As published in Insider Media on 12 September 2022

Hollis has resided in the South-West for over 25 years, starting with presence in Bristol, later opening an office in Cardiff in 2008 and then expanding further south to Exeter in 2019. Their offices service clients across the entirety of the South-West, with in-house specialists offering technical due diligence, project management, dilapidations, ESG consulting as well as M&E engineering and Solar PV advisors completing their sustainability offering.

What’s happening down South?

Increased material costs are no stranger to the construction industry, and this is no different in the South-West market. These increased construction costs paired with a surge in demand for business space, is seeing rent for commercial property soar causing record rental prices within the region. Like most of the UK, and beyond for that matter, the initial fall in demand caused by the pandemic has since been rising with pace especially within the industrial and office sectors. Hollis’ Director Will Pasco tells us “The demand for business space, in both industrial and office sectors, is strong as we move into the back end of 2022, with demand exceeding supply in most areas.”

With local authorities allocating land for residential developments to hit Government housing targets, the supply for business space cannot keep up with the current demand. However, it isn’t just about finding space anymore, it is imperative to create spaces that meet the growing requirements of occupiers.

Anthony Fallon, Head of Hollis in Exeter says “It’s not just about creating a scheme that is profitable, there is far more to consider in order to make your space desirable for end users. One of the biggest changes we have noticed locally (and nationally) is a movement from ESG being a nice to have, to a must have. ESG is at the front of not only our landlord clients’ minds, but occupiers’ too. Our clients are also increasingly looking for detailed ESG advice at pre-acquisition stage, when looking to purchase and redevelop existing stock”

ESG driven real estate

With the built environment contributing to approximately 40% of global greenhouse gas emissions, our industry, and the Government alike, are all thinking of ways we can decarbonise real estate.

One Government initiative designed to drive down energy consumption of buildings, is the amendments to the minimum energy efficiency standard (MEES). Director and Head of Hollis in Bristol, James Key, explains “Due to the regulation changes to MEES, from April 2023 a landlord cannot continue to let a building with a rating lower than an E, which later rises to a B rating by 2030. Whilst the 2030 deadline currently stands at a B rating, there is no saying that requirement won’t rise again in the future. With real estate holding one of the highest carbon footprints, we actively encourage and work with our clients to aim beyond this to futureproof their assets.”

Leading by example

Reacting to the market change, Hollis has grown their ESG consulting service which helps guide their clients to net zero, but also advises on how to reach the highest sustainability credentials. With in-house specialists, Hollis can provide a multi-faceted offering allowing clients to keep their ESG agenda at the forefront whilst working seamlessly with other teams such as project management and dilapidations for example.

Discussing Hollis’ integrated approach, Pasco explains “From green dilapidations to project managing a site to hit its ESG goals, we have the expertise to help our clients’ deliver their sustainability agendas on any size of project. One example is Temple Circus in Bristol. We are project managing the refurbishment scheme with our in-house M&E team, but also with our ESG specialists involved. This integrated approach allows us to look at the long-term strategy, and not just at the short term re-let.  We ensure our clients’ assets can be let, sold and that value has been added.”

With the upcoming MEES changes soon to come into effect, an increasing number of businesses will be questioning how they can improve the energy efficiency of their assets. Pasco says “A perfect example is on an office block we’re currently project managing. We’re refurbishing 60% of the building because 40% is occupied, but we need to get the entirety of the building to an EPC B in the long term. Based on the 60%, it would currently only get a mid-range C rating, so we have had to strategise what can be achieved now, and what needs to be implemented in 2028/29 to ensure the asset achieves the 2030 requirement.”

It isn’t just energy efficiency that makes up an asset’s environmental credentials, but BREEAM, LEED and Fitwel too, which can help clients achieve top sustainability credentials. Hollis is currently advising an owner occupier client on their new build warehouse on a greenfield site to reach the highest sustainability credentials. Senior Associate William Floyd tells us “This ground up design incorporated a variety of initiatives including a large solar PV array proposed for the roof, a heat pump heating system and high air tightness considerations but essentially it is all down to the design team working together. There is no one thing that we have included to make this happen; it is about working with our client and design team to collect the credits needed for the building to work and achieve net zero carbon and BREEAM Excellent.”

Pasco summarises “The key for us as consultants is to understand our clients’ agendas. It takes careful consideration to understand where we can decarbonise assets, and reduce energy consumption, all in line with a client’s own ESG strategy and ambitions. The recent shift to ESG is the new normal and it is our job to provide advice that will truly provide value.”

With offices in Bristol, Cardiff and Exeter, as well as 20 other offices nationwide and in Europe, Hollis has the capacity and resources that come with global coverage, whilst importantly also having local knowledge and expertise. Please get in touch with James Key, Anthony Fallon and Ross Powell for further advice relating to your assets in the South-West.