THE REAL COST OF RETROFITTING
A report from the SCSI highlights the financial challenges and opportunities involved in retrofitting commercial offices
A new study by the Society of Chartered Surveyors Ireland (SCSI) outlines for the first time the real costs of retrofitting office buildings in Ireland and the financial challenges and opportunities presented by such projects.
After evaluating seven diverse commercial retrofit case studies encompassing a range of office types and conditions in Dublin, a panel of chartered valuation surveyors found that retrofitting would only be financially viable in three cases without value added elements. However, where viable it was found retrofitting could have a positive impact on rental income with potential increases ranging from 40% to 66%.
The analysis found the remaining four did not meet the required viability threshold when other value add elements were excluded because the retrofit costs exceeded, the anticipated increase in the building’s value.
The SCSI’s Real Cost of Retrofitting Offices Report 2025, which was supported by AIB, aims to improve understanding of the works required to achieve a more energy-efficient and decarbonised building stock. The SCSI pointed out that this is the first research of its kind and further studies will be needed to ascertain the supports required to enable the delivery of Ireland Net Zero targets in the commercial property sector.
Chartered Valuation Surveyor and co-author, Sarah Garry, said the research highlights a significant disparity between the progress in residential and commercial retrofitting.
“While the residential sector is responding more positively to energy upgrade targets, the commercial sector lags considerably. According to the CSO, almost 60% of offices have a Building Energy Ratings (BER) of D1 or lower.
“Services encompassing mechanical and electrical upgrades which cover lighting, heating and ventilation, often represented the most significant cost component in retrofit projects. The proportion of these costs ranged between 21% and 76%. Our findings indicate that not all significant service investments resulted in an improved BER.
“Unless owners of poor performing commercial buildings with low BER ratings can find a route to retrofitting, they face the risk of their assets becoming stranded and unoccupiable. On the other hand, by retrofitting the property, they can improve income level from the asset – in some cases the increase in rental income ranged between 40% to 66% – increase its capital value and secure its future. In addition to the sustainable benefits there are also many social benefits in preventing vacancy and improving the vibrancy and appeal of the area.”
Chartered Quantity Surveyor and co-author, Anthony Cloonan, said the fact that retrofitting would only be financially viable in three of the seven case studies highlights the scale of the challenge facing property owners.
“Our examination of the seven case studies revealed substantial variations in retrofitting costs, largely influenced by the specific characteristics of each office block and the extent of the upgrade works.
“The findings also underscore the necessity for tailored case-by-case assessments, the importance of setting clear, strategic objectives for each project and the need to prioritise capital expenditure based on each property’s specific condition. By doing this it should be possible to make the investment cost neutral, at the minimum in most cases.”
Mary Whitelaw, AIB Chief Strategy and Sustainability Officer, said the publication of the report marked an important first step in understanding the financial challenges associated with retrofitting office buildings and would facilitate a more proactive approach to it.
“The UN has estimated that nearly 40% of global carbon dioxide emissions come from real estate. Retrofitting existing buildings reduces the whole life carbon of a structure by not adding to the carbon already embodied in them.
Data based analysis of the costs involved in undertaking retrofitting work is a critical enabler of action in this space. This report will lead to a more proactive approach towards retrofitting office buildings. Making our buildings healthier and more efficient is vital in helping us achieve our net zero ambitions and adds significant financial and social value, while mitigating against business risks.”
Key Findings
Report highlights the financial challenges and opportunities involved in retrofitting commercial offices
Office retrofitting can boost rental income by up to 66%
3 out of 7 retrofit office case studies financially viable without value added elements
Authors warn of danger of obsolescence in long-term low BER rated commercial buildings
SCSI calls for review of SEAI retrofit grants and for focus on insulation and reducing energy consumption
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Michael McDonnell Managing Editor of Irish Construction Industry Magazine & Plan Magazine
Email: michael@irishconstruction.com WWW.MCDMEDIA.IE