Regenerating Communities with Digital-Led Adaptive Reuse Projects

Europe’s great cities are full of historic buildings from all periods of our urban history, from Gothic cathedrals to grand Renaissance-era mansions and terraces. Yet, as our built environment progresses and the demands we expect from our buildings change, they can sometimes become obsolete or unfit for modern purposes.

Retrofitting historic buildings can be costly; installing up-to-date features can cost at least €500/m2. For commercial real estate (CRE) developers, the alternative of investing in energy-efficient new-build stock is often the cheaper and easier alternative. As such, the renovation rate of existing buildings is low: just 0.4-1.2% are renovated annually across the EU. 

To promote more sustainability in the sector and address the growing issue of building abandonment and the social issues they can cause within local communities, adaptive reuse projects have emerged to breathe new life into forgotten infrastructure. These blend the historical significance of the original design with cutting-edge technology to repurpose the building for commercial or residential use.

Proptech has a major role in shaping our built environment’s future and facilitating the completion of adaptive reuse projects through smart building technologies. This ProptechOS deep-dive looks at how innovative solutions breathe new digital life into our historic buildings.

What is adaptive reuse?

When a building no longer serves its original purpose, the risk of abandonment increases. Real estate developers often find it more cost-effective to purchase another more suitable building or land to procure a new build. 

Adaptive reuse projects aim to reclaim some of these sites that may otherwise be unsuitable for development by extensively repurposing legacy sites for new uses. This often involves retaining the building’s historic exterior and completing a thorough internal refit to bring the structure up to a habitable standard, sometimes encompassing a wider regeneration project of an urban area.

London’s Battersea Power Station redevelopment is arguably the most iconic adaptive reuse project. One of the capital’s most recognizable landmarks with its four white cooling towers, this coal-fired power station was decommissioned in the 1980s and subsequently fell into disrepair. 

Credit Unsplash/John Cameron

After decades of speculation and proposals around the site’s future use, from football stadiums to theme parks, the historically-listed building and surrounding 42-acre site were extensively redeveloped during the 2010s, opening in full as a mixed-use development in 2022 with homes, shops, and offices, including Apple’s UK headquarters.

Is adaptive reuse the same as retrofitting?

The crucial difference between an adaptive reuse project and a more conventional retrofit is the site’s use case. Retrofits often involve upgrading an existing building while retaining its core purpose. This is often necessary to meet environmental benchmarking standards, such as an overhaul of plant equipment to install an energy-efficient HVAC system.

However, adaptive reuse is all about repurposing a building for something new. In Battersea’s case, the power station became obsolete despite its historic listing, so an extensive adaptive reuse project became the only viable solution for the site.

Socio-economic benefits of adaptive reuse in commercial real estate

On the face of it, adaptive reuse developments may seem limited in scope, and retrofitting an existing building is the simpler, more cost-effective solution. However, there are plenty of reasons why recycling legacy building stock can be a viable strategy for CRE developers. These projects can offer a variety of economic benefits while contributing towards an organization’s ESG targets.

Save up to 16% for commercial reuse

Unlike a retrofit, which requires a revenue-earning commercial space to be closed for its duration, adaptive reuse projects can be delivered without disruption. Provided the historic building’s shell is structurally intact, projects can often be delivered faster than a new build where demolition and/or site clearance is required.

With the savings on demolition, site preparation, and core construction, Deloitte estimates that CRE businesses can save as much as 16% on procuring new office space when investing in adaptive reuse, reducing construction time by almost a fifth (18%) compared with new development.

It is also possible to achieve LEED certification more easily, as USGBC criteria considers reuse to be advantageous from a sustainability perspective. Provided your adaptive reuse project met all the other certification standards, your business could stand to increase rents by more than a third (37%) on your office space.

Smart transformation of historic structures

Adaptive reuse projects are about more than just saving money. Transforming historic but forgotten spaces in our urban areas contributes to a wider community regeneration while maintaining its classic character and identity. It can become the cornerstone of a local area and attract new businesses and residents into the community, opening up new revenue streams for CRE businesses that might not otherwise have existed.

Credit Edinburgh.lv

The effects of this can be transformative. In the coastal town of Jurmala in Latvia, an adaptive reuse project revitalized iconic but previously run-down Soviet-era hotels and spa retreats, which the area has traditionally been known for. Converting them to residential property with colorful balconies and green spaces brought new life back into this once-thriving Baltic destination.

Why high-tech, digital-first adaptive reuse drives sustainability goals

Despite these compelling socio-economic arguments in favor of adaptive reuse over new construction or retrofits, the best case for such projects is an environmental one. In our throwaway world, recycling our legacy assets to meet our current and future needs is a more sustainable alternative than knocking something down and building new.

Such projects present an opportunity for CRE to invest in innovative proptech solutions to maximize the building’s operational efficiency, creating an asset with a historic facade but a green building at its core.

Environmental impact of building reuse vs new construction

An adaptive reuse project can minimize waste from construction and site clearance by retaining aspects of the original building that might otherwise have been demolished. In the US, 90% of construction debris is caused by demolition, with 145 million tons sent each year to landfill. By contrast, repurposing existing structures conserves natural resources and reduces the environmental impact associated with extracting and processing new materials.

Consequently, a CRE developer utilizing adaptive reuse can significantly reduce the embodied carbon associated with new construction, which includes emissions from manufacturing materials, transportation, and construction processes. This can ultimately impact your organization’s greenhouse gas emissions reports and long-term decarbonization targets. Overall, adaptive reuse can save up to 40% of emissions by conserving resources.

Smart building innovations in repurposed spaces

With historic regeneration projects, CRE developers can adopt the best of both worlds – a classic building of architectural significance and an operationally efficient smart building packed floor-to-ceiling with sustainable technology.

Implementing an IoT sensor network throughout an adaptive reuse building and integrating it with a building automation system (BAS) and energy-efficient HVAC unit facilitates a data-led energy management strategy that can optimize consumption and adjust according to demand.

These bespoke systems are more straightforward and less disruptive to implement than during a retrofit, yielding 10-25% whole-building energy savings while paying for itself within five years of implementation. With this data feeding into a comprehensive building management system (BMS), your CRE organization can identify real-time trends and efficiency gains.

Future-forward: Next wave of adaptive reuse

While this energy toolbox is deliverable in retrofits and new builds, the case for adaptive reuse hinges on utilizing existing facades and structures while breathing new life into them. Instead of demolishing and accumulating embodied carbon from site clearance, construction relies on maximizing the space available to suit your commercial aim.

With proptech solutions easily implemented in this scenario, sustainable development with the charm of a historic building and the efficiency of a LEED-certified establishment becomes possible – an enticing combination for ESG-minded CRE developers and their investors.

Reshaping building modernization with ProptechOS

With the rich architectural history of Scandinavia’s great cities, adaptive reuse developments transform and evolve our urban environments, and at ProptechOS, we understand the sustainability impact of approaching these projects with a data-driven mindset.

We help your adaptive reuse developments perform to the levels of gold-standard green buildings, connecting building systems to a world of cutting-edge Facility Management, automation, and IoT applications.

Energy optimization, operational efficiency, and tenancy experience are all key aspects of the green building ideal. Yet, our operating system for real estate makes this achievable in historic buildings designed centuries before the digital age.

Your CRE business can sign up for a free trial of ProptechOS today.

Chief Ecosystem Officer, and founder of ProptechOS and RealEstateCore is recognized as a leader in Building Operating Systems (BOS) and making the buildings of the world smarter. He holds an MSc and a Ph.D. in Media and Computer Science from KTH Royal Institute of Technology.

Read his full bio and information here.