layers. Today it hosts open days to showcase its energy solutions.

Across properties, retrofitting efforts are starting to incorporate more modern methods where relevant. Radiant floors using water pipes for heating can be installed without altering original floorboards. Cross-laminated timber can restore floors with both durability and structural authenticity. Solar PPAs could help developers access custom renewable energy solutions that don’t compromise historic building design.

“There’s growing momentum behind more innovative solutions to retrofitting protected buildings. Technology is improving and that’s creating more opportunities for finding creative retrofit solutions,” says Draper.

Beyond the fit-out, measures to bring about behavioural change in the building’s occupiers can also have a significant impact – such as installing automatic metering and smart building systems to track and optimize energy consumption. Green leases can also help ensure that tenants consider their fit-out and operations through a more sustainable lens.

In some cases, adaptive reuse will need to be considered alongside retrofitting. Take Grade II-listed Canada House in Manchester which was built in 1909 as a warehouse. It was bought by investment company Kinrise and repurposed as a modern, energy-efficient coworking space while retaining many of its original features.

“It’s important to understand what the community and investor appetite for a building is, whether a change of use is feasible and the implications for capital expenditure,” says Albaladejo. “For example, conversions to residential buildings could help meet Europe’s growing housing demand. Conversions into university spaces can help ensure historic buildings remain integrated in communities.”

As pressure to decarbonize real estate mounts, there’s a balance to find between preserving the past and creating a more sustainable future.

“Real estate needs to unlock more retrofit opportunities” says Draper. “Environmental, social and economic growth needs to be considered when assessing these opportunities to ensure iconic buildings remain integrated in communities for generations to come.”