Property Week and Yardi brought together a host of leading industry figures at The Office Group, The Shard In London to discuss what the property industry is doing to tackle the climate crisis. The panel: Neal Gemassmer, Vice president, international, Yardi Sam Carson, Director of sustainability innovation, Carbon Intelligence Janine Cole, Director of sustainability and community, Great Portland Estates Alex Green, Assistant director, British Property Federation Malcolm Hanna, Sustainability manager, real assets, LGIM Caroline Hill, Corporate affairs and sustainability director, Landsec David Partridge, Joint chief executive, Argent Related Steven Skinner, Chief executive, HB Reavis Liz Hamson, Editor, Property Week (chair) What is the industry doing to address the climate crisis? Has it woken up to the scale of the problem and started taking the right action, or is it still in the talking phase? Skinner: I ask the question in a slightly different way. Is the ambition the right ambition? Is the ambition big enough? I think we are slowly moving away from an accreditation-based approach to sustainability, but is that happening quickly enough? Is that going far enough?   What key areas should the property industry focus on? Hill: I think you have to start from the fundamental facts and listen to the science. The built environment is responsible for nearly 40% of global carbon emissions and that is a fact. So we, as the property industry, have an enormous role to play in tackling climate change – it is drilling down into your particular business and looking at what can you do. At Landsec, our focus is on carbon reduction and energy reduction. Setting really bold and ambitious targets and making progress each year towards them. But each agent in the property industry – architects, designers, engineers, developers – have all got a different role to play. It is about finding your space and then going for it. Partridge: We have to constantly look at innovation and think how much can I do. So even back in the mid-2000s when we got planning permission for King’s Cross, we committed to being 20% better than building regulations. So we built in a central energy centre that provides heating, cooling and electricity. There is no boiler in any of the buildings – it is all provided centrally. Off the back of that we have been able to get BREEAM ‘outstanding’ ratings for every single one of our office buildings. Someone told me the other day that 10% of all the BREEAM ‘outstanding’ buildings [in the UK?] are at King’s Cross. I did not even know it because you sort of see it as part of what you do anyway.   How big a problem is embodied carbon for the industry? Hill: When we started with our new sustainability strategy five years ago, one of the first things we did was a full carbon-footprinting exercise with the Carbon Trust looking at the whole range of activities that Landsec does. And what that told us is that our scope three is the absolute lion’s share of our footprint. So for us, that is how we build our buildings through our supply chain with our contractors, and then there is the energy-in-use of our occupiers. And so our programme has for years focused on embodied carbon because we know that is where our biggest footprint is. Hanna: The other thing to remember about embodied carbon is if you think about the operational carbon that will be emitted over the lifetime of the building, which could be anything from 10 to 50 years, the embodied carbon is right up front. In terms of our approach, L&G has had targets in place for quite a few years and we recently achieved our previous 10-year target. So we are in the process of updating our science-based targets for the next 10 years.   What does the industry need to do to address the embodied carbon...

The rise of ecommerce has revolutionised the way we shop – but it has also transformed property logistics. Technology is helping retailers and carriers to manage stock movements, in-store click & collect and home deliveries, but it is also a costly investment. Who will pick up the tab? How are developers, investors, distributors and occupiers using ‘smart logistics’ to serve their customers? Yardi brought together a panel of thought leaders in a roundtable at Property Week’s Sheds Conference in Birmingham. The panel: Paul Crosbie, investment manager, M&G Real Estate Jonathan Gardner, head of asset management, Delin Capital Nick Kay, development director, St Modwen Properties Len Rosso, head of industrial and logistics, Colliers International Charles Spicer, Midlands industrial and logistics director, Savills Claer Barrett, personal finance editor, Financial Times (chair) CB: What do you all think the ‘shed of the future’ will look like? How will the needs of occupiers change over the next five years? LR: I don’t think we should call logistics space ‘sheds’ anymore. It is a much more technologically advanced product than the name suggests. Drones, robots and automation are all on the horizon, but I think the biggest change we’re seeing right now is higher eaves heights and mezzanine floors. Occupiers want to use all the space they’re paying for – not just the ground floor. PC: People are getting very excited about drone deliveries, but they are more likely to be used for rural areas rather than built-up urban locations where their use will be more restricted. JG: Occupiers will still be using vans and lorries, charge can bypass the 200-mile mark, it will really make a change to the use of this technology. NK: And look at the activity going on inside the shed. The rise of the ‘sharing economy’ is a big trend. We’ve seen Airbnb; now there’s a similar business called ZupplyChain for third- party logistics [3PL] companies with excess space to lease it out. If you can find space in areas of undersupply, it would make the market more fluid and ease the supply crunch. CS: The shed of the future won’t be one size fits all. Our market is very varied and diverse – so a manufacturer’s requirements are very different to that of a pure logistics operator. That said, we’re already seeing multi-level facilities and in the future we could well see subterranean ‘sheds’ in high-density urban areas. At the Property Week Sheds Conference, we’ve just heard a number of occupiers say they would not be averse to the idea of sharing space in the future so I anticipate more multi-user facilities as is commonplace in mainland Europe. There are covenant and lease issues but nothing that is insurmountable. We may see a company that is institutionally acceptable taking a ‘master lease’ and then space split between multiple users and companies in a Regus-type model. CB: As investors, how happy would you be with the idea of a shared shed? PC: A facility shared by a number of operators would be interesting if there was an overriding lease. It could give investors more comfort if there was some diversity alongside the main tenant. LR: DHL has been talking about that model for the past five years, but it hasn’t happened yet. JG: Well, it has happened in mainland Europe. 3PLs want to match their lease lengths with their contract terms. If they have a three-year contract, they don’t want to take a five-year lease. However, this comes at a cost – they accept they will have to pay a much higher rent in some locations. Other 3PLs will take a big lease and will stack the space with three or four different customers’ kit. Even then, there could be quite tough conditions to meet, such as 50% of the space being occupied by one client for the full length of the lease. PC: I agree that the sheds –...